The party has ended badly for Robert F. Sillerman, the one-time EDM power-player whose latest venture Function(x) Inc was delisted from the NASDAQ stock exchange last week for reportedly failing to file an up-to-date quarterly financial report.
Function(x), which specialises in “viral” online content, announced it would begin trading over-the-counter when it was delisted and trading in its stock suspended for tardiness in filing the requisite form 10-Q.
The company was also struggling with a bid price deficiency on the exchange, notes Hypebot, while IQ now reports the accountancy firm BDO USA, former auditor for Function(x), has resigned amid allegations of “insufficiently authorised cash disbursements” to the exec from company bank accounts.
It’s another messy situation for Sillerman who presided over the most spectacular implosion in electronic dance music. The serial entrepreneur and music mogul built the SFX Entertainment empire into a conglomerate the likes of which had never been seen in what was, until recently, an underground, niche genre.
The American businessman, who once appeared on the 2005 Forbes 400 list with a net worth of nearly US$1 billion, established a live entertainment colossus which went public in October 2013 with a market value of more than $1 billion.
SFX operated a global portfolio of festivals, from Tomorrowland to Rock in Rio, Electric Zoo and Australia’s touring beast, Stereosonic. It was one heck of a build-up, and the drop was wicked.
The then 64-year-old Sillerman sent shockwaves across his army of shareholders when he was photographed giving the finger and grabbing his crotch at he stepped off a plane in Miami for the Ultra music festival. Just days later, stock in the company tanked when Sillerman spewed profanities in a bizarre conference call with analysts.
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In the 30 months since its appearance on the stock exchange, SFX endured multiple management changes, suffered from liquidity problems, delivered late royalty payments to labels and had been targeted by a lawsuit against Sillerman.
Its sharprice fell from $13 to just over 1 cent a share just two-and-a-half years after its stock market launch, or a market capitalization of just $1.24 million. Soon after, the company filed for Chapter 11 bankruptcy and Sillerman stepped down as CEO.
The fallout reached Australia where Stereosonic, for a time one of the biggest touring fests on the calendar, announced in 2016 it would go on “hiatus” that year, and that a “bigger and better” show would return in 2017. New dates haven’t materialised.
SFX announced bought Totem OneLove Group Pty Ltd in October for a reported $75 million, raised from its flotation.