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.