We can’t say that mUmBRELLA pops up on our RSS feed too often but it has a very intriguing story about Australian music service Guvera. It reports that a major (but anonymous) shareholder in the service has taken out an ad in the Australia Financial Review (in the print edition – “old-skool”) to offload batches of 5m shares. It is suggested that this shareholder has a 10% stake in the company. This has sparked the inevitable rumours that the service is in trouble and the unnamed investor is getting out while the getting is still good.
“Guvera is a successful music streaming business with more than 10m million customers worldwide,” claimed Chris McArdle, the lawyer handling the sale. “The facts speak for themselves. It has a viable, intelligent business model and is profitable.” More intriguingly he let slip that the service is close to securing a “large cash injection” which makes the timing of the sale of these shares all the more intriguing. If the seller knows this investment round is coming, why bail out now as surely the valuation of the company will increase in line with the investment? The company has been operational since 2010 but began this year with a number of bullish announcements and pronouncements – notably that it will be live in 100 markets by the end of this year and that is has 10m registered users.