Answers.com shareholders are furious that the public company is planning to sell to private equity for $127 million.
They say the site should sell for a valuation closer to Demand Media’s 30X multiple than the ~10X it’s getting now.
One man these shareholders particlarly loath is Answers.com CFO Bruce Smith.
Here’s Smith’s official bio:
“Prior to joining Answers Corporation in July 2005, Mr. Smith was both a sell-side analyst covering the internet industry at Merrill Lynch and Jefferies & Company, and a buy-side analyst covering the technology industry at Morgan Stanley. In these capacities, he was actively involved in the explosive growth during the early days of the Internet. Bruce was widely quoted in many news publications including the Wall Street Journal, Business Week and The New York Times. He also appeared frequently on CNBC, CNNfn and Bloomberg.”
He sounds qualified enough, but one big stake-holder we talked to called Smith a “washed-up Internet analyst” with no big ideas.
Another source said, “I discussed several paths for shareholder value to increase and was met with a repugnant Bruce Smith hanging up on me.”
Another shareholder says one reason Answers.com is selling so cheap is that “it’s done a poor job communicating its successes.” That’s a problem a company with a former sell-side analyst as its CFO should not have.
Answers.com declined to comment on this story.
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