SFX’s Rocky Start to the Year
Between falling share prices, settling lawsuits, and securing fresh investments, Robert Sillerman’s dance events company has had a busy month.
Photo courtesy of the SFX website
January was full of ups and downs for SFX Entertainment—the events company that owns and operates several major EDM festivals in North America, including Electric Zoo, Mysteryland and Tomorrowland. Just yesterday, Robert F. X. Sillerman's company's share price tumbled by nearly 14% on the New York Stock Exchange, bringing the price of a share to under 10 cents. This comes after a turbulent year for SFX Entertainment, in which the company experienced plummeting stock, considered filing for bankruptcy, and faced legal action from its investors.
The EDM conglomerate is currently valued at $9.52 million. When the company went public in October 2013, it did so with a share price of $13 a share and was valued at over $1 billion.
While the stock market wasn't doing any favors for the events company, SFX Entertainment did find some financial respite in the settling of a class action lawsuit. Mixmag reported yesterday that according to documents obtained by the publication, SFX settled an outstanding lawsuit brought against the company by Paolo Moreno, an EDM promoter, and two other plaintiffs, who claimed that the idea for SFX Entertainment was Moreno's.
Mixmag reported that despite the lawsuit progressing through California's court system, it came to an abrupt end on January 22, when it was dismissed by the plaintiffs for reasons the publication did not expand on.
Sillerman, however, still has another class action lawsuit hanging over his head. In September of last year, a group of investors sued Sillerman for misleading them into thinking he had the financial resources to acquire the outstanding stock in SFX Entertainment he didn't already own.
On January 21, a day before the Moreno lawsuit was settled, SFX announced it had secured a much-needed investment lifeline from a Canadian private equity firm. In filings made to the Securities and Exchange Commission (SEC), Catalyst Capital Group announced a $20 million investment in the company. It remains to be seen if the eleventh-hour investment, and settled lawsuit, will be enough to save the ailing company.
When contacted by THUMP, a representative of SFX Entertainment declined to comment on either the falling share price, or the class action lawsuit.