The company was making money. They were just giving it all away to the owners.

They also got robbed by payment processors.

They were very profitable. No two ways about it.

Where did I say a dividend was an expense. (Hint, see the two bolded sentences above, especially the underlined bit.)

I should hope not. Dividends are not income to the company paying the dividends.

Perhaps what you are trying to imply is that dividends do not appear on the financial statements. Such an implication would be incorrect. How would the company account for the loss of cash caused by the payment of dividends?

For a somewhat relevent example of how dividends are accounted for, look at the second last line of figures in the Pocket Kings Limited Statement of Profit and Loss for the year ended April 30, 2010, on the page numbered 6, (the eighth page in the file) of the Pocket Kings Financial statement hosted on Subject: Poker here.

And for all you attentive readers who note that €28,991 is nowhere near the amount paid to FTP owners, I should point out that the distributions to FTP owners generally did not come from Pocket Kings, but rather from other bits of the FTP corporate tangle, perhaps Kolyma AVV or My West Nook.

Yes, I am sure we all believe you, and the whole community is grateful for pointing out my grievous errors. You may now safely return to your usual space-time continuum.

I'll put a thousand on the same bet.

Anyone claiming FTP was not profitable is a complete idiot.

What FTP did wrong was "think they were more profitable then they were"

They figured they could spend player deposits, they figured that

Weekly or monthly deposits would always exceed expenses and withdrawals

Which was probably the case until payment processors got greedy and FTP bank accounts got seized.

They were making AN OPERATING PROFIT.

However certain extraordinary losses and theft combined with a "leveraged" financial position + black Friday ****ed everything.

Had FTP owners put up the money post black Friday it would have been a +$$$ev investment

According to the DOJ, FTP made a profit. Clearly, some years were better than others, and we can reliably deduce that the last year of operation was at a loss (the period after UIGEA regulations went into effect). Do you think Romney never made a profit at Bain? Do you think all those investment funds that are now closed failed to turn a profit? My God, people sunk many millions into those funds and now nothing is left!

FTP was certainly very profitable. The owner/operators received a gadzillion dollars. Of course they robbed their customers and destroyed their company when they KNEW the DOJ was eventully going after them! PS were not choirboys, but they sure behaved differently. Maybe that was because they were actully businessmen.

Either before making the distributons, or because of the distributions, FTP was making a loss, not a profit.

If what you meant to say was that we cannot tell if FTP would have been making a profit if they hadn't made the improper distributions, then I might agree.

This is where you said it. Again, dividends are not an expense that contribut to profit or losses.

Im not sure, but havent main even started? any logo's

Subject Poker estimates that FTP paid out roughly $500 million in dividends to their owners throughout the existence of FTP. Players are owed what? ~$350 million?

Can you explain to me how they managed to pay themselves more than their current liabilities if they were not making any money? I'm struggling to understand how that is possible...

To me it seems pretty simple... if FTP had that $500 million in their company bank account at the time of BF, $350 million would go to the players and the remaining $150 million would be theirs to keep(aka "profit"). How does where that $500 million is at the moment have any bearing on whether or not the company was profitable.

I'm glad that I am not an accountant too. So glad we're both glad. I'm also glad you are not an accoutant. It seems I know more about accountng than you do.

There may have been a profit before the money was stolen. After the theft there was no remaining profit.

So how do you think a company properly accounts for theft and bad business practices on its statement of income and expendures and on its statement of profit and loss?

"Oh, the company doesn't have that money any more because of a bad business practice, so we don't have to show it's loss on the financial statements. Herp, derp".

Somebody lost the .5 million. It did not appear in thin air.

If your company made $1M in June, and you then take $1.5M out of your company in July, your company made a $1M profit for June, a $1.5M loss for July and a $0.5M loss for the period June to July.

You are quite correct that you did not lose the $500 on the job you did for me. You lost it by spending it on partying. The fact that you spent it on something other than operations, unwisely or illegally, does not negate the fact that you spent it. The company's accounts still have to reflect the fact that the $2000 is gone and there remains a debt for $500. The company, over all its activity, made a $500 loss.

People ITT seem to be confusing Operating Profit with Profit. They seem to think that any company making an operating profit is profitable.

Yes, that is actually my job.

Here is just one example of such an estimate, you could look around this forum for many more:

http://www.pokerkingblog.com/2008/01...-make-per-day/

Of course we have plenty of numbers on PartyPoker, that used to make 65%.
Look it up, inform yourself instead of questioning everything just for arguments sake.

I know you know I am not and you are just challenging me.
You will not be able to give one example where I pulled numbers. Ever.

The 16 times earnings comes from the PartyPoker numbers, which you knew having read the articles.
What I said was a pokercompany trades at 16 times its earnings.
The valuation should actually be more than that.
As you can see all my numbers are very conservative.

According to the DOJ they still received 8M or 9M a week in deposits after BF
(I think they mean 8.~ 9.~ putting the average at 9M)
so yearly deposits would be 468M.

Times 35% rake income times 33.3% net income* times 16 makes 872.7M.
Once again, all these numbers are very conservative.



Oke, show me some proof of that fact of yours.




* The lowest estimate was FTP netted 20%.
40% was USA market and transaction costs there were "a solid one third" of revenue.
So that was 13.3% of total revenue. Add that up to the 20%.

Neither the word "dividend" nor the word "expense" appears where you claim I said that dividends are expenses.

I further explained that a distribution in excess of profit is not properly a dividend, so my reference in the bolded bit to "distributions" is not equivalent to "dividends".

Improper distributions are not dividends, so they are not accounted for in the same way as dividends. While dividends do not contribute to profit or loss, improper distributions do contribute to loss, but not operating profit or loss.

DTM, you re being pedantic. Yeah under your definition they weren't profitable, but people's common sense tells them that if FTP had an operating profit and they didn't behave in a irresponsible/shady way, they would have been profitable.

Besides that- and to amend what I previously said- I think that they were definitely not profitable after they allowed 128 mil in phantom deposits and there's a good chance they weren't profitable due to a high number of processor seizures and theft, along with idiotic loans to professionals like Benyamine. Contrary to what happened with the dividends you cannot count the income you lost there as potential profit, but as cost of doing business.

There apparently wasn't an extension of the Monday answers/motions deadline on Friday like there was last week. So hopefully it will be an interesting Monday.

The last few pages is full of people arguing over basically the definition of profit/loss. Obviously FTP made a profit. They then obviously made a loss since they were giving out dividends to in excess to said profits.

Everyone is arguing for the same thing and not realizing they are arguing over a definition.

I challenge you to cite a single source that confirms your BS.

Dividends or "improper distributions" do not effect any kind of profit or loss (neither operating profit or net profit) on the income statement. Where they show up is on the balance sheet (reducing owner's equity, reducing cash, and increasing liabilities (in this case to the players)).

opppsss WRONG AGAIN--- a divinend has NOTHING_ZERO ZIP_NILCHE to do with PROFIT AND LOSS

sorry!!!


no the company account show that a $1500 PROFIT was made on that job--how the PROFITS were spent has nothing to do with whether or not a PROFIT was made. AS far as paying income taxes i would be paying taxes on $1500 worth of PROFIT (INCOME) from that job.

what someone does wioth the said PROFIT has NOTHING to do with whther or not a company is profitable!

If i vought the company and did not hide billions in off-shore bank accounts would the company then be profitable?
if the answer is YES (of course it is) then the compnay NOW is profitable--just poorly managed

Taking money out of the company doesn't create a loss - accumulated owners equity becomes a deficit on the balance sheet - there is no effect on the income statement

everybody seems to know that except DTM

I didnt know that either. But i also couldnt give 2 chits about it.
What effing difference does it make if they were profitable or not profitable on a balance sheet?

All of you can have an extra cookie at recess time, since you all are somewhat right. Can you guys take your pissing contest somewhere else?

jfc, what in the name of hdemet is going on here?

These are reasonable questions. I'll try to give you an understandable answer.

FTP made a profit up to 2008 or 2009. After that it made a loss. The amount of profit it made in the earlier period was larger than the amount of loss it made in the later period, so over the whole of its existence, it made a profit.

FTP was not making a profit over the last few years, and it had not retained the profits it had made in the past. For those two reasons together, FTP does not qualify to be called "a profitable company" in the usual sense of that term. As you say, if FTP still had the $500M in their bank accounts, or if they paid out $350M of it to players but kept the remaining $150M, then they might still considered profitable, by some measures.

Where the $500M is at the moment matters because FTP cannot call on or use the $500M. It is no longer part of the company's financial position. And most importantly it is not available to pay players.

A company can pay its owners more than its current liabilities by making a profit. It can then later incur a loss and continue to pay its owners more than current liabilities. Example. wizzard98 opens a painting company, Wizzard Total Paint (WTP) in June, with himself as the sole, unpaid staff. WTP buys $1 of paint on credit, and uses it to paint my house, for a $5 payment. WTP then pays wizzard98 $2 in distibutions and puts $3 in the company bank account. WTP has just paid owners more than current liabilities. The company has made a $4 operating profit and its balance sheet is $2: $3 in assets and $1 in liabilities. Notice that the company's worth is less than its profit.

In July WTP gets a contract to paint your house. You are a better negotiator than me, so it is agreed to do it for $4. Unfortunately, the price of paint has risen to $5. WTP buys the paint on credit, and paints your house. This reduces cumulative operating profit to $3. WTP pays wizzard98 the $4 you paid and the $3 in the bank. The company has just paid owners more than current liabilites. WTP's balance sheet now has $0 in cash, and $6 in debt, for a balance of -$6. While wizzard98 has pocketed $9, his company has made a $6 loss on an operating profit of $3.

In July WTP gets a contract to paint your house. You are a better negotiator than me, so it is agreed to do it for $4. Unfortunately, the price of paint has risen to $5. WTP buys the paint on credit, and paints your house. This reduces cumulative operating profit to $3. WTP pays wizzard98 the $4 you paid and the $3 in the bank. The company has just paid owners more than current liabilites. WTP's balance sheet now has $0 in cash, and $6 in debt, for a balance of -$6. While wizzard98 has pocketed $9, his company has made a $6 loss on an operating profit of $3.


the company has still made a PROFIT the fact the owner has taken more than he is entitle to has NOTHING to do with PROFIT

the balance sheet shows $0 in the bank BUT also shows that the owners now OWE the company to balance the books!

This is exactly what they are afraid of. I hope Bitar makes a deal and all the shareholders who knew what was going on do time.

DTM is nothing if not pedantic.

Pedantic: Being showy of one’s knowledge, often in a boring manner.