Search engine startup Wink has offered to buy back stock from investors with remaining cash at a rate of fifty cents on the dollar, according to sources involved with the company.
The company has raised two rounds of financing totaling $7 million to date. Our understanding is that some of the investors have elected to sell their stock back to the company under these terms. Wink’s main investor, Greylock, reduced it’s stake in the company but remains its largest outside shareholder.
Wink’s plan will be to consolidate it’s remaining cash and focus on its people search engine, launched last fall.
We’re hearing two versions of why this is happening. The first version, coming from disgruntled shareholders, is that the company has failed to execute and it’s time to return what’s left of the capital to investors. The other story, being pushed by the company, is that they simply made a strategic decision to change the direction of the product, and offered investors a way out since it isn’t the story they originally bought into. Both are probably partially true, although it’s clear that a liquidation couldn’t be forced unless Greylock was behind it. And Greylock, even though they’ve sold some of their stock, still seems to be backing the company.
Odeo was also recently bought back from investors. In that case, the company was taken completely private and outside shareholders were reimbursed 100% of their initial investment. That looks to be a brilliant decision by founders Evan Williams and Biz Stone. While Odeo has since been put up for sale, Twitter has exploded with growth and has hyper buzz.
Will Wink also be successful? That’s for users to decide. But organizing the mess of human meta data included in the big social networks could be a smart way to go.