Quibi just folded, taking two billion dollars of the world's dumbest people's money with them

NETFLIX rival Quibi has shut down after just six months – after failing to woo watchers.

The $1. 8b (£1.5b) company, founded in 2009, was one of a number of online video startups pitching investors on the vision of "redefining entertainment".

They teamed up to create movies and short-form video – an increasingly profitable art-form for entertainment companies.

But it quickly became clear that the companies were going in different directions and were not able to mutualise, form a sustainable business and make progress.

In 2012 Quibi put "all its assets" in public "6 year for hope and excitement" offering 25 percent of its share capital of $140m and large cash rewards if it met "significant milestones during that period".

But since then it has not paid a penny to shareholders, according to SEC filings.

In its 2014 IPO filing Quibi said it would spend $75m this year on "operational expenses and other operating expenses".

It was trying to raise cash by selling at 40 times its ''earnings'' (earnings before interest, taxes, depreciation and amortisation); laying off its own employees, cutting its paid staff, and selling off intellectual property to priority investors.

The document said that itself and a "small group of advisors" thought that "the time was right to accelerate the sales of the minority equity stake".

It said that those investment firms only had modest equity stakes ($5 million each) in Quibi, with "a significant amount" in cash.

Quibi did not respond to requests for comment.

(Last Updated )

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