Oops.... that would be a domino folks, and it's going to spread.
(PrivCo EXCLUSIVE): LIVINGSOCIAL Receives Emergency $110M Debt Infusion From Existing Investors With Oppressive Terms, JUST DAYS FROM BANKRUPTCY, Effectively Handing Over Distressed Co. to Today's Financing Participants...Implied Valuation: JUST $330M, DOWN 94% FROM $5.7 BILLION In Dec. 2011 V.C. Round..
Looks like a convertible-debt deal -- commonly known as "death spiral" financing, and if this report is correct it has basically all of the sorts of characteristics that we saw during the nose-over-toward-ground style deals in the early part of the 2000s.
This one will be a lawn dart, I expect, having shed its wings this morning after exceeding the airframe limits.
LivingSocial Inc. Chief Executive Tim O'Shaughnessy said the daily-deals company has no immediate plans to file for an initial public offering, citing a flush revenue stream from its coupon business and the lessons learned from other tech IPOs.
Learned much, you did..... NOT!
Update 2/21 4:13 -- There are now questions about the original story that sparked this. One of the problems with private firms is that disclosure is, well, not public. The CEO is obviously*****ed and shot back with a letter that was leaked. The Delaware corporate filing is available at the second link. What is, however, clear is this -- there does appear to have been some sort of cash crunch, companies like this have interesting balance sheets due to the basic business model they're operating on.
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