Updated to provide cached links to replace those that have since broken.
Big fallout at San Francisco’s online gift retailer, RedEnvelope. It has fired its CFO Eric Wong, after the company missed its numbers — and is still losing money.
Wouldn’t be interesting to us, if it weren’t for the fact that it was Wong who, back in August, stonewalled us when we started asking questions (scroll down) about a controversial transaction made by RedEnvelope — namely its buying of products from companies linked with an insider, namely Sequoia Capital’s Michael Moritz.
As we wrote here, co-founder Ian Chaplin became confused when RedEnvelope executives told him about a $2 million acquisition of Multimedia Live, an e-commerce software that Chaplin didn’t think was flexible enough for the company’s needs. He also didn’t know why RedEnvelope wanted to get rid of a competing product that worked, Broadvision. He didn’t get any real answers, he told us.
Chaplin and co-founder Scott Galloway confronted Chairman Michael Moritz about this, but they said Moritz went ballistic and said he would remove Galloway from the board. The next day, Moritz first disclosed to the board that his firm, Sequoia Capital, had invested in MML and some other vendors RedEnvelope had bought products from, Galloway said. RedEnvelope then hired an investigative firm to look into Galloway’s affairs, he said.
Moritz and RedEnvelope still really haven’t explained what happened. Neither the company nor Moritz ever responded to our calls. But we did manage to catch Wong at his desk one evening, who said he couldn’t comment. (Note, the cryptic nature of their communications also led to a mis-communication, in which we were led to be believe Wong was their attorney, and thus the mistaken reference to him in the story. We should have checked.)
No, we’re not saying we know anything really bad happened here. It’s just strange that they’ve been so ostrich-head-in-the-sand-like on all this, when all that sufficed was a simple explanation — perhaps by email. In any case, wonder if they’ll talk about it now?