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

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