VFX “Paper Losses”

This week’s big announcement was that Digital Domain will attempt to make a public offering to Wall Street investors. In the US, any company that attempts to go public is legally obligated to release a financial statement. You can view the latest financial statement here:

http://www.sec.gov/Archives/edgar/data/1418055/000114420407066979/v092620_s1.htm

Digital Domain also attempted to file in 2007 (Which includes compensation and BONUS details for executives):

http://www.sec.gov/Archives/edgar/data/1490930/000114420411030158/v221001_barcap-s1.htm

I’m no accountant or financial expert but you can basically see how much revenue the company was taking in and the income it made for those reported years (in thousands). I’ve consolidated them all below:

The latest financial report also breaks up revenue and costs by the company’s various divisions: Feature Film, Commercials, Animation, and Corporate. What’s interesting is the bulk of the losses come from the corporate side while the features and commercials divisions generally have made money.

Can a company with year after year losses go public? It’s possible. As the LA Times pointed out RealD had a successful IPO last year. Even though it consistently lost money before it’s IPO, the stock is now running about $35 a share.

Financial situations can rapidly change for VFX companies. Digital Domain CEO John Textor was criticized by a former investor about the financials reported the first time they filed. His reaction:

He dismisses Domino’s criticism as sour grapes and says SEC documents reflected “paper losses,” not cash.

Soldier On.

UPDATE: Joe Harkins posts his reaction here.

3 Responses to VFX “Paper Losses”

  1. […] Afterall, at the end of the day, as one exec said, these are all just “paper losses”. […]

  2. […] According to DD CEO John Textor, who boosted his pay to $750,000 from $500,000, these are all just “paper losses”. […]

  3. […] Digital Domain is losing money big time and they certainly don’t make a profit but don’t tell the executives! They are making more money and even sponsor a ballpark to boot! They’re just paper losses! […]

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

%d bloggers like this: