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Trouble at Velo Could Mean Trouble Elsewhere...

by BozakAxel
14 replies
are you guys following the fallout of the Velo bankruptcy?!

It goes beyond just affecting Neverblue - as Velo also has multiple other business units.

hope everything works out for my friends over there...

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#neverblue #trouble #velo
  • Profile picture of the author silverace
    Neverblue's parent company, V2V Holdings LLC and its U.S. subsidiaries, today filed for voluntary protection under Chapter 11 of the U.S. Bankruptcy Code. Neverblue was not included in this filing. V2V intends to use the Chapter 11 to restructure its balance sheet and ensure the long term financial health of key businesses.

    This filing will not impact Neverblue's ability to meet client needs in any way - we intend to continue to operate business as usual without interruption. Neverblue's business is fundamentally strong and we intend to make all affiliate payments on schedule, in a timely and reliable manner. We've built out our global, performance-based online marketing strategy across several unique verticals, and now operate one of the largest international cost per action networks. Neverblue is absolutely well-positioned for future growth as one of the most highly-valued lead generation companies
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    • Profile picture of the author speedylikesKJ
      I am expecting now many networks will bring up Velo Holdings bankruptcy to recruit affiliates ... By affiliate networks we are asked to use legitimate ways to market their offers. Question is do marketing use legitimate ways to recruit affiliates ??? It is very easy for some networks to get a bunch of affiliates by playing with well reputed networks who earned popularity in affiliates by their honesty with people who drive traffic to their offers ...
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      • Profile picture of the author BozakAxel
        Originally Posted by speedylikesKJ View Post

        I am expecting now many networks will bring up Velo Holdings bankruptcy to recruit affiliates ... By affiliate networks we are asked to use legitimate ways to market their offers. Question is do marketing use legitimate ways to recruit affiliates ??? It is very easy for some networks to get a bunch of affiliates by playing with well reputed networks who earned popularity in affiliates by their honesty with people who drive traffic to their offers ...
        This has little to nothing to do with recruiting, as recruiting blindly through forum posts gets piss-poor quality applicants actually. Your comment is a bit short-sighted and jaded.

        This has to do with how it affects us as business people, and I was simply opening the door for discussion. They run my offers, I run there's and I have friends there. And I was actually touching on Velo's other business units, as I'm sure Neverblue will be fine!

        If you had actually read the articles, you'd see what I meant. For instance, how it will affect their freescore.com campaign which we were just notified is being paused at the end of today!

        "Velo blamed, in part, tighter regulatory control of one of its online marketing practices for its strained finances. The method redirects customers who have completed a purchase on its discount retail website to another website, a Velo subsidiary that sells fraud and identity theft protection services, and asks the customer to enroll.

        V2V Corp. sells these services on freescore.com, idenityhawk.com, creditfyi.com and debtplan.com for a monthly fee charged to the customer's credit card.


        In late 2010, regulations surrounding this practice changed. Under the new law, merchants are required to ask customers to re-enter their entire credit-card numbers, as opposed to only the last four digits, to sign up and authorize Velo to automatically charge the card a monthly fee.
        The change caused company-wide revenue to drop to $485 million in 2011 from $590.8 million in 2010.


        As revenue fell and debt levels remained high--it has $385 million and $205 million in first and second lien credit facilities--Visa demanded that Velo implement a new risk identification metric by May 2012. Velo projected this would cost it $13 million in earnings, but Visa threatened to stop allowing Velo to accept Visa credit cards if it didn't comply.


        Velo defaulted on both its credit facilities in December to avoid a liquidity crisis, it said, prompting Moody's Investors Services to downgrade the company's debt ratings. As a result, Chase Paymentech LLC, Velo's credit-card processor, notified Velo it would terminate their agreement on April 20."
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    • Profile picture of the author BozakAxel
      Originally Posted by silverace View Post

      Neverblue's parent company, V2V Holdings LLC and its U.S. subsidiaries, today filed for voluntary protection under Chapter 11 of the U.S. Bankruptcy Code. Neverblue was not included in this filing. V2V intends to use the Chapter 11 to restructure its balance sheet and ensure the long term financial health of key businesses.

      This filing will not impact Neverblue's ability to meet client needs in any way - we intend to continue to operate business as usual without interruption. Neverblue's business is fundamentally strong and we intend to make all affiliate payments on schedule, in a timely and reliable manner. We've built out our global, performance-based online marketing strategy across several unique verticals, and now operate one of the largest international cost per action networks. Neverblue is absolutely well-positioned for future growth as one of the most highly-valued lead generation companies
      I'm coming at this from a business perspective, as I do business with them. I hope it doesn't affect them, but feel it's a pertinent discussion. See this quote from Performance Marketing Insider:

      "Even though they are not "included" in the Bankruptcy, there are a ton of issues that will come up that will affect the future of the company. The idea that Neverblue is not going to be affected by it's parent company's issues is incorrect. They are owned by that company, and are subject as an asset of the company. Since Velo Holdings owns Vertrue, which in turn owns Neverblue, the future of the company is in the air and may be for sometime. This means that anything could happen to the company, including it being sold in order to pay the debts of the parent company. We will not know for a long time what will happen to Neverblue, but more than likely they will be sold in the future, depending on how their parent company restructures. If Velo is not able to restructure this could mean additional issues. It will be up to the courts to determine this.

      Vertrue, which bought Neverblue in 2007, for all accounts, has not had good year. They seem to be in serious financial trouble and has their credit rating changed to a "D". According to a report by Bloomberg:
      Vertrue was "at risk of breaching financial covenants early in 2012," according to the S&P report. "We believe the company may have the capacity to make the $10 million interest payment, but doing so absent a financial restructuring would likely make it difficult to operate the business given prevailing conditions."
      They also suffered a $33M judgement from the Iowa Attorney General last year.


      The last bad news is that Neverblue is being sued by Patent Troll Esssociate. This is very unfortunate because it means that Neverblue as an asset may be very hard to sell, even if they are profitable. Very few people want to buy companies that are currently engaged in major intellectual property litigation that could affect the long-term health of the company."
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  • Profile picture of the author pacelattin
    Also, note VELO is a HUGE advertiser in the industry.
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  • Profile picture of the author ericbryant
    What do you think are the potential opportunities for us marketers in all of this?
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  • Profile picture of the author BCRed
    NeverBlue just posted a job a few days ago: Intermediate QA Developer - Job - VIATeC
    Doesn't necessarily mean all is well, but at the very least shows they aren't in full fledged panic mode yet
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  • Profile picture of the author outwest
    Just because a company says,...this will not affect us....................doesnt mean its true
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    Tech article writing .Native English Speaker(with Proof)
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    • Profile picture of the author BCRed
      Originally Posted by outwest View Post

      Just because a company says,...this will not affect us....................doesnt mean its true
      You're entirely correct. But as someone who lives in the same city they are based, and knows someone who works there, it doesn't seem to be in full on panic mode... yet anyways
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      • Profile picture of the author outwest
        Originally Posted by BCRed View Post

        You're entirely correct. But as someone who lives in the same city they are based, and knows someone who works there, it doesn't seem to be in full on panic mode... yet anyways
        that may well be , but again that may also be because the employees are being kept in the dark, which would not be unusual

        behind the scenes things are done to protect the interests of the company, pure and simple

        companies who plan to close usually dont tell the employees, it becomes a security risk. Typicall what I have seen is employees are called into a meeting, boom we are done. Clean out your desk guard escorts you off the premises. Otherwise if they notify 2 weeks prior, all kinds of sabotage computer files copying etc can take place. much better to surprise everyone. Thats why I think if you say they are not in panic mode, means nothing,

        Not that I know anything about this particular company, I am just speaking of what I have observed with many similar situations
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        Tech article writing .Native English Speaker(with Proof)
        specializing in SmartPhones , Internet security, high tech gadgets, search engines, tech shows, digital cameras.
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        • Profile picture of the author pacelattin
          In retrospect this is funny. The company is being sold in bankruptcy.

          Originally Posted by outwest View Post

          that may well be , but again that may also be because the employees are being kept in the dark, which would not be unusual

          behind the scenes things are done to protect the interests of the company, pure and simple

          companies who plan to close usually dont tell the employees, it becomes a security risk. Typicall what I have seen is employees are called into a meeting, boom we are done. Clean out your desk guard escorts you off the premises. Otherwise if they notify 2 weeks prior, all kinds of sabotage computer files copying etc can take place. much better to surprise everyone. Thats why I think if you say they are not in panic mode, means nothing,

          Not that I know anything about this particular company, I am just speaking of what I have observed with many similar situations
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