Bolt Offers Buyback to Investors and Employees, Tribe Capital Sells Shares
In an effort to salvage struggling investments, e-commerce startup Bolt is offering a buyback program for investors and employees. The move comes as some investors plan to sell their shares back to the company at a significant loss, highlighting the lengths venture capitalists are willing to go for much-needed liquidity.
Venture capital firm Tribe Capital has informed its limited partners that it intends to sell shares back to Bolt at a discounted price, signaling a valuation of approximately $300 million. This transaction represents a significant drop compared to the per-share price Tribe paid five years ago.
As part of the broader share buyback managed by Bolt, investors holding preferred shares are being offered a tender offer price that is roughly 97% lower than the price at which Bolt raised funds in late 2021. This stark difference further showcases the financial challenges faced by Bolt and the urgent need for a solution.
Bolt is also offering a lower price to common stockholders, including current and former employees. Sources familiar with the matter have revealed that these individuals have received communications outlining the discounted rate for their shares.
The buyback program initiated by Bolt demonstrates the company’s determination to address its financial struggles head-on. By offering investors and employees an opportunity to sell their shares, Bolt aims to alleviate the pressure and potentially recapitalize the business.
The buyback program and the subsequent sale of shares by Tribe Capital underscore the challenging reality faced by venture capitalists when investments fail to meet expectations. It highlights the delicate balance between risk and reward that defines the venture capital industry.
As Bolt presses forward with its efforts to navigate these financial obstacles, all eyes will be on whether this buyback program can revive the fortunes of the e-commerce startup.
Analyst comment
Negative news. Bolt’s offer of a buyback program for investors and employees highlights the struggling financial situation of the e-commerce startup, with investors planning to sell at a significant loss. The buyback program by Bolt and the sale of shares by Tribe Capital emphasize the challenges faced by venture capitalists when investments fail. The market is uncertain and will depend on the success of the buyback program in reviving Bolt’s fortunes.
