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Habbo's main investor withdraws finance

Habbo's main investor withdraws finance

Fri 15 Jun 2012 7:31am GMT / 3:31am EDT / 12:31am PDT
OnlineSocial

VC group 3i walks away from 16 per cent stake as Sulake reels from paedophile allegations

Habbo Hotel's key investor has withdrawn its support following a Channel 4 documentary exposing paedophile activity on the site's forums.

The venture capital group 3i owned a 16 per cent stake in Sulake, Habbo Hotel's parent company. The move follows the departure of several other key investors, including Balderton Capital, which owned a 13 per cent of stake.

"3i has actively supported the Sulake board in determining the right course of action in these very challenging circumstances," the firm said in a statement acquired by The Register.

"Following a board meeting today, we have resigned our board position and will cease to be a shareholder in the company."

After the broadcast of the Channel 4 documentary, Sulake silenced all chat in Habbo Hotel as it conducted an investigation. However, the European Commission has indicated it will step in, and potentially close the site altogether, if the company does not contain the problem.

3 Comments

Bruce Everiss Marketing Consultant

1,692 594 0.4
You can't just "walk away" from owning shares. They exist so they have to be sold to someone else.
So who is buying up these stakes in Sulake that are changing hands?
And how much are they paying?

People like Balderton and 3i don't just give valuable assets away.

Posted:2 years ago

#1
Agreed - they have been transferred, or reverted back to company ownership with the corresponding payment.

But the issue is bigger than just where the shares went - it would see the company may be a house of cards that could implode now the rock has been lifted and the lights turned on.

All those claims about protection, and investment seem to have been proven very hollow - and I don't see as many fan-boys flaming C4 for breaking the story - most have scurried away to their own private rock!

Edited 1 times. Last edit by kevin williams on 18th June 2012 3:19am

Posted:2 years ago

#2
@kevin but you can't just revert them back to the the company either with the corresponding payment.

The company would have to buy them back, but at what price? They couldn't even say a % of the current bank balance because that may screw the employees (redundancy/back pay) or other creditors if the whole thing implodes and goes into administration which could very likely happen.

Very weird.

Maybe they did actually walk away for fear of being tarnished.

Posted:2 years ago

#3

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