News about the Investigation of FriendFinder Network is starting to percolate across the net. I just got off the phone with Gary Menzer the lawyer in charge of the investigation, who gave some additional insights.
The investigation is related to how brokers represented Friend Finder Networks and how authentically they addressed the risks involved with the IPO.
Many litigants that contacted Gary’s firm say they were not aware of exactly what FriendFinder was or that a significant amount of its publishing empire was adult content. Brokers were saying that the deal was only being shared to their best customers and that “we’ll be in and out.”
The company’s IPO occurred on May 10, 2011. The company offered 5M shares each for $10. This was at the low end of the $10 – $12 initial price range. The company had originally planned to sell 20M shares in February of 2010. However, the company decided to delay its IPO. This offering raised a total of $50M. The lead managers of the IPO were Bank of America and Citigrou. (via wikinvest).
For the full year 2010, FriendFinder reported a total revenue of $346M and a net loss of $43M.
I’m a bit slow on the newsreader this morning (beach brain). It turns out the this morning it was announced that FriendFinder Networks Inc. agreed to pay Broadstream Capital Partners Inc. a total of $15 million to settle a long-running breach-of-contract lawsuit.
Mixed news for FFN. Then there’s still that $450 million of debt that needs servicing.
