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.
POLITICAL PRISONERS VS DEPORTEES: Venezuela’s prosecutor’s office slammed the call by El Salvador’s leader, accusing him of crimes against humanity Salvadoran President Nayib Bukele on Sunday proposed carrying out a prisoner swap with Venezuela, suggesting he would exchange Venezuelan deportees from the US his government has kept imprisoned for what he called “political prisoners” in Venezuela. In a post on X, directed at Venezuelan President Nicolas Maduro, Bukele listed off a number of family members of high-level opposition figures in Venezuela, journalists and activists detained during the South American government’s electoral crackdown last year. “The only reason they are imprisoned is for having opposed you and your electoral fraud,” he wrote to Maduro. “However, I want to propose a humanitarian agreement that
ECONOMIC WORRIES: The ruling PAP faces voters amid concerns that the city-state faces the possibility of a recession and job losses amid Washington’s tariffs Singapore yesterday finalized contestants for its general election on Saturday next week, with the ruling People’s Action Party (PAP) fielding 32 new candidates in the biggest refresh of the party that has ruled the city-state since independence in 1965. The move follows a pledge by Singaporean Prime Minister Lawrence Wong (黃循財), who took office last year and assumed the PAP leadership, to “bring in new blood, new ideas and new energy” to steer the country of 6 million people. His latest shake-up beats that of predecessors Lee Hsien Loong (李顯龍) and Goh Chok Tong (吳作棟), who replaced 24 and 11 politicians respectively
Young women standing idly around a park in Tokyo’s west suggest that a giant statue of Godzilla is not the only attraction for a record number of foreign tourists. Their faces lit by the cold glow of their phones, the women lining Okubo Park are evidence that sex tourism has developed as a dark flipside to the bustling Kabukicho nightlife district. Increasing numbers of foreign men are flocking to the area after seeing videos on social media. One of the women said that the area near Kabukicho, where Godzilla rumbles and belches smoke atop a cinema, has become a “real
‘WATER WARFARE’: A Pakistani official called India’s suspension of a 65-year-old treaty on the sharing of waters from the Indus River ‘a cowardly, illegal move’ Pakistan yesterday canceled visas for Indian nationals, closed its airspace for all Indian-owned or operated airlines, and suspended all trade with India, including to and from any third country. The retaliatory measures follow India’s decision to suspend visas for Pakistani nationals in the aftermath of a deadly attack by shooters in Kashmir that killed 26 people, mostly tourists. The rare attack on civilians shocked and outraged India and prompted calls for action against their country’s archenemy, Pakistan. New Delhi did not publicly produce evidence connecting the attack to its neighbor, but said it had “cross-border” links to Pakistan. Pakistan denied any connection to