Vice Media, a once-promising news startup, is preparing to file for bankruptcy as it struggles to find a buyer willing to pay more than $1 billion for the company, according to two sources familiar with the matter.
The company has taken steps to file for a possible bankruptcy if it cannot secure a buyer in the next few weeks.
Fortress Investment Group, one of Vice's largest creditors, raised more than $30 million in debt financing for the company in February, giving the firm preferential treatment to be paid out first should the company sell.
If the company goes bankrupt, it is likely Fortress will take control of Vice and run an auction to sell it, according to The New York Times, which first reported the potential bankruptcy news.
Vice was co-founded by Shane Smith, Suroosh Alvi, and Gavin McInnes as a magazine in 1994. The company went on to raise more than $1 billion in financing from investors, including major TV companies such as A&E Networks, The Walt Disney Company (NYSE:DIS), and 21st Century Fox (NASDAQ:FOXA).
But Vice's growth slowed, making it hard to justify the massive valuations it received from investors over the years. At its peak in 2017, Vice's investors believed it was worth $5.7 billion. However, the company reportedly missed its $800 million revenue target that year by more than $100 million.
Just last week, Vice Media canceled its acclaimed program “Vice News Tonight” amid a sweeping restructuring.
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