Never Worth $5.7 Billion

Vice Media has filed for bankruptcy.

At one point, Vice had a market capitalization of $5,700,000,000.00.

That's a lot of zeros, but it appears that they were a mirage.

Vice Media filed for bankruptcy on Monday, punctuating a yearslong descent from a new-media darling to a cautionary tale of the problems facing the digital publishing industry.

The bankruptcy will not interrupt daily operations for Vice’s businesses, which in addition to its flagship website include the ad agency Virtue, the Pulse Films division and Refinery29, a women-focused site acquired by Vice in 2019.

A group of Vice’s lenders, including Fortress Investment Group and Soros Fund Management, is in the leading position to acquire the company out of bankruptcy. The group has submitted a bid of $225 million, which would be covered by its existing loans to the company. It would also take over “significant liabilities” from Vice after any deal closes.

My comment on the whole Unicorn phenomenon a while back applies. The sky high valuation was a function of a pump and dump operation.

………

Still, the dreams that Vice executives once had of a stock market debut or a sale at an eye-popping valuation have been wiped away. The company was considered to be worth $5.7 billion at one point.

By comparison, the New York Times Company currently has a market capitalization of $6.03 billion, and Vice had a market cap almost equal to this.

The venture capitalists pumped the market capitalization into the stratosphere, and doubtless sold off much of their stakes before the inevitable reckoning came.

It's fraud, pure and simple.