Case Name :      Avid Life (B)

Authors :           Gerard Seijts, Thomas Watson

Source :             Ivey Publishing

Case ID :            W12637

Discipline :        Organizational Behavior

Case Length :    04 pages

Solution Sample availability : YES

Plagiarism : NO (100% Original work)

In 2010, GMP Capital (GMP) found itself the only investment bank willing to raise capital for Avid Life Media, the parent company of the controversial Ashley Madison online community for married people seeking to commit adultery. Since its inception in 1995, GMP had made a name for itself as a bold deal maker and not afraid to complete “bet-the-firm” transactions. With large profit potential, morality wasn’t always an issue when sex-based business plans were being promoted. Yet after facing negative publicity, GMP subsequently withdrew from the deal. How did GMP end up on the wrong side of a line other firms refused to cross?

Case Name :      Avid Life (A)

Authors :           Gerard Seijts, Thomas Watson

Source :             Ivey Publishing

Case ID :            W12636

Discipline :        Organizational Behavior

Case Length :    04 pages

Solution Sample availability : YES

Plagiarism : NO (100% Original work)

Noel Biderman was the president of Avid Life Media, a profitable Canadian growth company whose main business was various online social networks for targeted groups seeking sexual partners and romance. Biderman was seeking to raise $60 million via a private placement offering to acquire a privately held online advertising sales company, merge the companies and take the new and improved growth story public on the TSX Venture Exchange or the Toronto Stock Exchange. The Avid Life offering represented a legal and potentially lucrative investment. Nevertheless, only one investment bank (GMP Capital) was willing to help Biderman raise capital – because among the various social networks Avid Life owns is the notorious Ashley Madison online community for married people seeking to commit adultery. GMP’s relationship was short-lived; after media coverage of the Avid Life offering started to focus on the bank’s willingness to service Biderman’s company, GMP withdrew their support from Biderman. Perhaps attributable to the bank’s desire to avoid being seen in public with someone known, rightly or wrongly, as the king of infidelity, GMP’s withdrawn support left Biderman unable to take a potentially lucrative investment opportunity to market.