NBC aquisition of ivillage.com 1883
Is it within the Sarbanes-Oxley Act for ivillage to sell their Web site to NBC for USD600 million dollars? It looked as if they valued the stock at over 40-45, however the stock traded at 8.5 last Friday while the stock value, I thought, was at .12. (I can’t remember the exact details.)
It also seemed like the acquisition was being funded by a layoff, which is fine, but how did someone value a company that isn’t ecommerce, or doesn’t have a strong revenue stream(s) at USD600 million? Is that legal to do now, or is it setting up a terrible future situation for NBC?
harrywaldron last edited by
Hi Berta and welcome to the forums
These are good questions and most likely the transaction is legitimate from a SOX standpoint, as long as no deception or fraud has occurred in the process. Also, if companies are publicly traded on the stock exchange, the SEC usually plays a role in approving mergers, aquisitions, etc.
Sometimes companies will pay a premium for a website for strategic reasons that makes no sense from a current point of valuations. For example, Google recently purchased Youtube for USD1.65 billion and the company was most likely not valued at this price ‘on paper’.
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So many Internet companies have already failed (or are hardly subsisting) that it’s hard to understand why someone would want to jump in there, with the brand? ivillage? It looks like a major television network already has a solid ‘formula’ for creating a profit that always works. Why act like ivillage.com is the thing to go for. Youtube makes more sense to me, also since it’s google, they aren’t amateurs anymore… myspace makes more sense to me… victoria’s secret makes more sense to me… with the advertising…fashion show…etc…
I guess another concern is how much illegal activity will now be generated in a broadcasting company (TV Station) now that you’re introducing the Internet industry into their operations…? The environment will be ripe for so many problems that they aren’t accustomed to.
milan last edited by
As long as the transaction was properly reported in accordance with GAAP requirements, the acquisition cost would have no SOX relevance regardless of the purchase price.
So, it’s whatever the market will support… I’m sure that youtube.com will gain after every major network pays to be a part of it. : )