Submitted via IRC for SoyCow1984
Smart lock company Otto is suspending operations after a failed acquisition agreement. In a blog post late last year, CEO and founder Sam Jadallah says the company made an acquisition deal that limited its ability to fundraise, but the buyer pulled out at the last minute, leaving Otto with no remaining cash. The first locks were supposed to ship within the next few weeks, but "Otto will not ship next month and it may never ship," says Jadallah. The company will "evaluate [its] options" for moving forward in the coming weeks.
The Otto Lock was pitched as a tiny and stylish, but very expensive, smart lock. It sold for $699, and was intended for wealthy homeowners.
Source: https://www.theverge.com/2018/1/1/16838016/otto-smart-lock-startup-suspends-operations
(Score: 0) by Anonymous Coward on Friday January 05 2018, @10:27PM
Because the owners of the little company either figured it was better to get bought out, or that it would take years more to actually collect on the judgment. In either case, the asset value of the judgment was discounted, so the stockholder equity was lower, so the market cap was lower.
Was this a privately owned company? It's often a no-brainer for a small group of owners to take a cash payout of x times their original investment. Companies with more, or institutional investors *may* be willing to see the judgment through to the end, based on their personal risk tolerance and second-guessing of company's management's opinion.