This Day On The Street
Continue to site right-arrow
ADVERTISEMENT
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
Stocks Under $10 with 50-100% upside potential - 14 days FREE!

TheDeal: Bebo Founders Reclaim Company

NEW YORK ( TheStreet) -- The founders of social networking site Bebo.com 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 Bebo.com through vehicle MXB Holdings Inc. with a bid of just over $1 million, according to a source with knowledge of the case.

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."

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

Created in 2005, Bebo.com 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

Select the service that is right for you!

COMPARE ALL SERVICES
Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

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
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

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

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, 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
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!

Markets

DOW 17,804.80 +26.65 0.15%
S&P 500 2,070.65 +9.42 0.46%
NASDAQ 4,765.38 +16.9840 0.36%

Brokerage Partners

Rates from Bankrate.com

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs