We have the story of Cameo, a former unicorn worth $1,100,000,000.00 which now lacks the cash to pay a $600,000.00 court settlement.
I would note that the valuation, was always suspect, as it was largely driven by investments of Softbank, whose business model, as I have noted earlier, appears to be buying a large chunk equity of a company on the cheap and then increasing the price for smaller and smaller purchases until you have a valuation in the billions of dollars.
Joseph Kennedy, Sr., the first head of the SEC would probably call this stock fraud, but these days, we'd call it, "Pump and dump."
Needless to say, if we had decent financial regulator and financial prosecutors, they would not be doing their securities manipulation in the United States, and if the Japanese had decent financial regulator and financial prosecutors, Masayoshi Son would be experiencing the joys of a Japanese prison.
The app Cameo, once a unicorn and a pandemic-era distraction, has seen much of its valuation evaporate. The connection-economy darling rose to fame as an app that let users pay for customized messages from celebrities. At its peak in 2021, Cameo’s valuation reached $1 billion before plummeting 90% early this year.
And it just got worse. Last week a consortium of 30 state attorneys general fined Cameo for not properly disclosing when celebrities were paid to endorse a certain product. However, Cameo’s financial situation meant it couldn’t afford to pay the $600,000 penalty levied by the suing states. Instead the company will have to pay only $100,000, according to the settlement agreement.
During the settlement Cameo submitted audited financial documents from 2021 and 2022 that showed it couldn’t afford the payment. Cameo also provided more recent financial information from October 2023 that further proved it had fallen on hard times.
Cameo’s bleak financial outlook spared it from having to pay the full penalty. However, if the company were to break the rules again it would be forced to pay the remaining $500,000, which “would presumably send the company into bankruptcy,” said Jennifer Arlen, director of a program on corporate compliance and enforcement at NYU Law.
………
Cameo’s harsh financial picture makes it the latest in a line of former unicorns to have hit hard times. In March 2021, Cameo was flying high, with a soaring valuation of $1 billion on the back of a $100 million Series C funding round. Major investors like SoftBank, Google Ventures, Kleiner Perkins, and even skateboarding legend Tony Hawk all lined up.
Like I said, pump and dump.
The investors bought a part of the company for $100,000,000.00. You overpay, but this serves to increase the value at the IPO, so you make bank when the IPO happens.
And then there is the sales pitch:………
Cameo pitched itself as an alternative to talent agencies and managers that could help celebrities connect with their fans directly, while cashing in on their fame.
“We exist in an entirely different world today—one in which talent actually want to connect more deeply with their fans, and fans expect unprecedented access to the talent they admire most,” Cameo CEO Steven Galanis wrote in a blog post after the Series C round. “This funding will help us create the access and connections that will define the future of the ‘connection economy’ on a global scale.”
Yeah, this time, it's different. Always a red flag.
Seriously, the bezzle is obvious here . Where are the prosecutors.
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