by paul
Looks like 'projected' revenues failed to keep the 'lights on' at Digital Domain Media Group, the company responsible for the splashy Tupac hologram at Coachella this summer. According to Chapter 11 bankruptcy filings surfacing last night, Digital Domain was simply 'running out of cash' despite going public roughly 10 months ago.
As of June 30th, total assets at Digital Domain were about $204 million, with liabilities topping $215 million. According to initial details, the core of Digital Domain is being fire-sold to private investment group Searchlight Capital Partners LP for $15 million, with no guarantees on what happens next. The company has indicated that day-to-day operations will not be affected, and debtors have agreed to a $20 million fund to power any restructuring. Meanwhile, massive layoffs and shelved construction plans are happening immediately.
It all seemed like a fun company until recently. Digital Domain was created by James Cameron, and generated special effects for dozens of advertisers and Hollywood films (including Cameron's own, Titanic). The picture included Academy Awards and lush government grants, though Wall Street was extremely cool to Digital Domain: shares quickly dropped below expected ranges, and plunged into the sub-$10 single digits. The Tupac splash created a temporary spike that failed to sustain, much less keep the company afloat.
This is also bad news for Elvis fans (or, good news, depending on the perspective). Shortly after the Tupac frenzy, Digital Domain sealed agreements to create an Elvis-inspired hologram, and shuttle a King-in-lights to numerous stages. That expansion now seems highly unlikely.
