Just two years after it went public at $10 a share, FriendFinder Networks, publisher of Penthouse, and a ton of websites including AdultFriendFinder.com filed for Chapter 11 bankruptcy yesterday.
The bankruptcy petition cites up to $1 billion in debt and less than $10 million in assets.
39 other related companies filed for bankruptcy along with FFN.
The company and its affiliates comprise a global network of more than 8,000 websites with 220 million members and 750,000 subscribers, according to court documents.
FriendFinder has only generated $300 million in revenue last year, but hasn’t turned a net profit since 2008.
The company blamed a decline in membership and increasing affiliate fees.
It also stated that some credit card companies aren’t processing payments made on the site without giving them a reason.
The company will reorganize its debts.
Shares in the company last traded under its FFN symbol on August 7th at $.43 cents a share when it was de-listed from the NASDAQ, yesterday shares of the company basically went to zero on the pink sheets (OTCMKTS:FFNT) after investors found out that the company would no longer be a public company after the bankruptcy.
Forbes in a story on the bankruptcy noted what we have been saying about the adult business for a long time, its hard to make money off of something that is available for free everywhere on the net
A couple of years ago, I saw a story on the guy who runs the free dating site, PlentyOfFish. He ran it by himself, and was pulling in checks from advertising for nearly 1 million dollars each, every month. It was a good example of how running a free business that people are interested in, can make a person a good deal of money, if run ‘leanly’, anyway.
This FriendFinder story, with a billion in debt, makes me wonder if the business was run more like Pets[dot]com. With basically the same end result.
less than $10 million in assets and $1 billion in debt. that deserves a drink