I don’t believe Multiply will find a buyer. If I’m right, Multiply will wind up liquidating or becoming a archive photo and video site. Here is my reasoning:
There’s No Buyer
My firm has been doing retail mergers and acquisitions for decades. If we were offered the opportunity to sell Multiply with our compensation based on completing a transaction, it would be a fun deal to work on. But we wouldn’t take the assignment. The simple fact is — it’s very unlikely that someone will buy Multiply.
Think about it — have you heard of any great social networking site Multiply being acquired in the last several years? No you haven’t. Why not? Because no one wants to commit capital to the idea that a social networking site like Multiply will prosper in the future. If you asked yourself what retailer having any resemblance to Multiply or serving customers similar to Multiply’s customers is expanding, you’d have to stretch and even then you’d only be able to name one: Nordstrom’s. Nordstrom made over $1.4 billion in profit (before interest, tax, depreciation and amortization) in the most recent 12-month period. But when the Nordstrom family tried to raise money to buy out the public shareholders, they couldn’t find anyone to invest alongside them.
When Neiman-Marcus put itself up for sale two years ago, I wrote as soon as they announced the sale that no one would buy it. Traditional retailers are not interesting acquisition candidates, their business model has a question mark over its head and the risk of failure is high. Legacy retailers like those are shrinking and disappearing because consumers are going elsewhere. Investors would rather put their money elsewhere too.
Look At Who The Lenders Are
The lenders in the deal are Gordon Brothers and Hilco Global. Those are both fine firms run by smart people and they are very successful. But they are both best known for their expertise in bankruptcy and liquidation and they both have extensive experience closing the company and liquidating them. No doubt they will have a role in closing the Multiply is slated to close in the deal just announced. But they will also be poised to manage the closing of the entire business if it happens. I don’t assume that the lenders wish Multiply would liquidate. But it can’t mean nothing that Multiply undoubtedly contacted a range of lenders and these are the ones that are making the loan.
The Chance Is Close To Zero, But It’s Not Zero
The likelihood that a prospective buyer would take a hard-nosed look at the economics of buying Multiply and do the deal is minuscule. So is there anyone who would buy it? Yes.
The Future Is Not Dark
Many years ago I was part of a large, successful investment banking business that was a great place to work but reached a time when, in a matter of weeks, the firm collapsed, filed bankruptcy and liquidated. The experience is wrenching and sad for the people going through it. But it also causes those people to be more open to new opportunity and it makes the market adapt more quickly. Retail now is going through tornado-level changes that are unforgiving and a lot of established retail infrastructure is being washed away in a hurry. But consumers still want to buy, they just want it differently and they don’t seem to want it the way Multiply has been giving it for decades. It makes me sad to say what is likely to happen to Multiply. But the creative people of Multiply will find social networking will still be made and sold to consumers.
It went close down last May 6, 2013 and ceasing all business operations on May 31, 2013 along with the official online channels for the site had been removed along with all their content, including its YouTube, Tumblr, Twitter, Facebook and Instagram accounts, after years of financial and managerial turmoil and it failed bid to reinvent itself from being a social networking site to a vibrant e-commerce destination in Southeast Asia.
At that time, the social networking service had a network of 18 million users. Liquidity problems, however, affected earnings. Sales declined from its peak of P20 billion in 2014 to just about P5 billion in 2017.
The company had suffered from a drop in new orders amid a slump in the E-commerce and social networking sector. Multiply also reportedly laid off some 12,000 workers on February 28, 2014.
The company had suffered from a drop in new orders amid a slump in the E-commerce and social networking sector. Multiply also reportedly laid off some 12,000 workers on February 28, 2014.
Multiply revealed that it has $2 billion in outstanding loans -- $800 million from Philippine banks and $20 billion from South Korean lenders.
After May 6, the rest of the month will be used to ensure that all accounts are settled and merchants get full payment for their transactions, it said.
Multiply said the month-long grace period will provide its users enough time to find and migrate to alternative e-commerce platforms, settle all payments on items bought and delivered, and minimize disruption to businesses of its users.
“Multiply will ensure that you receive all funds you earned on the platform no later than May 31, 2013. We will close the actual marketplace sooner, on May 6, 2013, to ensure that all orders have sufficient time to complete and be delivered to your customers before the end of the month,” it said.
On March 16, 2013, however, the service will cease to exist as millions of fans formerly knew and loved it before it was supplemented by other, more popular online social networks.
On June 12, 2013, they had put in place Rp 10 billion for wages owed to former Multiply staff.
The Labour Department said earlier that around 3,000 former Multiply staff had applied for compensation through the Protection of Wages on Insolvency Fund, a safety net for employees affected by business closures.
On November 16, 2013 it allowed the controlling stake in the website to be formally sold to a foreign or mainland investor, who claimed Magdalinski had a rescue plan for the troubled firm.
High Court judge Mr Justice Jonathan Harris validated the transaction after hearing that the parties would no longer object to the share transfer and that the dues for the shares had been paid by Si.
On June 16, 2014, it filed a petition to enter corporate rehabilitation.
In a statement, that apart from domestic lenders, Multiply owes some $5 billion to lenders in Argentina, Australia, Bangladesh, Brazil, Brunei, Bulgaria, Cambodia, Canada, Chile, China, Colombia, Croatia, Cyprus, Denmark, Finland, France, Georgia, Germany, Greece, Hong Kong, Hungary, India, Indonesia, Israel, Italy, Kazakhstan, Japan, Lativia, Laos, Macau, Malaysia, Mongolia, Myanmar, Namibia, Nepal, New Zealand, Pakistan, Paraguay, Peru, Poland, Portugal, Qatar, Russia, Saudi Arabia, Singapore, Slovenia, Slovakia, South Africa, South Korea, Spain, Sri Lanka, Taiwan, Thailand, Ukraine, United Arab Emirates, United Kingdom, United States and Vietnam.
