We’ve all seen tough outcomes, but this one is especially unfortunate for shareholders and staff at Spinvox –
The BBC just reported that Spinvox, which had raised £100m and sold to Nuance for £64m ($102m), was only able to return £600 to investors. This was after repayment of a £30m loan (about a third of the proceeds were in Nuance stock, which explains part of the difference). That measly 600 pounds was distributed pro-rata to holders of 1.9m Series A preferred shares, and 5.3m common shares were apparently worthless. According to a letter sent to staff obtained by the BBC –
“Under the Transaction, a total of around £600 was paid for all the shares, with holders of A shares being paid in priority to ordinary shareholders. Ordinary shareholders received no payment for the transfer of their shares and therefore any of the options that you held under the above Plans were “underwater” immediately prior to the Transaction, that is, the exercise price of the options was higher than the value of the shares that you would acquire on exercise of the option. This means you would not have realised any financial value from your options at the time of the Transaction.”
Not sure if investors got checks or petty cash – can’t imagine the amounts were big enough to justify a wire transfer.
So Nuance managed to get 100 terabytes of audio and transcribed data, as well as some impressive global customers, for a fraction of the price they would have had to pay in happier times.
It will be interesting to see what happens with the new Nuance/Spinvox combo in 2010 . . .