Al Gore's Current Media: An Inconvenient IPO

True enough, if you exclude all that, Current is indeed profitable. But it's akin to saying one's family tree is sane if you exclude the blazing alcoholic, the UFO traveler and the celebrity stalker.

Breaking it all down, we have: $6 million in depreciation and amortization in 2007 alone, $4.1 million in interest expenses, and $2.4 million in stock-based compensation to employees and "affliates" that are excluded under GAAP accounting.

In all, that amounts to $12.5 million last year that Current Media wants you to ignore when you think of it as profitable.

If you can stand one more metric, consider this: Operating cash flow, the most sober measure of an IPO candidate's health, has been negative for three years: negative $4 million in 2007, negative $5 million in 2006 and negative $7 million in 2005.

The company has bled $16 million in cash in three years.

By contrast, MercadoLibre (MELI), whose stock is up 132% from its IPO, saw its operating cash flow nearly double to $6.2 million before listing. ComScore (SCOR), up 62%, saw its operating cash flow more than double to $11 million.

Should this bother Gore and Hyatt, who were each paid more than $1 million last year? (Gore also owns 3.7 million shares in Current and Hyatt 3.5 million shares. Those shares have 10 times the voting power of other shares.)

To get his million-dollar-plus salary plus all that founder's stock and autocratic control of Current, Gore had to put up a million-dollar loan. As the Gershwin boys once said, nice work if you can get it.

So why, you might ask, would a company like Current Media -- a company short on history yet long on red ink, whose audience is by its own admission so tiny that Nielsen won't track it, and whose IPO's terms are unfriendly to new investors -- try to go public with a recession looming?

Simple: After burning through close to $40 million, the company has only $2.2 million in cash and short-term investments on hand. Yet it has $36 million in debt outstanding. The supposed $100 million from this IPO would fix all that.

But that begs the question of who would pony up that $100 million.

Current Media isn't likely to go public in this uncertain market. And I hope for its sake it does have to wait a bit. Otherwise, it could decline in value and hurt the company's overall image.

That would offer Mr. Gore another award, one he may not covet very much: The 2008 IPO Booby Prize.

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