Mystery Inside Investor Sells Stake in Linden Lab
by Alphaville Herald on 19/06/09 at 1:20 pm
Someone unloaded their Linden Lab holdings – but who?
by Pixeleen Mistral, National Affairs desk
With reports circulating that an individual investor's equity stake in the Lab had been sold to Stratim Capital, the rumor mill can be expected to go into overdrive speculating about exactly which insider sold their shares – and why.
Stratim Managing Partner Zach Abrams is reported to have said his firm "bought almost the entire position of an existing shareholder". Abrams also said the shareholder who sold out was not one of the venture capital firms that have funded Linden Lab to date. Avoiding the VCs may make some sense from Stratim's point of view – their web site claims "to target individual investments of $3-5 million".
While Stratim specializes in "late stage companies with profitable opertations and strong business prospects" at least one current or former Lab insider has apparently decided that their personal financial interests and the Lab's have diverged. The whirring sound you hear is the Second Life fanboi press revving up their spin – as well they might.
As M Linden continues to place his mark on Second Life there have been a number of recent high profile departures from top management – Cory, Robin, Zee, and Ginsu Linden come to mind – a group the previously handled technology, community, finance, and legal/business development areas. The equity stake sell off is sure to add a certain frisson to the speculation — was the sell off for personal cash flow or due to bad feelings about future prospects for the Lab?
PulseBurst Flow
Jun 19th, 2009
no comment
Alex Ponebshek
Jun 19th, 2009
Don’t need no speculation! Adult Island is why the insider sold all the stock.
Second Life’e economy is powered by porn, and it’s going to wither.
janeforyou Barbara
Jun 19th, 2009
You sell stocks if :
*you need cash
*you make money on the sale
*you dont make monay and want to pull out
*you dont belive in the company or the marked
You buye stocks if :
*you got lots of cash
*you think you can make mony
*you belive in tha company and marked
Stocks changes hands for many reasons, this are just some of them.
If the number of stocks are hight you get in a desiding vote and you can change tings..
From what i got info on LL got a stock capital on $19 mill—a $5 mill stock post wil give a 26% share part and can be a desiding vote on the board.
So yes it wil be exiting to se how this wil turn out..lol.. but i can also just be a “moving” of power.
pull it outta me scott
Jun 20th, 2009
Somebody got out while there was still some money to pull. I wonder who will be next…
Just Me
Jun 20th, 2009
it amazes me that people always forget that .. for everyone who sells stock, someone else buys that stock. The person buying obviously has faith in the company and feels the stock is valuable and will increase in value.
The person selling doesn’t necessarily sell because they lost faith in the company. Perhaps they were retiring and wanted a stake to buy a boat to sail around the world. Perhaps they founded a new company and needed capital to fund it. There are hundreds of possible reasons that have nothing to do with the doom and gloom that people seem to assume.
or then again...
Jun 20th, 2009
Then again this running away with the money thing might not be so hard to understand after all. The real story which is happening right now TODAY is that the new 1.23.4 SL Client has been SO BADLY BOTCHED by Linden Labs in the graphical framerate department, and other areas, due to them wanting to get the SEXUAL FILTERING rolled out quickly (because even more people are getting pissed at what LL is doing to their Sex Trade with forced moves etc.), so badly botched that it is crashing almost everyone who tries to use it, and finally people are throwing their hands up in the air and giving up. LL evan had to divert comments away from their main blog because they were so violently NEGATIVE towards the Lab and their new broken client. For shame for shame…
LOL
Jun 21st, 2009
just another rat jumping the virtual ship
BRAVO LINDEN LAB
IntLibber Brautigan
Jun 21st, 2009
If the stake was truly 26%, then it could only have been either Mitch, Phillip, or Cory. We’ll see if Mitch remains on the board or Phillip remains as chair. If both stay, then it was Cory, which isn’t surprising.
However, I doubt it was that large a stake. Blocks of LL stock have sold for 500 million dollars. The initial capitalization of LL, that janeforyou quoted, was what they started out with a decade ago. LL’s annual revenues from tier alone easily exceed $150 million. They make a few million a month off L$ sales commissions and selling new L$ into the SL economy, plus theres fees for all the other stuff: sim moves, transfers, renames, uploads of files, advertising revenues, etc.
LL is thus worth a lot more than 19 million today.
For this reason, I’d say the block of stock being sold was from someone besides the founding troika who has left the company. Find out what each is doing now, if one of them is involved in an equity position in a start-up, there’s your man.
The published par value of shares of a nonpublic, unlisted company, has nothing to do with what its market value is. You need to look at their tax records to figure out their Net Asset Value per share. Evidently the VC firm buying the stake from the former employee feels that LL’s IPO prospects are very good. So do I. I predict we will see some announcement either at SLCC or before christmas in that direction.
janeforyou Barbara
Jun 21st, 2009
@IntLibber Brautigan
The 19 mill are the cash thay invested yes,, what a company got in value can be from 1$ to 500mill$ depending on PE and the marked.The investor marked right now are low.. so if The Lab got a net proffit at some like 35 Mill and the PE are 4 (as the marked are low) you may get a value on the whole company at 140 mill$ and then if the investing are 3 to 5 mill that a lill post at the Lab and you are a minor shareholder with nothing to say on any…i dont know but it just may be a moving of a sharepost. and not a outsider investor, not at this times. But this are guessing..i know to lill to go in to more fackts.
The cost to run this company are hight.. and thay wil ned large investments, its also a risky business.But the capital seam good from what i got of ifo.
Witness X
Jun 22nd, 2009
I wasn’t aware that Linden Lab was a publicly traded company, IntLibber – how can they have “stock” if they’re not publicly traded? Talking about sales of stock shares of a privately held company seems inane.
We
Jun 22nd, 2009
“Talking about sales of stock shares of a privately held company seems inane.”
No, commenting about something when you have no clue is the inane part d!psh!t!
Move along to something more your speed…like DRAMA…or google that sh!t and edumacate urself X.
Prokofy Neva
Jun 22nd, 2009
Intlibber is talking through his ass as usual, trying to appear to have some inside dope, and merely showing himself to be an inside dope.
People are right to ask “how can you talk about stock when it is not a publicly-traded IPO” — it’s a good question to ask. And the answer is: in this dry gulch of Silicon Valley’s worst recession and absence of IPOs in decades, and with global IPOs limited to things like a Chinese game company, the secondary stock, i.e. the stock options that employees are given, and which they sometimes get as a golden handshake, become what is traded privately and what is used to value the company. Read Fred Wilson on Facebook employee stock valuation for example.
It’s an important corrective to the market’s information about how to value a company, but it seems to me as a non-specialist as a rather odd thing to be declaring as a market — employee stock given out for free, so to speak, is a lot like Gaidar’s voucher system given out to Soviet factory workers and then scooped up by some oligarchs. Not really a market valuation, but a grab.
My guess for the Linden cashing out would be Zee, because I think he is bitter and would want to get out. The big three mentioned are all wealthy and have interesting things to do and aren’t bitter and don’t need to cash out.
What are Intlibber’s sources for these notions of how much secondary stock has already valued and sold? He can’t cite them? Oh. Then…how can we know they are true?
Why assume that the person selling shares left? Linden Lab may be like the KGB. You never truly leave.
Or, you could even have something like groups of shares from a bunch of staff still there, or departing, as it has been from Facebook, and not just one big person or one big troika. And…how can we know? We can’t. It’s not public.
Anyone who says the Lindens “make money” from “uploads” cannot be an expert. Because uploads of textures that you pay L$10 per upload are *sinks* NOT *sources* in the Linden monetary system; they are not a source of revenue for the Lindens directly.
Even if you fisk this up a bit and apply sophistry to show that if there are more uploads, and more sinks, the Lindens get to sell more Lindens themselves to keep the currency rate stable, it’s a stretch. Because it isn’t direct income, and because nobody has ever been able to correlate the strange figures of Supply Linden sales to anything that approaches rationality, i.e. seasons, or big events, or new continents or whatever. Perhaps we don’t have enough data over time.
The Lindens make more than $150 million in tier. They do have interest-bearing accounts, and they also have large fees for things like selling the rights to ESC to make a customized viewer. We don’t know all the deals like that which may have gone down, i.e. IBM behind the firewall.
In short, Intlibber should go back to publishing information about his own inworld stock dealings rather than speculating in frivolous fashion about the Lindens.
We
Jun 22nd, 2009
@Witness X
Or to put it more politely than my mouthy doppelganger, Second Life is privately owned but using “Venture Capital funding”, and the fact that someone bought such a large amount of stock all at once is a good thing not bad.
http://en.wikipedia.org/wiki/Venture_capital
We
Jun 23rd, 2009
“Or to put it more politely than my mouthy doppelganger…”
Even ‘myself’ is an inane dimwit. (And I’m the original not you We!) LOL
Venture capital? LOL Might be true in this particular case but answer the f’n question for f’cks sake, about how it can be so, that is to say, how private companies have stock shares for ‘start-up’rs’ equity holdings well b4 the company ever (if ever) goes public. The dumbshit meter on this one is SO max’d out it’s hilarious…from the self proclaimed “experts” to the nOObs. This is a whole new level of entertainment on this rag…
We
Jun 23rd, 2009
The use of We as a name is a reference, I don’t imagine you know it.
And honestly I’m not an expert on this and don’t claim to be, I just did some spot research on the subject to get some actual stuff to point in the proper direction, rather than just calling him a dipshit for not knowing.
We
Jun 24th, 2009
“And honestly I’m not an expert on this and don’t claim to be, I just did some spot research on the subject to get some actual stuff to point in the proper direction, rather than just calling him a dipshit for not knowing.”
Taking it personal always turns into serious bizness. Don’t! You weren’t the target of the “expert” comment. ‘We’ already knew you were not. And your “spot research” is ass (par-don ‘we’ for being mouthy again but this is the Herald ya know – LMAO). Stock holdings/equity shares in a private company or corporate entity doesn’t neccesitate venture capital. Pointing anything (or anyone) in the “right” direction requires a googlearch investment about twice what you’ve put into it; 4 minutes instead of 2.
Here -
“I wasn’t aware that Linden Lab was a publicly traded company, IntLibber – how can they have “stock” if they’re not publicly traded? Talking about sales of stock shares of a privately held company seems inane.” //Witness X
get your bearings again,
nimrod (ooops, again my apologies)
ROFL
We
Jun 24th, 2009
Sorry, your quality of writing is very poor, it’s often hard to tell who it’s aimless rage is turned on. Though at the very least, it makes sure that no one mistakes me for you, for which I’m glad.
I see you attempting to refute my claim, but I don’t see you giving any more evidence than “because I said so”. Stratim Capital specializes in Venture Capital, most of the sites referencing the buy out mention Second Life’s Venture Capital funding, therefore it seems fairly secure to believe that this is venture capital related.
We
Jun 24th, 2009
You’re a complete dumbass and sorry, your quality of reading is not fundamental.
“…how can they have “stock” if they’re not publicly traded? Talking about sales of stock shares of a privately held company seems inane.”
‘We’ could care less about the venture capital aspects, ‘We’ were addressing something more fundamental, but obviously a bit TOO fundamental for your grey matter. You LULZ me to sleep. So it’s worth restating before I hit the sack — The dumbshit meter on this one is SO max’d out it’s hilarious…
makomk
Jun 28th, 2009
*rolls eyes* Of course they still have stock if they’re not publicly traded. The stock is just, y’know, not publicly traded (and not listed on any stock exchange). Look up the rules for private companies in your preferred jurisdiction sometime.
Randall Wilson
Jun 22nd, 2010
M. Linden is definitely putting his Mark on Second Life with his signature raft of departures. Maybe the selling investor lost confidence in the CEO and the company’s future.
In an industry with a lot of colorful characters, there still aren’t too many CEOs who enjoyed dressing up in drag while in college, something which can be proven….no problem.
And whatever happened to that sexual harassment suit he was hit with while at Organic, Inc? Omnicom was plenty pissed. I wonder who the (un)lucky guy was who brought suit???
Yes, Mr. Colorful, that’s for sure.
Linden Labs should have checked his credentials a lot better. When he abruptly departed PWC he was supervising a group of about a dozen low to mid-level people, almost all of whom were fired within a couple of months of Mark’s departure. Sounds like a hot, really important function to me.