Last Chance For SoundCloud’s Investors To Vote For A Rescue Fund
In spite of all the efforts to try to keep the company safe and sound, seems that SoundCloud is reaching a no return road. Today, unless it’s investors vote for a 169.5 million rescue fund, the company will not be able to “continue as a going concern”, as his CEO has reportedly told investors.
For the last couple of months, rumors of SoundCloud closing started to become real. More than 170 employees were laid off (some of them even received the notice on their first day of work), offices in London and San Francisco shut down unexpectedly, and DJs and producers started to remove their music from the platform due to copyright issues.
With all this in mind, the investors have a hard decision to make today. Will they approve the rescue fund? The answer is not that simple, as the rescuing investment would be coming from 2 different groups, one of which will be seriously de-prioritized in recovering their cash, especially in case of fire-sale or liquidation. The problem is, if the de-prioritized group doesn’t accept the terms, the funds will not go through.
There’s another option, and it’s that perhaps this group can accept the non-preferential terms and keep the company going until the end. Once there’s no way out, they can pursue final liquidation or sell the company, which either way will end up changing the company as we see it today.
What does SoundCloud’s CEO and founder Alex Ljung have to say about it? Although he has not officially pronounced yet, it’s clear that he urges the investors to give SoundCloud one last chance. However, this does not necessarily means that he’ll have one last chance too, as, in the event that the rescue fund is approved, it’s not certain whether he’ll remain as the CEO or not.
The boat has been sinking for a while now, and SoundCloud’s remaining staff is showing a strong lack of motivation, waiting for the end to come. On top of this, the recently created subscription service “SoundCloud Go”, has been a massive fail, not being able to build-up a considerable amount of subscribers. Now, the Berlin based company has one last shot to stay alive, and it will depend only on its investors.
Is this the end of an era for SoundCloud? To be prepared for the worst, a Reddit user downloaded everything on the platform. It might be a good a idea for you to do as well.
H/T: Digital Music News