SFX Entertainment (NASDAQ: SFXE), the company led by Robert FX Sillerman that set out to conquer dance music with $1 billion in 2011, is reportedly exploring a fire sale of its assets including Beatport and ID&T after the TomorrowWorld catastrophe hammers another nail in its coffin and brings stock prices to a new low.
Less than a month after ID&T, an SFX property and proprietors of the Tomorrow events and others, was forced to cancel its debut One Tribe festival in SoCal, a lack of preparation for adverse weather at Georgia’s TomorrowWorld has brought ID&T into the hot seat again, and SFX’ stock down to where it currently sits at around $.45 a share. Aside from the obvious problem of having fallen from the stock’s initial public offering value of around $13, according to NYSE standards, stocks trading below $1 per share for 30 days must either find a way to boost their value or risk being removed from the exchange. SFX hasn’t seen $1 since the beginning of September.
According to sources at the New York Business Journal, SFX is looking to have what the industry calls a “fire sale,” during which a company jettisons its assets after a disaster to raise emergency funds and stop the financial bleeding, so to speak. Sources also noted that SFX overpaid for many of its power-move buyouts during its shopping spree, compounding their present value crisis. Other properties that could be up for sale on the cheap include Totem OneLove, React Presents, and ticketing company Flavorus, to name a few. Stock prices fell to a new all-time low of $.42 Sept. 28 after news surfaced of TomorrowWorld’s cancellation and SFX’ massive refund liability to roughly 190,000 ticketholders.
The TomorrowWorld disaster comes on the heels of a staggering number of SFX debacles in addition to the One Tribe cancellation including a near-riotous artist payment hold from Beatport, a $100 million lawsuit from former partners, and Sillerman’s welching on his go-private deal.