This might not come as any surprise to those who have followed the company’s ill-fated attempt to conquer the dance music world, but SFX Entertainment (NASDAQ: SFXE) is on the verge of bankruptcy following a horrendous third quarter.
The New York Business Journal reports that SFX, led by CEO Robert Sillerman (pictured), has “lost 45.64 percent during the past week and dropped 56.41 percent in the last four weeks.” The company reported poor third quarter results that were, according to analyst Rich Tullo of Albert Fried & Co., “significantly below Wall Street estimates,” generating only $113 million when it was projected to hit $190 million. As well, the company’s gross profit, $15 million, was well below estimates. “The company’s $300 million plus debt is unsustainable,” Tullo said.
SFX is currently looking to hold a fire sale of its assets, but Sillerman is confident that the assets will sell and at cost. Likely buyers include Live Nation and Anschutz Entertainment Group, the sporting and music entertainment subsidiary of Anschutz Corp.
“[SIllerman] bought all these great assets and properties in the EDM industry but did too much, too fast, over expanded without the right execution and on a leveraged basis,” Tullo said. “He got himself into a credit crisis. How’s that resolved? You pay off your debts.”
The news follows a series of unmitigated disasters for the company, including the TomorrowWorld catastrophe, a payment hold from Beatport, a $100 million lawsuit from former partners, and Sillerman welching on his go-private deal.