This Day On The Street
Continue to site
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

TheDeal: Bebo Founders Reclaim Company

NEW YORK ( TheStreet) -- The founders of social networking site Inc. have won an auction of the company with a bid of more than 10 times what they offered to be the stalking horse. Still, the winning offer represents roughly one-tenth the price at which the debtor last changed hands in 2010.

Michael and Xochi Birch, the husband and wife founders and minority shareholders of Bebo, won a Monday auction of through vehicle MXB Holdings Inc. with a bid of just over $1 million, according to a source with knowledge of the case.
[Read: <a target="blank" data-add-tracking="true" href=""><em> Make Money With Your Favorite Fourth of July Beverage</em></a>]

Judge Ernest M. Robles of the U.S. Bankruptcy Court for the Central District of California in Los Angeles approved the sale just after the auction, the source said. No order had been signed as of midday Tuesday.

The sale is expected to close next week, the source said.

MXB was the stalking-horse bidder for the auction, which had two separate lots: business assets and legal claims. MXB's lead bid included $50,000 for each lot, for a total bid of $100,000.

Bebo's business assets include all property, accounts, patents, trademarks, copyrights and other assets, while legal claims include Bebo's rights in any claims against any of the defendants in a shareholder lawsuit.

The source said no rival bids were received for the legal claims, but two other entities bid on the business assets, leading MXB to increase its bid to slightly more than $1 million.

Under the bidding procedures, approved June 6, rival bids of at least $50,000 per lot were due June 27. During the auction, bids had to increase in increments of at least $10,000.

MXB would not have received a breakup fee or expense reimbursement if it had lost at auction.

Just after the auction, Michael Birch tweeted: "We just bought Bebo back for $1m. Can we actually re-invent it? Who knows, but it will be fun trying."
[Read: <a target="blank" data-add-tracking="true" href=""><em> 10 Most American-Made Cars of 2013</em></a>]

Birch's other enterprises include Internet project incubator Monkey Inferno Inc. and The Battery, a private club in San Francisco.

Created in 2005, was purchased by AOL Inc. for $850 million in 2008, when it was the third-largest social networking site in the U.S., according to a May 14 declaration by receiver Michael Ong of Burke Capital Corp. AOL sold the company to private equity firm Criterion Capital Partners LLC for about $10 million in June 2010. Court papers said the company's value dropped, in part, because AOL did not continue to invest in it so that it would remain competitive with Facebook Inc.
1 of 2

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Real Money

More than 30 investing pros with skin in the game give you actionable insight and investment ideas.

Product Features:
  • Access to Jim Cramer's daily blog
  • Intraday commentary and news
  • Real-time trading forums
Only $49.95
14-Days Free
14-Days Free
AAPL $93.90 -0.13%
FB $98.72 -5.10%
GOOG $671.88 -1.70%
TSLA $147.63 -9.20%
YHOO $26.92 -3.80%


Chart of I:DJI
DOW 15,832.24 -372.73 -2.30%
S&P 500 1,833.40 -46.65 -2.48%
NASDAQ 4,229.4770 -133.6670 -3.06%

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs