Guvera teeters on the brink after ASX refuses listing
Advertising-funded music streaming service Guvera has been dealt a potentially lethal blow with the Australian Securities Exchange refusing it permission to list.
The decision by the ASX means Guvera will no longer be able to run its planned initial public offering with which it aimed to raise $80m.
This afternoon’s announcement that the ASX has decided not to allow the float to go ahead leaves Guvera with no obvious means of continuing to trade given its high levels of debt.
A statement from Guvera, which would have had the ASX designation GUV, said that it is “reviewing its legal options and obligations”.
The directors of Gold Coast-based Guvera will be legally obliged to put it into administration if they do not believe the company has the means of covering its debts.
The decision by the ASX came just hours after the Australian Securities and Investments Commission clipped Guvera’s wings, forcing it to issue a replacement prospectus for the float.
If the fund-raising had gone ahead, it would have valued the company at $655m, despite having revenues put at just $1.2m in the last financial year. According to its prospectus – now removed from the Guvera website – the company lost $81m in the last financial year and lost $55m in the first half of this financial year.
Prior to the IPO the company had mainly raised funds – put at more than $100m over the last few years – mainly by selling shares to small self managed superannuation funds.
The company’s CEO is Darren Herft, who also owns AMMA Private Equity, which had led this sales process.
Herft. Source: LinkedIn
If the company does not survive, it is likely the super funds will lose most of their investments.
The company’s chairman is former Warner Brothers CEO Phil Quartararo.
Recent weeks saw respected players in the financial community question the basis of the listing, with former Groupon boss Rob Solomon labelling it “insane”.
Claes Loburg, Guvera’s president, tonight tweeted that it had been the most stressful week of his life.
Most stressful week of my life. All while giving up drinking. Day 7. 🙂 Could do with a whiskey now. But holding fast.
— Claes Loberg (@claesloberg) June 17, 2016
Guvera’s announcement:
Guvera Limited (Guvera) has received correspondence from its lawyers, Arnold Block Leibler (ABL), regarding a letter received from the ASX today advising that it has exercised its discretion to refuse the applicant (Guvera Limited) admission to the official list of the ASX. The ASX has offered to meet with Guvera next week to discuss its decision.
Guvera is currently reviewing its legal options and obligations and will be communicating to the market when it is more informed about the position and course of action the Company can take.
About Guvera
Guvera is an award-winning international music streaming and entertainment company. The company operates at the intersection of the digital music and mobile advertising industries, with a business focus on high-growth, emerging markets. Guvera’s vision is to offer a genuinely engaging advertising platform to brands that enables access to music and entertainment content for users, while ensuring that artists and rights holders are fairly rewarded for the work they produce. www.guvera.com /
www.guvera.com/brands / www.guveralimited.com
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Mumbrella nailed it with your article of three years ago which saw Guvera already unravelling then. https://mumbrella.com.au/struggling-music-service-guvera-relaunches-133832
This past couple of weeks AFR also dissected the corpse before it could be sold as filet mignon rather than offal. A lot is about to come out.
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The damage was done when Guvera were forced by ASIC to reissue the prospectus. One of the biggest revisions? The removal of the reference to Guvera having 14 million users…
Tim, I’d be asking some serious questions of the brands and the media agencies that put money into partnerships with Guvera. There’s some big advertisers listed as partners. Yet while ASIC was uncomfortable with the 14m user figure – advertisers and media agencies were not. Suggests a lot about our industry’s standards..
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How is it possible to only take 1.2 million on circa 15 million users?
Something doesn’t add up.
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@closing act – I don’t think agencies were duped given the income was just over 1m and most of the advertisers listed most likely were small trial/test investments. Agencies have known this was a dog from the day it arrived 7 years ago.
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I’m an extremely nervous investor and I fear the worst is to come, Guvera has a great product but fails to market itself properly, has stupid restrictions for users that turn people away, it markets itself as free but after two weeks the service becomes crap unless you either use 10 hours min or subscribe, that’s one issue,
There’s so many other things such as the spin and hype, stretching the truth, lavish conferences at the Versace all designed to build confidence, very very angry investor indeed
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@Richard Kratockwil I do feel sorry for the sophistacted investors and SMSFs who have been sold up the river by their accountants and financial advisers. The “business” looks like smoke and mirrors. If you can’t even make 10c a year out of a registered user, you have a huge problem…. You really have to wonder how many legitimate users the platform has now let alone ever had.
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I am absolutely astounded to read in AFR “… network of accountants that convinced thousands of self-managed super fund investors to pour their retirement savings into loss-making online music streaming business”
Small SMSF investors have no business at all investing in loss-making music streaming services. Unless the intention is to lose their money. Absolutely amazing.
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