SFX is really in trouble now.
After struggling with a “deeply embarrassing” hold on payments through it's online store Beatport and plenty of stock controversy of late (including a lawsuit from former partner Paulo Moreno), Roger Sillerman's SFX is sinking into an abyss of more and more trouble. As the New York Times reported this week, their bid to go private (again) has failed.
This week, facing a deadline to take his company private on Thursday, Sillerman was unable to find a buyer. Now, he's considering lower bids to try and sell the falling company as a whole or potentially in parts. His original offer of $774 million came back in May when he bought all shares in the company and that offer has not been met (or hardly entertained). This leaves many questions – especially about the future of SFX – which controls Beatport and many festivals that Sillerman has acquired.
Since it's inception three years ago, Sillerman has bought into as much festival ownership as he seemingly could – and he still owns Tomorrowland, Electric Zoo, and Mysterland (New York) for example.
The New York Times report shows that no one is budging. One analyst, Richard Tullo at Albert Fried & Company told the Times, “We continue to like the industry. But these guys aren’t doing anything right. They’re not managing the business correctly.”
In reports from InvestorsHub (via Lessthan3), revealing quotes from SFX confirmed today that they have “authorized the continued exploration of strategic alternatives for the Company, including the sale of all or substantially all of the Company’s assets in whole or in part.” You can read more here on Billboard.
Until October at least, the company will be considering their options. In a statement from the members at SFX, “unless an alternative transaction is reviewed and approved,” Sillerman is expected to be gone by the end of the year.
After their initial IPO, SFX's stock was valued at $13.00. Sillerman later acquired the remaining shares for $4.75 and held down a final offer of $5.25. As you can see right now, it is currently valued at $1.39.
Read more here from the New York Times.