Infidelity Web site AshleyMadison.com, which has been struggling to launch a London initial public offering (IPO), can kiss goodbye to plans for a listing this year, banking sources said on Tuesday, as hackers threatened to publish names and salacious details about its clients unless the Web site shuts itself down.
The Web site’s Canadian parent hoped to raise up to US$200 million by listing its shares in London this year, five years after a lack of investor appetite caused it to cancel an attempt to list at home.
Hackers threatened to leak nude photos, sexual fantasies, real names and credit card information for as many as 37 million customers worldwide of Ashley Madison.
The data breach, bad for any company that has a repository of confidential customer data, could be disastrous for one whose business model is based on confidentially.
“The doomsday scenario for Ashley Madison is if the hackers take all the names and addresses, correlates them to real people and prints addresses and phone numbers. That will kill it,” said a Canadian investment banker, who asked not to be named.
With more than 37 million members worldwide, Ashley Madison claims to be the world’s second-largest dating Web site.
Only Match.com, owned by media mogul Barry Diller’s IAC/InterActive Corp, is bigger.
Avid Life Media, the parent company of Ashley Madison, and Web sites such as Cougarlife.com and EstablishedMen.com, values itself at US$1 billion. It reported revenue of US$115 million last year, up 45 percent from the preceding year.
“Of course they’re going to have to put any IPO plans on ice. It will be at least a few months before any banks would consider touching it,” a second Canadian investment banker said. “I don’t think this kills the company, unless all the data eventually gets leaked.”
Long before it explored a listing in Europe, Avid Life had reached out to Toronto’s GMP Securities about a listing in Canada, but the idea failed to gain traction, two banking sources said.
“The thought was that there was reputational risk, so the IPO never happened,” said one of the bankers, who declined to be identified because he was not authorized to speak to reporters.
The banker said that because of those concerns, the valuation was less than other businesses on the Internet and in the tech industry.
“Over the years, they tried to do a lot of things to try to monetize the asset,” the banker said. “Ultimately, they decided to just hang on to it, as opposed to try to sell it. Investment bankers wrestled with it because it’s a very, very profitable business.”
Avid Life spokesman Paul Keable said it was too early to estimate the damage to the company’s business model or IPO plans from the breach. The company has not commented on whether it would shut down in the face of the hackers’ threat.
The Web site allows members to access some basic features for free, but charges to send or receive messages, photographs and gifts. Female members are allowed to send “collect messages” that male members must pay to read.
It also offers a US$19 full delete option for people to remove their profiles. That claim appeared to have incensed the hackers, who insisted that clients cannot fully delete personal data.
The site allows members to sign up without disclosing personal information such as their name, telephone number or home address. However, the hackers allege that information is available from credit card payments.
Avid Life said it had since secured the site and was working with law enforcement agencies to trace those behind the attack. It also said it is convinced the hackers were formerly connected to the company.
Crisis communications experts said Avid Life had made a smart move in quickly saying it might know who is behind the hack, removing some uncertainty from the situation for its clients.
Still, Wells Fargo analyst Gray Powell said in a note on Tuesday that the hack will create remediation costs and might expose Avid Life to potential legal issues.
“While this is clearly a unique case, the Ashley Madison breach demonstrates that security is about more than just budget dollars and that lost customer data can dramatically impact business plans, brand perception and even company valuations,” he said.
Chinese President Xi Jinping (習近平) is to visit Russia next month for a summit of the BRICS bloc of developing economies, Chinese Minister of Foreign Affairs Wang Yi (王毅) said on Thursday, a move that comes as Moscow and Beijing seek to counter the West’s global influence. Xi’s visit to Russia would be his second since the Kremlin sent troops into Ukraine in February 2022. China claims to take a neutral position in the conflict, but it has backed the Kremlin’s contentions that Russia’s action was provoked by the West, and it continues to supply key components needed by Moscow for
Japan scrambled fighter jets after Russian aircraft flew around the archipelago for the first time in five years, Tokyo said yesterday. From Thursday morning to afternoon, the Russian Tu-142 aircraft flew from the sea between Japan and South Korea toward the southern Okinawa region, the Japanese Ministry of Defense said in a statement. They then traveled north over the Pacific Ocean and finished their journey off the northern island of Hokkaido, it added. The planes did not enter Japanese airspace, but flew over an area subject to a territorial dispute between Japan and Russia, a ministry official said. “In response, we mobilized Air Self-Defense
CRITICISM: ‘One has to choose the lesser of two evils,’ Pope Francis said, as he criticized Trump’s anti-immigrant policies and Harris’ pro-choice position Pope Francis on Friday accused both former US president Donald Trump and US Vice President Kamala Harris of being “against life” as he returned to Rome from a 12-day tour of the Asia-Pacific region. The 87-year-old pontiff’s comments on the US presidential hopefuls came as he defied health concerns to connect with believers from the jungle of Papua New Guinea to the skyscrapers of Singapore. It was Francis’ longest trip in duration and distance since becoming head of the world’s nearly 1.4 billion Roman Catholics more than 11 years ago. Despite the marathon visit, he held a long and spirited
The pitch is a classic: A young celebrity with no climbing experience spends a year in hard training and scales Mount Everest, succeeding against some — if not all — odds. French YouTuber Ines Benazzouz, known as Inoxtag, brought the story to life with a two-hour-plus documentary about his year preparing for the ultimate challenge. The film, titled Kaizen, proved a smash hit on its release last weekend. Young fans queued around the block to get into a preview screening in Paris, with Inoxtag’s management on Monday saying the film had smashed the box office record for a special cinema
RSS