The $30 million transaction, first reported by the NYT, is reportedly being used by New York’s Bolt to pay a settlement of “several million dollars” to Universal Music Group, which had sued Bolt for copyright infringement. (See merger filing here)
Thus ends the topsy-turvy ride of Bolt, the company started in 1996 to target teenagers, and once backed by investors like Highland Capital, America Online, and Oak Investment with more than $66 million. It had even filed to go public in December 1999, with only $4 million in revenue and no profit — just as the dot-com meltdown began. It was forced to pull its IPO.
So co-founder and chief exec Aaron Cohen and co-founder Lou Kerner bought the company back from investors in 2004. Which is why Cohen tells the Times: “This deal is economically painful to Bolt shareholders…It is setting a precedent that companies that violate copyright at minimum risk litigation.”
Bolt apparently had revenue of $7 million by the end of last year. It had 5.3 million users in the U.S, according to ComScore Media Metrix.
GoFish, a two year old San Francisco company, went public last year through a reverse merger, so called because it merged with company that was already publicly traded but had no operations. GoFish has little, if any revenue, but has a market value of $134 million. GoFish.com had 1.4 million users in December.