Shareholders "likely to face complete loss on their investment."
How do you solve the problem of a biz built on what is essentially a solid foundation but ruined by a “failed acquisition strategy” and facing various law suits and an investigation by the Australian Securities and Investment Commission?
Hoist a white flag and call in the administrators. It’s a way a company like SurfStitch that ain’t doin’ so well, maybe it has a viable biz but needs a little time to steady the ship, can keep creditors at bay while an administrator works out what the hell it should do, if it’s viable and so forth.
Although, as reported today by The Australian,
The long-troubled surf and sports products online retailer SurfStitch has collapsed into voluntary administration, ending the public life of one of the worst floats on the market in recent years, leaving its shareholders likely facing a complete loss on their investment.
“SurfStitch has the ignominy of being one of the worst performing floats in recent times. Set at an IPO price of $1 when the company floated in late 2014, the shares soon crashed following a string of profit warnings, class action law suits, failed acquisition strategy and then the shock loss of one of its co-founders and co-chief executives Justin Cameron soon after its float.
“The long-troubled surf and sports products online retailer SurfStitch has collapsed into voluntary administration, ending the public life of one of the worst floats on the market in recent years, leaving its shareholders likely facing a complete loss on their investment.”
“The cracks started to show in SurfStitch soon after it floated on the ASX, with the company plunged into turmoil in March 2016 when Mr Cameron quit via a one-line email to the board, as he joined forces with a private equity firm to launch a possible takeover of the group. SurfStitch, led then by chairman Howard McDonald, had been scrambling since to regroup executives and integrate the businesses that SurfStitch bought up since its $83m float in late 2014.
“In 2015, SurfStitch kicked off an acquisition spree, as it extended its reach beyond online retailing of surf and sports goods – which was its original business model – to buy up a host of other companies. SurfStitch paid $23.7m for specialist global water board distributor Surf Hardware International and prior to that paid $21m for Stab, a leading online surf content platform, and surf forecasting network Magicseaweed. It also bought Garage Entertainment and Production for $15m.
“Many of those deals failed to deliver the returns SurfStitch had hoped for.”
“Earlier this year, law firm Quinn Emanuel filed an open class action in the Supreme Court of Queensland for anyone who bought or held shares between August 27, 2015, and June 8 last year included in the litigation. It represents a potential $100m lawsuit.
“The plaintiffs allege Surfstitch was trading at a loss in August 2015 but announced that it was expecting EBITDA to double in the 2016 full-year. Surfstitch allegedly covered up the loss by entering a series of copyright licensing deals with surf technology group Coastalwatch and Three Crown Investments.”
A meeting on September 5 will update shareholders on the progress of the administration and what sorta cut they might get out of their seven cent shares.
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Can you screenshot? I’ve never heard of surf people using PCs before.
How about rebranding as Sub(teranean)Stitch? To accurately give an indication of share price expectations.
StitchUp?
Double-Crossed Blind Stitch?
this probably explains it better than I can: http://www.thebusinessofsur…
Looks like they have dumped the shell companies so that the courts will only be able to collect the indemnity insurance money from them, rather than being able to go after the assets of the actual trading entities (the website, stab etc.)
Im speculating on them doing the classic ol’ phoenixing move. Look out for StitchSurf coming soon.
I’m amazed that the concept of bitcoins actually got traction and took off like it did.
I wouldn’t say it’s in total collapse just yet. It looks as though they are winding up surfstitch group and surfstitch holdings, whilst keeping the trading arm open.
Since the class action is levelled at the surfstitch group, they probably have done the only thing that they could have in their current situation.
Don’t trust dem Indonesians! Allahgeddon is coming.
I thought you could only spend Bitcoin on dark web sourced drugs, computer games and child porn. In light of that, don’t feel too bad.
yeah. and….?
selling ‘surf’ rags is not surfing!
and who wants to buy a T-shirt for $110.00 off the main page:
https://www.surfstitch.com/…
OUTERKNOWN
Ono Stripe Mens Tee
$110.00
On September 5th, shareholders are going to be bummed when they find out the crummy pastries and cold coffee served at the meeting is the return on their investment. That and a ball-point pen with the administrator’s name on it.
what, no lanyards? the stakeholders deserve more synergy across multiple platforms.
Lanyards made out of twine. However, there should be no expectation of free parking.
The real question is: who are these people who cashed the fuck out on all of those companies at the perfect time? Geniuses.
so what was the price paid for Stab afterall? It was grouped with Magicweed. You boys think you`ll ever get something similiar for this shitshow?
Story coming soon!
Does this mean my Modom Shark Repel Leash is still on the way?!
I read this on a mainstream media website hours before. This was your chance to break a big story Derek and you blew it. Beachgrit = surf journalists quoting real journalists covering surfing. How do u carnts make a living from this website (serious question)?
Well look at Mr Smarty Pants getting his info from a “mainstream media website hours before” We don’t hang there brah. Derek and Chas are our one click beyotchs.
let those Hot Nife checks roll in!
We’ll be your one-click bishes forever!
You sure take this style of journalism very seriously.
If people make a living off this style of journalism then it should be taken seriously. I’m genuinely curious how this site and its writers make money though. Not even trolling.. how does it work?
Does the satirical aspects just go well over your head?
Ever heard the term hobby?
If it is just a hobby that makes no money I apologise for my ramblings
there’s no money! is it ok now?
That makes it better
Apologies, but Derek teaches tap dancing to the children of Sydney’s elite from 5-7pm weeknights so unfortunately for us he misses the odd breaking story.
This may also explain how this website survives, that and the bossmen writing elsewhere not necessarily about surfing for $$
the real question is do Moder8tors get paid or you just do this for kicks?
Now that I killed the Disqus adverts? Other than gracious emails, I get nada… I do hope that one day when Slater finally realises that BeachGrit is his communication outlet to the World he will carry me in his arms to the edge of his lastest chorine creation, lay me gently on a waiting slater design and push me into the first wave of the day.
Make sure that is included in the share float of NEGATRON INDUSTRIAL CORP.
The question is a very good one and I’ll answer without resorting to the flowery prose I normally use to cover my journalistic shortcomings. I got the announcement, like everyone else, around two-twenty. At two-thirty I gotta scoop up my boys from school. Childhood disappears fast. I don’t like to miss a second. The issue here is, do I write the story, which’ll take half-an-hour, forty five minutes, and miss the kids or figure no one’s going to touch it in surf and post it later after jiujitsu lessons, frolicking with cavoodles, including a hot shower for these animals love water and getting their smooth little stomachs cleaned with human hair conditioner, and a little late socialising with pals? I went with the latter. It’s a long, slow train wreck anyway and it’s not, despite the headline, exactly “breaking”. I quoted the biz writer ’cause he knows biz, I don’t, as overwhelming evidence demonstrates.
Flowery prose be damned!
But did you get the same entertainment value from FAKE NEWS that you got from the Grit? It’s lazy, satirical, funny commentary on surf happenings. Embrace or GTFO!
“fin maker pops champagne and orders CNC machine”-me
So will Danny Johnson do even less Weak Wraps now? 😐
An expected ending nonetheless..