DailyCandy deal sweet for Pittman, bitter for employees
Selling DailyCandy to Comcast for $125 million, Bob Pittman earned a 36x return on his 2003 $3.5 million acquisition of the company. Pretty sweet. But investors who bought into the company during its last funding round in 2006, and any employees who joined the the email newsletter for women since then, didn't do nearly so well. As VentureBeat reminds us, that round set DailyCandy's value as high as $140 million. Any shareholders who bought in then are going to lose money on the deal, unless they had a liquidation preference which allowed them to get their money back. That money, in turn, would have come out of the hide of employees, whose common shares would be diluted by shares issued to make the investors whole. So while DailyCandy's sale will renew respect for the one-time, one-eyed AOL boss Bob Pittman's dealmaking abilities — we heard Comcast wanted to pay just $75 million — working for him seems to be a suckers' bet.