Nick Denton is buying up Gawker Media stock from early employees, reports The New Yorker.
He’s offering to buy at a $30 million valuation.
Yahoo trades at 3X revenues and Gawker Media is growing much faster. A 5X valuation on $15 million to $20 million revenues puts Gawker’s worth closer to $75 million to $100 million. TechCrunch, a smaller property with fewer big brand investors, just sold for somewhere around $30 million.
Why is Denton buying up stock?
The New Yorker’s John Cassidy has a theory: Denton is looking for an investor to help him expand.
That’s wrong, says Denton.
“We’ve always bought stock. We have some spare money.”
We think the main reason Gawker would buy the stock back is to keep early employees motivated and not agitating for a sale – perhaps even to fulfil some old promises.
Also, buying stock from old employees allows Gawker to pay new employees with equity and not dilute current shareholders.
NOW WATCH: Briefing videos
Business Insider Emails & Alerts
Site highlights each day to your inbox.