Digital Domain Stock Falls 75% Over 4 months

From the Palm Beach Post:

Shares of movie effects company Digital Domain Media Group have plunged 75 percent in four months, a collapse that has stripped $300 million from the struggling venture’s stock market value.

With shares plunging, Digital Domain Chief Executive John Textor told regulators Wednesday that he’s considering buying the company. In a filing with the Securities and Exchange Commission, Textor said he leads a group that is exploring a purchase of the company “in an attempt to increase shareholder value.”

Amid Amidi at Cartoon Brew writes that Digital Domain May Be On The Brink Of Disaster:

There are already many victims in this situation. I feel awful for the artists who are working on Digital Domain’s first (and potentially last) feature The Legend of Tembo, as well as for all the other Digital Domain employees. I feel bad for Florida citizens who handed $132 million of their taxpayer dollars to a reckless and clueless businessman. I feel outraged for the incoming students of Digital Domain Institute who may have to perform slave labor because Digital Domain doesn’t believe in federal labor laws.

But you know who I don’t feel sorry for? John Textor.

I couldn’t agree more. By being a public company we get a glimpse into the questionable costs led by many of the decisions companies in our industry make. For example, many argue that the solution is to move work to places like India which DD recently announced. The result?

The UK and India was enormously expensive to launch. You’ve seen in our prior disclosure, and if you’ve read it, you’ve seen it in risk factors in a very ugly way. You’ve seen it as this ongoing fixed requirement to pay $70 million to Reliance over a three-year period. Well, that was a contract that was put in place because we had a massive film that we had disclosed several quarters ago. We all know this now. The studio ended up not going forward with it, but we were still stuck with the contract.

We liked our relationship with Reliance, and we wanted to bring up that labor, because ultimately, that relationship with Reliance gives us access to incredible, affordable, and good quality labor in India. So we stomached it, and we continued making payments, not only for the real work that they were doing for us, but, by contract, for the people that they had in training, and that was showing up on our P&L as a significant amount of unutilized labor.

Soldier On.

49 Responses to Digital Domain Stock Falls 75% Over 4 months

  1. see how that run says:

    $70 million going to Reliance vs $0.1 million to a trade organization.

    As they say, the odds are stacked against YOU. 700:1

  2. WaitNsee says:

    If Textor treats DD like he treated BabyUniverse, a crash is imminent. Hope the artists and “slave labor” students are getting their resumes ready.

  3. bigCheese says:

    Something about this story strikes me as fishy.

    If John was just doing his job and the company loses $300M in value, then we could all just sit here and say “Oh John, you’re just not a very good executive.” But, now he wants to buy the company…

    Trust me, you don’t just run a good company into the ground to then buy it because you’re a decent person.
    John’s obviously got something devious up his sleeve.

    Meanwhile he’s trying to have a sizeable hand/influence in starting a trade org. I for one am totally scared of a trade org that has anything to do with this guy. Because whatever it turns out to be, will NOT be in the interests us artists in any way.

  4. Anon says:

    Read the latest article by Matt Taibi in rolling stone about Romney and Bain Capital. It will explain a lot about what’s going on here.

    • WaitNsee says:

      Wow! Just read it. Borrow money to make money and NOT grow the business or create jobs! I think your on to something.

    • jonavark says:

      hahaha! Funny stuff. Rolling Stone. A real bastion of truth there.

      • JustCurious says:

        Matt Taibi is one of the few real journalists out there. He’s been uncovering the raiding of our nation’s wealth for years now. The fact that some of our only real journalism comes out of Rolling Stone Magazine might be pathetic but it’s truth nonetheless.

      • Ymir says:

        Real journalists don’t throw cream pies at people. Taibbi is an activist in journalist clothing.

      • jonavark says:

        Nope. Rolling Stone. It’s where you go when you’re too far left to write for anyone else.

  5. KevinSea says:

    Holy fire-your-lawyers Tex, You didn’t include a “no-green-light-on-the-film, no-$70M” contingency clause? That, in my personal opinion might get you fired from an unconflicted board. Wow, just wow.

  6. Dave Rand says:

    I give him credit for being courageous enough to put his name behind often outrageous ideas. The latest news inspired me to create this satirical portrait. I have faith in the talent I’ve had the pleasure of working with at DD. I wish Textor and the company the best. Their success can only help the industry. India and China are going to happen no matter what. Hopefully markets will continue to expand along with demand. India’s middle class is bigger than all of North America combined, China shows amazing audience promise. Meanwhile we may need a Darth Textor in the mix. At least he has some balls. The studios certainly do.

    /large

  7. keep your head up says:

    CEO’s who get paid a good amount like John will drive them into the ground then off to the next one… but to want to buy the company ….. this is a well planed unfortunate set of events… John knows what he is doing… John states the company parts are worth more than they are whole.. I see everything being sold off but Tradition Studio … John has his animation studio and the money to support it.

  8. vfxlies says:

    Don’t bite on the negative one sided spinster bait. Investigate further and you will see how undervalued the stock is right now. Read the SEC filings carefully. Educate yourself and draw your own conclusions.

  9. Caleb R. Owens says:

    I’m curious what the general vibe is among artist at DD currently? Anyone care to share?

    • DDI Student says:

      As a DD Institute Student taking the Essential Skill Classes (4 course training..not the FSU program) this news does leave me with a not so fresh feeling… two semester have passed and about 30 people have taken the classes …yet no one has been hired

      • Andreas JABLONKA says:

        Out of curiosity when you signed up how much did the “get to work on real feature films” at DD play a role in your decision? Did you feel ok working for free and technically paying them to work for them?

        DD employees are very loyal, the vibe at DD Vancouver was good. Many believe in Textor as they don’t want to rock the boat or question the boss. It was sad to see how little the seemed to be bothered by the CEO missteps.

        I want DD to succeed but I don’t want Textor too. He acts like he cares and even the attemp to buy the company to increase value seems like a charitable mOve. Then you remember that he is a banker not an artist, the guy that said”dd us where it is today because if you(the employees) hard work but I don’t want to grow Vfx as a business”.

      • Ashes says:

        @Andreas, DDI Student is doing a college internship just like the 1000s do in the USA. The student isn’t paying to work. They are exercising the option of doing a profession internsip. Please look at any college course book in any school in the US and read up on it. Way to try and guilt the student about something they should not feel guilty about.

        That being sad, no one should go to a school just to do the internship. That should merely be an extra not a main motivator. Go to FSU because you like their BS, BA, or BFA program.

      • DDI Student says:

        to Andreas.. A lot of people have a misunderstanding of the DDI school.. their are two parts the essential skills and the college..i’m in the essential skills class.. 4 courses each 10 weeks…we do class work on roto, paint, greenscreen vfx film work, and matte paint…. at no time do we work on DD projects.. its all class work and getting to know NUKE, Photoshop, working with class projects that we film, and getting to know DD’s work flow and getting to know our teachers who are DD artists.. The college just started classes this last week and I would think DD would not have them interning on projects just yet.. The reason why i took the classes was to get an edge on the 1000’s of people that send them resumes … I now know DD’s workflow and how they want someone to roto or composite a shot.. I just wish jobs were open ….

      • David T. Eby says:

        It’s pretty obvious it is a total scam. You should get out of it while you still can like I did (Was accepted to the FSU Animation Program), but thanks to good ol’ boy VFX Soldier, I’m pursuing a BA in Media Production, and actually making gaining money off it due to scholarships and such.

        The actual degree means nothing to an employer, it’s the work you do on the side that counts. When I graduate, I will already have 4 years of work experience under my belt working with various production companies and doing many internships.

  10. ughhhhhhhh says:

    blah gahh arggh vomit, let it go.

  11. Ymir says:

    Textor has made some smart moves and some not so smart moves. He’s built the Florida studio in the same way that professional sports team owners get their cities to pay for new basketball arenas, baseball parks, and football stadiums. Having the sports venue in an area is an economic boom, in many areas revitalizing an otherwise impoverished part of town. People tend to stay in the area after the game patronizing local restaurants and bars. If Textor can staff up the facility in Florida, that will generate a lot of economic activity for Port St. Lucie and the area. I believe Pixar got some sort of financial incentives from Emeryville, if I’m not mistaken when they were revitalizing that area. Artists buy specialty coffee in the mornings, go out to lunch, and go out and have drinks after work. I remember when Culver City was a wasteland. Then Sony put money into the studios and the community, and now it has some night life. DD Venice has the Firehouse, ILM the Final Final, and SPI Rush Street plus any of the other places in the area. So there’s really nothing evil or greedy about using city tax dollars (if the city is willing) to lure business to the area. If the Florida facility takes off, it’s a win-win for Textor and Port St. Lucie.
    As for being not-so-smart, Textor should never have offered the IPO. Maybe AFTER they have produced 2 or 3 hit animated films . . . But right now DD is known for it’s VFX work. Service for hire. They produce no product of their own, so they have nothing to sell. The stock is based on nothing, other than work they are paid to do and have to bid to bring in. People buy stocks when the company makes a profit, and you can’t make a profit on work you have to bid for. Textor is wise to try to buy back the company. It would be better if he took it private again. With the stock listed, all their finances are open for everybody’s review. No other VFX company I know of has their finances displayed like that. That’s not to say they’re in any better financial shape, they’re just not airing their laundry for everybody to see. The fact that we lost two effects houses this past week shows that everyone is in the same financial boat as DD/Textor.
    Personally, I wish DD success. DD’s made some smart hiring moves in Florida and Vancouver for head of studio. If Textor’s wise, he’ll take a step back and let these folks do their jobs while he makes sure they have the resources to do them.

    • sloppy cheese doodles says:

      @Ymir let me take on your points one by one, because I think that you seem to be confused as to the real situation.

      >”…is an economic boom, in many areas revitalizing an otherwise impoverished part of town.”

      Thankfully, through the magic of Google Street View, we can see where the DDMG offices are located:

      http://goo.gl/maps/e1MqU

      Do you see a vibrant downtown within walking distance? Nope. A Gamestop (which I can’t really find on the map) plus a fire station don’t count as a downtown. In any case, seeing that Wyndcrest (the former name of Digital Domain Media Group aka Digital Domain Holdings) started life as a real estate investment vehicle, I wouldn’t be surprised if DD’s location was just designed to boost the value of an existing real estate investment by building an office park. Downtown Culver City and Venice/Santa Monica along Main existed before Imageworks and DD got there, respectively. Constructing a downtown from scratch in a field is a slightly more difficult proposition.

      >”Textor is wise to try to buy back the company.”

      I wouldn’t really call it ‘wise’ if it’s the only option he has at this point.

      >”With the stock listed, all their finances are open for everybody’s review.”

      The finances don’t magically become awesome if the company goes private. He’s still going to have to liquidate most of the company if he decides to take the buyback route.

      >”The fact that we lost two effects houses this past week shows that everyone is in the same financial boat as DD/Textor.”

      This is a false equivalence – Textor made a fair amount of decisions (i.e. attempting innovative uses of student labor) that I’m pretty sure Matte World and Fuel never did.

      >”DD’s made some smart hiring moves in Florida and Vancouver for head of studio.”

      You’d be a greater benefit to your friends if you called a spade a spade before they make questionable decisions. DD is probably paying above market to get these hires to work there – for some reasons failing companies always believe that they can expensively hire their way out of problems. Since you obviously work (or worked) at Imageworks you probably know about CFX and the Matrix sequels. Same thing.

      >”If Textor’s wise…”

      He’s not.

      • Ymir says:

        @Sloppy,
        I am less confused than you would probably like to believe.
        > Do you see a vibrant downtown within walking distance? Nope. The finances don’t magically become awesome if the company goes private. He’s still going to have to liquidate most of the company if he decides to take the buyback route. This is a false equivalence – Textor made a fair amount of decisions (i.e. attempting innovative uses of student labor) that I’m pretty sure Matte World and Fuel never did. DD is probably paying above market to get these hires to work there – for some reasons failing companies always believe that they can expensively hire their way out of problems. Since you obviously work (or worked) at Imageworks you probably know about CFX and the Matrix sequels. <
        Have worked there, yes, as well as a number of other places over more years than I care to admit. I don't know why Centropolis closed. I'd heard rumors Dean and Roland weren't getting along. Also heard their German backers were hurting for cash and Warners got nervous and pulled the Matrix work, thus sealing the deal.

      • Ymir says:

        Wow that didn’t come out right at all. Much reply missing.

      • Ymir says:

        @Sloppy,
        I am less confused than you would probably like to believe.

        > Do you see a vibrant downtown within walking distance? Nope.

        Shopping and dining businesses do not have to be in walking distance to benefit from a large scale employer. You see, there’s these things called cars . . . ILM in San Rafael was not in walking distance to 4th Street, yet many of those restaurants were regular haunts of ILM lunch goers. Not so much anymore as all those ILMers are either eating in house or at S.F. eateries. Fact is, businesses full of employees are better for a local economy than empty buildings. Look at Detroit. As for building a downtown, businesses go where’s there’s money waiting to be spent. It’s not that difficult of a concept. And if Florida is famous for anything, it’s development, and it looks like from the Google map that there’s plenty of room to develop there.

        > The finances don’t magically become awesome if the company goes private. He’s still going to have to liquidate most of the company if he decides to take the buyback route.

        Didn’t say it would, and didn’t mean to imply that (if that was the case). Just meant that it would get the financials out of the public attention and making Textor/DD less of a bad PR target. Its harder to get back on the bike when people’s goal is to keep pushing you over.

        > This is a false equivalence – Textor made a fair amount of decisions (i.e. attempting innovative uses of student labor) that I’m pretty sure Matte World and Fuel never did.

        Perfectly valid comparison. Times are tough for all effects houses right now. And as DDI Student has point out, there are no students in production. I don’t even know if DD has anything in house at the moment to work on.

        > DD is probably paying above market to get these hires to work there – for some reasons failing companies always believe that they can expensively hire their way out of problems.

        Evidence please, or just pure speculation? I have no idea what DD pays, artists or execs. What I do know about these guys is they’re smart. They’ve been there, done that, and got loads of crew t-shirts. Look at their IMDb pages. I wish more effects houses would put people in charge who have come up through the artists ranks. They come from real world experience and not because they got high grades in business school or come from a big foreign banking family.

        > Since you obviously work (or worked) at Imageworks you probably know about CFX and the Matrix sequels.

        Have worked there, yes, as well as a number of other places over more years than I care to admit. I don’t know why Centropolis closed. I’d heard rumors Dean and Roland weren’t getting along. Also heard their German backers were hurting for cash and Warners got nervous and pulled the Matrix work, thus sealing the deal.

      • ukVFX says:

        CFX went down because Das Werk, their German parent company, got into financial difficulty and ended up being restructured. Emmerich and Devlin had already sold their interest in CFX to Das Werk. CFX was a healthy business but WB didn’t want to take any risks with the delivery of The Matrix sequels so they pulled the work. This guaranteed CFX couldn’t be sold as a going concern – lights out, end of CFX.

      • sloppy cheese doodles says:

        @Ymir

        This is fun, let’s do this all day.

        >”…and it looks like from the Google map that there’s plenty of room to develop there.”

        My response to this is to ask a simple questions – how many of the investors that Textor needs to bail out his company (and this includes distributors/additional production funds for LoT) share his ‘vision’ of long term development in the area surrounding DDMG? You can argue that the state does, but with the high likelihood that he’s already burned through most of the money the state has provided him with so far (probably pretty high, but nowhere near the $132 million in loan guarantees stated multiple times in disclosures and the press), I don’t really think the state is going to come to his rescue on a white horse if everything goes south. It’s a difficult concept to sell people on long-term economic development when you’re a public company that’s not making quarterly targets. Going private might lessen the scrutiny, but other structural problems remain.

        >re: paying above market “Evidence please, or just pure speculation?”

        Speculation, but you’d have to believe that charity was the prime motivator in people taking VFX jobs to believe that people with mid six figure and up salaries would take a pay cut to relocate from LA to Florida.

        > “What I do know about these guys is they’re smart.”

        Oh boy, here we go.

        This is going to be a multiple part response, but let’s just say this as far as part 1 of this answer…it’s really easy to be ‘smart’ when you have money coming in. It gives you the opportunity to throw a lot of shit at the wall to see what sticks. The greatest example of this would be Imageworks before and after Zemeckis stopped using them. After Zemeckis pulled the ripcord, things got real bad real fast. But that’s neither here nor there – let’s kinda evaluate Digital Domain Media Group based on an internationally accepted scale of what is smart or not: the criteria of a rich guy who came from a reasonably well-off family but definitely is not a DuPont-scion-yacht-club-creature like Textor.

        Yes, I’m talking about Warren Buffet. By Mr. Buffet’s own admission, he looks to invest in companies that are “‘economic castles’ surrounded by ‘unbreachable moats'”. Together, let’s try to apply this criteria to the new, improved DDMG. We’re going to try to make this as simple as possible without all that “new media/new economy” jazz. I’m merely trying to demonstrate why it’s going to be difficult for Textor to find new money – hopefully some of the English-speaking MBAs at companies like Reliance will read this post before they decide to blow even more money, lol.

        Various existing business models and new ones put forward by Textor and why they fail this criteria below.

        VFX for hire – completely saturated market, DD doesn’t really have a proprietary technological edge over competitors. R&D projects have no independence from production and are dependent on specific shows for funds – this leads to a lot of potential money-making ideas languishing in half-completed source checkins.

        Feature Animation – saturated market, but let’s examine Textor’s stated plans a little closer because I don’t think he’s pivoted from them yet. Textor’s stated idea (which I believe has been stated in disclosures) was to solely focus on the G-rated market because he personally feels that ‘gee wilickers, there’s not enough family friendly content out there’. As far as I know, targeting films to this market was either based on a) a message from God or b) a partially insightful conversation over racquetball at the Del Lago Country Club and not on anything like market research or theater exit polling. If you feel that there’s tons of room in the market for animated movies for children, you might want to have a conversation with Dreamworks, Disney, Disney/Pixar, Universal/Illumination, Fox/Blue Sky, etc. His room for innovation in this area is severely limited by his competition.

        For-Profit Education – I feel like Soldier, Amid @ Cartoon Brew and others have been over this one with a fine toothed comb, but the clearest evidence is higher in this thread – namely the student who says that there are no guarantees of a job at the end of it. Where’s the incentive to go to DDI if there’s no clear career path? I don’t really want to argue the accreditation/total sham nature of for-profit education, but I think the previous comments in the thread are strong enough.

        Defense Simulation – DD offers nothing proprietary over the competition. In fact, I would argue that The Mill is probably better positioned than DD to capture this market due to their ownership by the conspiracy theorists’ favorite private equity firm, The Carlyle Group, with its strong institutional linkage with defense. If you can find an equally strong link between a defense contractor (and let’s take consultants hired off the table – because I know of two of them) and DDMG’s institutional owners, I’m all ears.

        Virtual Performer Business – broken record time, nothing proprietary here. At least 3 companies in London, 5-7 in North America, 2 in AUS/NZ and 2 or so in Japan could pull off a Benjamin Button/Tron: Legacy/Tupac-quality double. This isn’t a big secret. Not to mention that it will probably be possibly to generate a Tupac-quality double inside of a game engine (my bet is on Crytek or Epic having some kind of 4-8 GPU-tricked out machine running a Tupac-style demo onto the AV Concepts/Musion Screen that is shockingly never mentioned in any of the DDMG PR within the next two years at GDC – this is pure speculation, btw, but feel free to cap it for future reference). Plus Textor seemed to pre-announce the proven-to-be hypothetical Reagan RNC hologram in a quarterly disclosure, and part of the stock price falling off a cliff is (probably) due to the realization by investors (the 5% institutional ones included) that this business is a house of cards.

        3D Conversions – adjunct to VFX for hire, same issues

        I’m honestly sick of typing but there’s one more thing I’d like to type out, which is my personal vision of the near future of Digital Domain Media Group. I would say as far as popular depictions of dystopian scenarios, it ranks somewhere above Soylent Green but still below The Omega Man.

        I’ll try to put it into bullet points so those at home can play along.

        This weekend – (8/31 – 9/3)

        – some light resume polishing by executive team – most of the people that are still with the company now have a smidgen of hope that Textor can pull it out.
        – somewhat of a freakout at Summit/Odd Lot about whether or not they could conceivably finish Ender’s Game on time if DDMG goes under. Some poor producer basically spent the weekend intimate with a spreadsheet.

        Sometime in the next two weeks – (9/4 – 9/14)

        – DDMG de-lists from the NYSE as the stock hits $1.25. There are no penny stocks on the NYSE, so DDMG will have to de-list before then. The stock isn’t going to magically spring back to life.
        – resume polishing becomes more fevered – there’s a mad crunch of long-term staff trying to get shots for their reels
        – Some more minor executive shuffling – Textor rearranges some people because he thinks it’ll make DDMG more attractive to a buyer

        Through end of September – October – Mid November – (9/17 – 11/16)

        This is where it starts to get hazy because my crystal ball is out for repair, but I’ll make a few guesses.

        – Textor is unable to find a buyer. They’re not quite ready to declare bankruptcy yet, but they’re getting everything ready. This fact is already known by LA, Vancouver and FL-based execs.
        – In early October, large parts of the Ender’s Game shot order are moved from Vancouver to another major studio, such as ILM or SPI Vancouver. This is just so they can wrap their head around the pipeline and Summit/Odd Lot has a way out.
        – By early November, Ender’s Game is completely gone. Other shows that are being worked on in Venice (there are a few) are yanked and sent to other studios. No studio is going to risk having a release date slip due to the possible collapse of DDMG.
        – By mid November, everyone is freaking the fuck out.

        Mid November through 1Q 2013 – (11/19 – 3/1)

        – full bankruptcy – Textor is unable to find a buyer for most of the other businesses he’s acquired, largely due to the fact that no LA (or elsewhere-located company) sees a benefit to continual operation of a facility in Florida due to most of the tax incentive bridges being burned by this point. The school will graduate one class and fold.
        – All non-Tradition Studios employees will be laid-off over this period. They’ll try to keep it surgical at first but there will likely be at least show-specific mass layoffs of artists in both Vancouver and Venice.
        – Textor will continue trying to shop around the work that he’s done on Legend of Tembo until his money really runs out – however it will probably be all gone by 1Q 2013.
        – The state incentives given in Florida will be subjected to a fair amount of local press that’s similar to the collapse of 38 Studios in Rhode Island – might even interest the LA Times (due to VFX industry issues here) or NY Times (due to traditionally close money links between NY and South Florida). Depends on how lurid the real details are.

        In short, Ymir, I’ll take my well-founded and well-reasoned pessimism over your Polyanna-esque perspective on DDMG because your homies work there any day. I would say that if you had reservations about Textor’s ability to run the company, you should have done your diligence as a friend and told your buddies to stay away. Just saying.

        Everyone is fucked – the wheels are in motion and there is no stopping the shit train from slamming into a brick wall at high speed.

      • Ymir says:

        Well, you sure seem to know a lot about what’s going on inside DDMG. Either you work there, or recently worked there. But the main revelation of your response is that you confuse well reasoned pessimism with condescending prick.

      • sloppy cheese doodles says:

        @Ymir

        You’re the dude that started the ad hominem train; I just blew the whistle

      • sloppy cheese doodles says:

        @Ymir

        Where you and I differ is that you feel that what DDMG employees need right now is vapid, uniformed boosterism. Since you really haven’t addressed the substance of my points, I think you might want to take your rah-rah shit to somewhere that cares, like Seeking Alpha.

        Which won’t actually work in the long term because the stock is probably going to de-list next week.

        In any case, I’m done for now – the only thing left is to cap this thread to see if even a little bit of what I’ve said comes true.

      • Ymir says:

        Nope, you were pretty much in C.P. mode from the first line of your first reply. You come across like you have an axe to grind with DD and/or Textor. You also come across like you don’t like reading anything that gives the company hope of staying afloat. Personally, I don’t have any skin in DD’s situation other than I know people working in Fla., CA, and BC and would hate to see them, or any employee for that matter, thrown out on the streets. There’s enough unemployment out there already.
        You brought up a lot of good information, expressed in a very condescending way, which in my case falls on unsympathetic ears and makes me wonder what personal benefit you see in our industry losing another major player?

      • sloppy cheese doodles says:

        @Ymir

        I just can’t resist – you’re so much fun.

        I could give slightly less than a fuck if Stan and Jim get hurt fee-fees from reading anonymous blog comments. They’re both big boys, capable of fully utilizing the Google. I’m sure they are both fully aware of both the long term and short term issues with DDMG and its operations. Not to mention the fecal hurricane that seems to surround John Textor from business venture to business venture.

        To insinuate that they’re somewhat well-meaning naïfs just caught up in a bad situation is possibly the most disingenuous thing you’ve said throughout this exchange.

      • sloppy cheese doodles says:

        >”…makes me wonder what personal benefit you see in our industry losing another major player?”

        Congratulations, Encyclopedia Brown, you’ve found me out. I guess everyone at a troubled VFX company should just mail DVD’s containing all assets and data files to the following address:

        35 McCaul Street, Suite 100
        Toronto, ON M5T 1V7

        Don’t worry, I’ll take real good care of them.

      • Ymir says:

        So much for the ‘Canadians are nice’ image.
        Go Mr. X! You represent!

  12. […] VFX Soldier – Digital Domain Stock Falls 75% Over 4 Months […]

  13. Scott Ross says:

    gosh…. so much to say… so little time to do so. I hope something works out…. for the employees of DD.

  14. DDI Student says:

    Everyone knows DD is in Port St Lucie and West Palm but some might not know what DD promised the State and Cities

    Deal from Port St Lucie
    “Digital Domain and Port St. Lucie agreed in November 2009 to a $51.8 million deal helped with state contributions. The money will go in part to building a 150,000-square-foot facility. The company must create up to 500 jobs at an average salary of $64,233 by 2014”

    Deal from West Palm Beach
    “The city signed a deal to bring the digital animation college to Okeechobee and Dixie nearly six months ago, providing the company with free land worth $15 million and $25 million in loans and grants, with promises of a college that will bring an industry and jobs to the city.”

    With the West Palm deal they have to have x amount of students by the end of 2013… I want to say 300 but not sure.. just remember reading it somewhere..

    • Scott Ross says:

      A business, at it core… is a simple concept. Revenue must include a profit margin. If a company is privately owned with no “investors” expecting a return on investment, such a company, a “Mom and Pop” as they are known can continue with little to no profit for many years.

      However, if investors invest in a company, said investors expect a return on their investment… or in other words, a profit that will be distributed to its investors. When a company goes public, those investors are much less tolerant than private investors and they will demand that the company either return dividends or show growth in share price.

      DDMG, a public company, is quickly running out of cash. The public investor is quickly losing faith that this ship can weather the storm. The company has very little options left for raising any more cash. Their recent cash raises have been very expensive. Some might say that the well has run dry. Without cash, a company will quickly die.

      DDMG has seen its stock plummet 75%. It has hardly any cash. It shows huge losses.

      Business 101…. class is adjourned.

  15. Caleb Owens says:

    The quote of the year!

    “Everyone is fucked – the wheels are in motion and there is no stopping the shit train from slamming into a brick wall at high speed.”

    I commented just days earlier on the gullibility of Florida tax payers, I’m shocked this news came so soon. Ok, not really shocked. So, what will artist do about the future of their profession when DD finally sinks like the Titanic? My guess, very little unfortunately. I hope I’m wrong.

    The indifference in our community is deafening.

    • Andreas Jablonka says:

      I agree the hard to believe how little DD’s own employees care. I was in the Q&A with textor when he explained his path and i could not believe how little they asked and how little they understood.

      I think as artists we want to beieve it will all work out. it always has right? pull 100 hour weeks for 2 months and the movie comes right? right but the money spend is a loss and only so many loses till a companys goes bankrupt. DD has been bought, sold, revamped and reinvested more than any other VFX house out there. If cafefx, fuelfx, asylum, the orphanage, matteworld had as much “draw” as DD they would have survived longer. is thats a good thing or not is a different questions but I dont want to see DD die. I just want to see it get managed well and thrive rather then feel like a fake money laundry scheme by textor and his board.

      • sloppy cheese doodles says:

        bad news, @Andreas, but I think we’re way past ‘fake money laundry scheme’ at this point. This is all dependent on what manages to leak out before Textor is able to take the company private again (and trust me, there’s pretty much no incentive to keep things secret if you’re 80-90% certain you’re going to lose your job in any case), but I think we’re probably heading more towards multitextured synethesiac levels of fraud involving tons of individuals in South Florida and beyond.

        However, we won’t find out about any of it unless there’s enough media interest to keep it going through a few news cycles. Talking about it will hopefully keep it fresh enough that at least people will be watching.

    • sloppy cheese doodles says:

      @Caleb

      I will take a brief respite from setting traps for Ymir to walk into in the other thread to respond.

      I think it’s difficult to say what artists will do – the definition of VFX artist (at least post-1990) has been fairly fluid. Are a TD and a Lighter the same thing? Different positions have different meanings at different companies. I would say that part of the reason why VFX workers haven’t unionized is because the average VFX artist doesn’t see himself or herself as part of a monolithic group with common interests.

      I’m not even sure that a trade organization would serve as a corrective to these trends. One of the big problems (in my opinion) is that there are too many VFX companies to support the actual amount of VFX work out there. I would say that growth of the VFX industry (and industry stability in the long term) was probably undone by the fact that no credible challenger to ILM emerged out of LA. SPI, old DD, R&H, Boss, etc. basically fought amongst themselves for the parts of the pie that ILM didn’t get. This might have been the American Way (free enterprise, everyone a job creator) but what it basically meant is that these companies were effectively cannibalizing each other for work and talent for years.

      It probably would have made more sense if R&H and DD (being the most independent of the larger places) merged sometime post-Titanic – this is just based on my impressions of the market at the time. I have no idea if discussions to this end ever took place.

      If the combined company (let’s call it DD because R&H probably would have had to pry the branding from Scott’s cold, dead hands) was created, I think you probably would have seen Sony corporate throw up their hands and realize that they couldn’t defeat DD on price with non-Columbia clients. Not to mention that there are a whole bunch of weird wild cards that were pushing tech forward at this point in time (would Square have decided to open up their own facility if uber-DD was seen as a place that could do photoreal humans/high detail animated characters, would Disney have just gone to uber-DD for the Gemini Man tests as opposed to trying to do stuff in-house at TSL).

      In the end, it’s all masturbation but I feel that VFX as an industry would be better off if there was a bit a merger mania and there was only one major company in LA circa 2012. There would still be plenty of boutiques, but it just feels like a lot of mistakes were constantly being made at the macro scale to me. And strong macro would have probably ensured more unity at the artist level, paradoxically. One company is easier to unionize than 3 companies.🙂

  16. jonavark says:

    ” that relationship with Reliance gives us access to incredible, affordable, and good quality labor in India.”

    bottom line.

  17. FormerDDguy says:

    This morning the stock is down another 42%, off 86% from its high a few months ago. Last Friday the company missed a big payment due to the primary finance company that got the IPO going, and today DDMG released a 8K (excerpted below) showing that many of the investors are indicating that DDMG is in default on its notes.
    Later in the 8K it is indicated that the investors are holding off on the pillaging, trying to work something out.

    On August 21, 2012, each of the holders of the Senior Notes severally notified the Company in writing that the Senior Notes were in default, asserting, inter alia, that the Company had failed to satisfy the terms of the Available Cash Covenant applicable as of August 20, 2012, resulting in an immediate acceleration of all amounts owing under the Senior Notes, consisting of (i) aggregate outstanding principal of $35 million, and (ii) accrued interest, make-whole amounts (representing the amount of future interest payments foregone as the result of such acceleration), and other amounts owing thereunder aggregating an additional minimum amount of approximately $16 million, for a total minimum amount due thereunder of approximately $51 million.

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