Liquid Audio: Better off dead?

mgeneral writes "It seems so for the shareholders. Liquid Audio, had only $150,000 in revenue but managed to lose $5.6 million last quarter. Its main asset: A pile of cash. In fact, so much cash, that if they close the doors, they could pay back the shareholders more per share than the current stockprice...and thats exactly what some investors want them to do." We've run stories on Liquid Audio before...

Comments

Liquid Audio should die

[locarecords.com]

Seems to me time for Liquid Audio to die. There is no point throwing good money after bad and the shareholders can then invest in something new (if they aren't too scared off the Stockmarket ;-)

But then turkeys don't vote for Christmas and I'm sure that managers won't vote to sack themselves...

www.locarecords.com

The Arguement

[evilviper]

The argument is that the business isn't going to work because there are too many competitors who do what Liquid Audio does but do it for free.

"Their business model doesn't work."

So, umm... Why did they invest in the company in the first place?

Re:The scoop

[JanneM]

For a public company, their responsibility is to make their owners/investors happy, and those are the stockholders. If the stockholders determine they want a profit, that's what the board is obliged to do. If the stockholders only priority is to have all company assets painted light blue, the board will hire painters. The stockholders can force a stockholder meeting (or simply wait until the yearly regular one), and vote to kill off the company and divide up the assets. They could also vote away the board of directors, realign the company as a healing-crystal business or whatever.

If a majority of votes (where the needed majority is regulated in the company charter) decides it is better to just throw in the towel than to continue, that's what will happen.

/Janne

Talk about Nerve

[mbone]

Let's see -

The CEO is making $ 500K per year.

Another co-founder is also making $500K per year.

All of this on revenue of $600 K per year.

And they say that shutting it down would ''...not represent[] the interests of all the shareholders.''

Do the words "bloated" come to mind ?

How about nervey ?

How about stupid ?

In my opinion much of the dot-com money was "value-subtracting," in that they took good money and did stupid things. Enough people did this that it poisoned the ability of real businesses to make real money, because the marketplace was conditioned to assume that things that cost money actually should be free.

I cannot think of a much better example of a value-subtracting business than Liquid Audio.

Shut it down.

Yeah, piss it all away.

[Mulletproof]

My God, people, don't you realize the ace in the hole this company has? 90% of the dotcom's out there would kill for the hard capital this company has. In fact, it's the entire reason the .com bust happened-- All these companmies were venture capitaled to the hilt without any real assets of there own. When they hit the wall, they hurt their investors... Bad. Hell, after umpteen years of existance Amazon.com has only recently posted in the black. And don't think Bezos wasn't sweating bullets every day until that point, because if confindence for one minute faded in his ability, he was so far in the debt hole not even confidence could escape. Not your debt or my debt, but high millions debt. And that's not counting how he had to deal with his workforce (damn near 80% temps-- Hire em, fire em, hire em fire em...) to finally get above water. But for Liquid Audio to actually have assets... Unless the their problems were seriously irrecoverable, that's a major advantage to just piss away. I guess it's all about money now as opposed to long term success. Why not.