PubSub CTO Bob Wyman was never one to pull punches. And though the blogosphere has been a store window for many companies, Wyman’s latest blog entry detailing not just that the company is days from bankruptcy, but chronicling the internal political struggles between himself and the CEO, has some wondering at what point transparency becomes the medium of aired dirty laundry.
Or is Wyman’s blogging from a sinking ship the last hope of saving a company he’s devoted a good portion of his life to, after realizing owning nearly 40 percent of it accounted for nearly nothing in the boardroom?
Excerpts from Wyman’s emotional post:
Our days are numbered. A recent attempt to execute a merger has been blocked and we’ve been blocked from raising equity financing that would allow us to continue to pay salaries and pay off our $3 million in debt. Thus, our “doors” will close soon if we can’t find someone to pull us out of the current situation. Persons with fast access to cash and a desire for some of the industry’s best technology are advised to contact us rapidly…
What has prevented us moving forward is a battle with a group of minority shareholders, some of whom claim to be lead by our ex-CEO Salim Ismail and are, in any case, primarily his “friends and family.” This group is using very unusual clauses in our Shareholder’s agreements to block mergers or financings. We’ve found it difficult to determine their motives, however, some have said that they believe that it is in their interest to drive the company into bankruptcy so that they can buy our software and start a new company
The clause that is being used to block us is a “one-man-one-vote” clause that requires that a majority of the shareholders approve any change to the shareholders’ agreement What that means is that one of our shareholders who has 75 shares has as much voting power as I do with my 540,000 shares (38.8% of the company).
What does PubSub CEO Salim Ismail have to say about it? It would appear he’s going on a pilgrimage. Dated the same as Wyman’s post, from Ismail’s blog:
Just to let everybody know, I’m going on a meditation course for several days and will be out of phone/email contact for a while. Unfortunately I will miss the first stage of the World Cup but I seriously need to decompress.
Bloggers have been sympathetic and critical of Wyman’s revelation. TechCrunch’s Michael Arrington believes Wyman was wrong to publicly take shots at Ismail, especially when looking for potential buyers.
“Regardless of who’s right, Bob was wrong today,” wrote Arrington. “A founder should never try to solve problems by publicly attacking another founder. Who’s going to step in now and fund or buy the company with all of this incredibly immature drama being thrown about?”
News of PubSub’s struggles come as a surprise to many. In January, Yahoo!’s Jeremy Zawodny predicted the death of rival blog and rss engine Feedster, which recently announced its plan to move into Asian markets. Feedster, too, had its share of internal political drama late last year, but executives at that company were extraordinarily tight-lipped about it.
But if one were in attendance at the Search Engine Strategies Conference in Chicago last year, it was rather apparent Wyman’s passion for his company as he verbally duked it out in public with former Feedster CTO and co-founder Scott Johnson (just a week before Johnson’s own dramatic episode).
As this drama plays out, it will be educational to see if public pleas for financing coupled with attacks on high-level executives can save the sinking ship that is currently PubSub, or if this was a classic PR blunder that will become a cautionary tale.
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