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Ever since porn hit the Net there has been one thing that every porn provider has guarded ... almost with their life ... and that's what happening with their financials. Sure the tax man will get to see some of what goes on with incomings and outgoings but for every one else out there in the real world the financials of porn are a secret that's never revealed.

But that's all changed ... well at least it has for one leading brand in adult entertainment ... because the people who currently own Penthouse and Friend Finder/Adult Friend Finder want to go public and raise a heap of money through the share market.

The target amount the company wants to raise is $460 million dollars and of course they're going to do that by selling shares in the company. In other words they're going public and they're going to be the first adult company to do so.

So you could almost say that we're at a real watershed in the history of the adult industry. A well-respected brand has decided that it wants to come out from behind its cloak of secrecy and reveal all to the public. And it's already done that because when you head for an initial placement offer (IPO) of shares you have to disclose your financials.

Sounds good doesn't it ... at last we'll be able to look behind the veil and see just how much money these big porn moguls are making. It will be good to see the sort of money we could be making if we ever make the big time won't it?

And there's no doubt that these big companies are making huge amounts of cash because everyone knows that there's plenty of money to be made in porn isn't there? Hey we're in some really tough economic times but that's not going to have a major effect on the bottom line of a porn company is it?

Well if that's what you're thinking then you're in for a surprise because things are definitely not as rosy as you might think. Right off the bat there are two questions that you should be asking yourself about this sudden urge to go public and the answers will reveal a lot.

The first question is: Why do it when times are so tough and the stock market is way down ... and likely to go further?

The second question comes in two parts and basically provides the answer to the first question. Why does a profitable private company want to go public and reveal its inner workings to the world? And why, if they're so profitable, are they selling their soul to raise just $460 million?

The answer is: because they're not all that profitable after all. In fact they're just about broke ... they're in such dire straits that if they don't raise this money then the creditors are going to rip the company apart in an effort to recover whatever money they can for loans that far exceed the company's assets.

Sadly for Penthouse/Adult Friend Finder investors are taking one look at their financials and seem to be walking away because the company is so far in debt that no one sees any return on a potential investment any time in the near future.

But how could an adult business get into such a miserable situation that made going public an imperative? Well it seems that Penthouse hasn't been doing very well for quite some time now and it paid way too much for Friend Finder. However, without the purchase of Friend Finder and the revenues that purchase brought Penthouse may not have survived for very long at all.

Despite its poor financial situation Penthouse was able to borrow all the money it needed to buy Friend Finder because we were living in those boom times just before the bust. Then the financial crisis occurred and things went pear-shaped. All that money that the company had to borrow to buy Friend Finder was going to be repaid by further borrowings but that was no one wants to lend that sort of money to a company that is so heavily in debt.

So what's going to happen? Well my guess is that, in the current financial climate, the IPO is going to fail and the creditors are going to come knocking. And what happens to the assets of the company after that is just about anyone's guess.

I do think though that if you major source of income is selling memberships in Adult Friend Finder then it might be wise to start looking for an alternative sponsor to use for your dating traffic.

And what does this say about the rest of the industry? Some would suggest that it's a sign everyone is struggling but then not everyone goes around paying way too much for another company.