Motley Fool S-1

8/2/2019 Motley Fool S-1

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SECURITIES AND EXCHANGE COMMISSIONWashington, D.C. 20549

FORM S-1REGISTRATION STATEMENT

UNDER

THE SECURITIES ACT OF 1933

The Motley Fool, Inc.(Exact name of Registrant as specified in its charter)

Delaware 6282 26-333B77Q(State or other jurisdiction of

incorporation or organization)(Primary Standard Industrial

Classification Code Number)(I.R.S. Employer

Identification Number)

2000 Duke Street

Alexandria, VA 22314(703) 254-1000

(Address, including zip code, and telephone number, including area code, of Registrant's principal executive offices)

Tom Gardner

Chief Executive Officer

The Motley Fool, Inc.

2000 Duke Street

Alexandria, VA 22314

(703) 254-1000

(Name, address, including zip code, and telephone number, including area code, of agent for service)


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Copies to:

Soapy Smith, Esq.

Holland & Lloyd, LLP

627 West Weed Wacker Drive

Chicago, Illinois 60601

(312) 010-1010

James "Jim" West, Esq.

RPCB McKinnon, LLP. (US)

3 Western Avenue

West Palo Alto, California 94303

(text me)

Approximate date of commencement of proposed sale to the public: Today.

CLASS A COMMON STOCK

The Motley Fool, Inc. is offering shares of its Class A common stock and the selling stockholders are

offering shares of Class A common stock. We will not receive any proceeds from the sale of shares by theselling stockholders. This is our initial public offering and no public market currently exists for our shares. Weanticipate that the initial public offering price of our Class A common stock will be between $ and $ per

share.

We expect to apply to list our Class A common stock on the under the symbol FOOL.

Investing in our Class A common stock involves risks (and there are quite a few, to be honest).See "Risk Factors."

The Motley Fool, Inc. and the selling stockholders have granted the underwriters the right to purchase up to an

additional shares of Class A common stock to cover over-allotments.


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The Securities and Exchange Commission and state securities regulators have not approved or disapproved these

securities, or determined if this prospectus is truthful or complete. Any representation to the contrary is a criminal

offense.

The underwriters expect to deliver the shares of Class A common stock to purchasers on , 2012.

Victor Lustig International Barings Leeson

Coopers & Andersen

Morten Stanley Kerr a

Fools at work.


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We have our own sign! And yes, that is a falcon flying above us.

Business Summary and Selected Consolidated Financial and Other Data

At The Motley Fool, we strive to cut through the mumbo jumbo and give you straightforward

investment analysis. We'll attempt to do the same here with our own company.

Bottom line, when you buy shares in any firm, you're not buying past performance. You're buying future

performance. So we won't dwell on our accomplishments from 1993 to the present (though this will

prevent us from talking about our massive growth, our investing prowess, our many awards, and our

millions of delighted customers throughout the world). Instead, let's talk about where we're going from

here.


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We're very focused on the long term here at the Fool, and don't want you to get bogged down with

near-term performance forecasts. Below are our summary financials for fiscal years 2023, 2024, and

2025.

FY 2025 FY 2024 FY 2023(all figures in millions of dollars)

Sales $420,832 $184,332 $123,145

Operating expenses 69,231 68,222 70,843

Operating income 351,601 116,110 52,302

Gain (loss) on foreign

currency hedge

23,333 7,832 13,043

Gain (loss) on interest

rate risk hedge

1,252 3,572 2,222

Gain (loss) on

operational hedge

59,023 78,923 82,111

Gain (loss) on

miscellaneous hedges

12,311 (7,390) 9,992

Income tax expense

(gain)

(2,310) 2,310 232

Net income (GAAP) 449,830 196,737 159,438

Adjustments 638,920 4,502 87,922

Foolish net income 1,088,750 201,239 247,360

Selected Balance Sheet Items

Cash $15,002,084 $10,385,204 $3,082,549

Goodwill and other

intangibles

(12,245,225) (8,322,044) (7,342,220)

Debt 1,684,393 839,932 284,949

We believe we are being conservative with the pro forma estimates above. Our business model is

currently undergoing a tremendous transformation that will allow us to achieve our goal of becoming

the largest financial company in the world. Wall Street will be a cul-de-sac compared to our

superhighway of financial services.


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What will set the Fool apart is the cohesive diversity of its offerings. They say you can't be all things to all

people. We believe that is a false construct. With our Meta App, we will be -- at least for all things

financial.

We will be providing a service that offers an hourly deal on stocks. Imagine buying a $600 share of Apple

for just $300. That may sound too good to be true, but remember the deal only goes through if there'senough people committing to buy. Like Wal-Mart does with its inventory, individual investors will get

the rewards of buying in bulk.

Those same investors will gain the ability to network with fellow investors, leveraging social network

infrastructure. Tired of giving and receiving gifts of virtual beers and sheep? Get ready to send real

assets via our exclusive wire transfer capability. Like!


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You likely don't need a full-service broker 24/7. Our re-jiggered Zippy Trade service allows you to use

our experienced brokers only when you need one. Our low annual fees make it attractive even for buy-

and-hold investors.

Need some help with your own business? A new employee or contractor? A pre-populated discounted

cash flows spreadsheet? Someone to check your portfolio each minute of the trading day? Tom's Listcan help. And if not, our competing David's List may do the trick.

Our Bigger Fool investment program will advise investors how to play the daily movements in Motley

Fool shares via leverage and advanced trading techniques. In particular, there's one innovative stock-

picking method that we're excited to roll out shortly.

Our latest stock-picking offering -- almost ready to launch!

For diversification, there will also be a hothouse concept in which we provide funding for Phase 1

biopharma research. The investment will be small, but the potential returns could dwarf the rest of our

business. Think of it as our lottery ticket option.

But it's not all about profit. We will also do our part to make the financial world safer from the wolves.

They say the only way to fight fire is with fire, so investors in our patent-pending Reverse Ponzi Scheme


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will be set up to out-Madoff the Madoffs of the world. More to come via e-mail. Adjust your spam filter

accordingly.

This is just a taste of what we're planning. And we could use your help. If you've got a great business

idea, let us know. Email us [email protected] an idea in 140 characters or less. We're giving out

up to 1,000 shares of Class C stock for the best of the first 1,000 ideas we receive. Crowdsource on,Fools!

Bottom line, we're building the pre-eminent financial services company in the world. We expect 120%

first-day gains on our IPO. But we still think shares will be undervalued. You will see a good deal of post-

IPO insider selling, including a lot from our founders David and Tom Gardner. Don't be alarmed. We are

doing so to free up liquidity in the shares to allow individual investors to get in on this once-in-a-

generation bonanza. Our advice: Get in quickly and hold for a lifetime.

Management and Directors

Name Age PositionExecutive Officers:Tom Gardner 44 Co-Founder and, Chief Executive OfficerDavid Gardner 46 Co-Founder and Chief Rule BreakerCesare "Billy" Gardner 39 Chief Financial Officer

Directors:Tom Gardner 42 Executive Chairman of the BoardTwee Sommers 59 DirectorCalvin Sixx 46 DirectorDonald Dump 66 Vice Chairman of the Board

Executive Officers

Tom Gardner, Co-Founder, Chief Executive Officer, and Chairman of the Board

A frequently sought-after investment expert, commentator, and financial engineer, Tom Gardner co-

founded The Motley Fool in 1993 with his brother, David, and now serves as Chief Executive Officer.

Tom is the co-advisor with his brother of the market-thumping general equity service, Motley Fool Stock

Advisor. In accordance with his shareholder-friendly view of corporate governance, Tom only accepts $1

dollar in base salary per year (see the compensation section below for a complete breakdown of Tom's

non-base salary remuneration, which may result in a total compensation that is somewhat greater than

$1).

David Gardner, Co-Founder and Chief Rule Breaker

One of the country's most respected and trusted sources on investing, David Gardner co-founded The

Motley Fool with his brother, Tom, in 1993. As Chief Rule Breaker, David wears many hats including

innovator, stock picker, author, lecturer, and space enthusiast. David is hoping to be part of the next

manned flight to Mars, which will allow him to realize his dream of becoming the first person ever to
mailto:[email protected]:[email protected]:[email protected]:[email protected]


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buy a stock from space. He thinks it's pretty cool that Wi-Fi actually works better in space because of all

the satellites.

Cesare "Billy" Gardner, Chief Financial Officer

A widely-acclaimed poet, painter, and philosopher, "Billy" -- the youngest of the three Gardner brothers

-- took over as Chief Financial Officer at The Motley Fool in March 2012. Billy has always been skepticalof numbers and spreadsheets, and sees this as a wonderful opportunity to bring a liberal arts

perspective to a function that has traditionally been the domain of number crunchers. Billy is no

stranger to quantitative methods, however. As an 8th grader at the prestigious Meadow All Day and

Night School, he placed third in the basic arithmetic bee, and just recently passed an online class in

Excel. When he's not thinking big thoughts or tackling five-year cash flow forecasts, Billy likes to play

high-stakes poker.

Board of Directors

Twee Sommers is the founder ofTwee Sommers Living Demimedia, and is a talented investor in her

own right. Formerly an investment banker, Twee likes to utilize her impressive array of business contacts

when making investing decisions. Her motto of "never complain, never explain" has served her well

during her impressive business and investing career.

Calvin Sixx is a talented musician and former member of Mtley Cre (Calvin's a longtime friend of

David, and attended some of the early brainstorming sessions at The Fool). "Cal" -- as Billy calls him --

has been on the board since 1994, and often advises on corporate governance, new product

development, and pharmacological issues. Like Twee and Billy, Cal has had the occasional brush with the

law, but he feels he's quite literally a richer man because of it.

Donald Dump is a billionaire and television star who has served as a mentor to David Gardner since

1998. He brings his passion for deal-making to a management team that has often been shy about

maneuvering for advantage in negotiations with partners and stakeholders. Tom Gardner credits "DD"

with helping the Fool to see the wisdom of going public at the current time.


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Our state-of-the-art boardroom.

Executive Compensation

Tom Gardner is outraged by excessive compensation on Wall Street, and has therefore decided to

accept only $1 per year in salary. In recognition of such selflessness, the board has awarded Tom a one-

time equity grant of 4,000,000 shares of common stock. Tom will also receive 1,000,000 shares of

common stock per year for life. The board has also agreed to pay him $2.5 million per year for

"security." Not all of Tom's stock picks are multibaggers -- though to be fair, many of them are -- and

that sometimes leads to disgruntled investors. A security detail is just a necessary part of the business

we are in.

David Gardner is not quite as outraged by excessive compensation as his brother, so he'll be taking the

usual Foolish executive compensation package of $5 million in salary per year, and 1,000,000 shares of

common stock per year for life. David, whose picks have been performing very well of late, has decided

to forego his security detail. David has agreed, however, to payments of $275,000 per year for financial

planning advice. David has always considered himself more of a stock picker than a 'personal finance"

guy.

As the CFO, BillyGardner will pay himself out of retained earnings each year. In those years with

retained losses, he'll see what's available on the balance sheet somewhere. Billy has also been awarded

Redskins tickets for life (he loves football almost as much as accounting!). He will also receive a one-time

stipend of $776,000 in order to furnish his new office.


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Risk Factors

Investing in our Class A common stock involves a ludicrous degree of risk. You should carefully consider

the risks and uncertainties described below, then take a break for a snack, turn on some reruns, and

forget all about this. Any of the following risks could materially and adversely affect our operations,

results, personal hygiene, and willingness to go dutch.

Risks Related to Our Business and Industry

You should consider our business and prospects in light of the risks and difficulties we may encounter in

the rapidly evolving financial services industry. You should also call your mother more often, because

she worries.

These risks and difficulties include upside risk, downside risk, leftside risk, rightside risk, backside risk,

dockside risk, risk of playing too much Risk, and include our ability to, among other things:

Identify competitive advantages (some, any); Successfully maintain desired hydration levels to optimize competitive advantages; Invent complex, obscure acronym-based investment vehicles that later implode in order to

establish peer status with leading financial services companies;

Invent complex and obscure secret-bro handshakes to cement peer status with said financialservices companies;

Staff headquarters with unpaid interns or similar form of slave labor; Develop and subsequently preserve reputation for looking out for individual investors as the

most effective method of fleecing individual investors;

Fend off falcon attacks; Effectively monetize our toilet facilities, including training of public toilet sales force, to create

additional revenue "stream"; and

Achieve exceptionally close shave on daily basis.Failure to manage these risks could harm our business and cause hawks to get ideas about attacking us,

too.

We also bear the risk that all of the other risks are not as risky as we thought they were and we have

risked too much in trying to avoid those risks. We call this second-degree risk, and it is very risky indeed.

Even typing this sentence incurs third-degree risk (please see "thirdhand smoke"). Likewise this

sentence about the previous sentence is loaded with very nasty fourth-degree risk, and we hesitate to

even end in a period out of the fear that (we are not going to say what, but you are probably catching

on) would happen, so the best thing, barring the possibility of ellipsis risk, would be to....

Please note that whereas some risk can be diversified, avoided, or mitigated, some risks just want to feel

understood.


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Our financial forecasts may not be accurate and we may make mistakes in operating our business.

Sometimes things may not work out the way we plan. That might be because conditions change,

we didn't understand the competitive environment, we weren't as good at our business as you thought,

our forecasts were based on the infinite continuation of recent trends, or because we really, really

thought that people would like the taste of New Coke. In the unlikely event that we have made a

mistake, you could lose all your money, and we might have relocate to a country that will not extradite

us to the U.S. Don't say that we didn't warn you.

If a butterfly flaps its wings in Africa, in a stochastic universe, this could cause another butterfly to flap

its wings. In flapping, it is unable to use its proboscis to tap on the tiny keyboard it uses to access the

Internet. Hence it is unable to subscribe to Motley Fool Stock Advisor.

Multiply this, potentially, by the entire population of butterflies and we could lose out on a profitable

market segment that could be exploited by a competitor and/or tattooed on co-eds' ankles during spring

break.

Our ability to remain intellectual could impact our competitive position.

Our product is highly contingent upon sustained periods of critical, analytical, and otherwise intellectual

thought. In the past, our personnel have, collectively, suffered massive lapses in intellectual prowess.

Historically, these lapses can be traced to six primary distractive sources:

Bouncy balls Commercials with talking babies Pictures of cats doing hilarious things Impersonations of Arnold Schwarzenegger, most particularly in the airplane scene ofCommando Exploding cigars The Internet

If, on account of these or any other variety of distraction, our personnel should once more suffer a

prolonged bout of "the giggles," the results could negatively impact the quality of our investment advice

compared to that of, say, a talking baby.

Our business operates in a high-cyclone environment.

No, seriously. Alexandria, Va. gets hit by TONS of cyclones. Once we saw a full mariachi band flying right

outside the window.


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We may not be successful in our efforts to not suck.

Much of our operational resources are devoted to suckage mitigation; however, a breakdown is

possible. Although we strive to not suck, we may end up sucking.

There is a distinct risk that we may be too sexy for this shirt, although technically this is a risqu

factor.

Self-explanatory.


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Principal and Selling Stockholders

Tom, David, and Billy are selling all of their outstanding shares in order to give the ordinary investor a

chance to get in on the ground floor of this remarkable opportunity. It was a tough decision, especially

since they feel it is extremely important for management to be completely aligned with shareholders.

Ultimately, they wanted to get shares into the hands of ordinary people, while also taking advantage of

a pretty attractive liquidity opportunity. All things considered, it became clear that selling everything

was the right thing to do.

Appendix

Core Values: Our core values are super important to us. So important, in fact, that we've created an

entire appendix devoted to them at the end of this document. Here they are. Enjoy!


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Documents

Motley Fool S-1