The headline from Reuters today left very little room to the imagination.
“Ashley Madison courted several buyers, landed none before attack,” the news agency wrote in a detailed report which sums up several key events of corporate life at Ashley Madison and its parent company Avid Life Media over the last couple of years.
This report came on the day after its founder, Noel Biderman, decided to step down, leaving the holding company and its operating subsidiary in difficult times as they have to face several allegations following the hacking of ashleymadison.com.
The adultery website is thought to have around 40 million of active users: the data dump on the internet could kill it, unless it finds an easy way to raise the necessary funding to cope with litigation risk, among others.
Millions, Not Billions
Litigation risk poses a serious threat to the group’s survival, particularly because you have to consider that Ashley Madison has been talked of as a promising IPO candidate for some time — one with a lofty valuation of $1bn! — but at the same time it has unsuccessfully tried to raise debt for years.
Now, this is the interesting bit.
According to Reuters, the company approached several lenders to borrow between $40m and $75m in recent times, but not a single financial institution would lend a penny to Ashley.
This doesn’t make much sense, really — it did not managed to raise only a few millions of debt at a time when bankers discussed off the record a $1bn deal targeting equity investors?
My banking sources have told me that nobody has ever performed a proper due diligence on any parts of the business, not even a basic SEO audit to determine the level of online investment in ashleymadison.com.
Our SEO analysis recently showed that the website itself had serious issues with its technical set-up, yet nobody in the banking world noticed that?
Dear me.