Linden Lab Investor Sells-Out

Paid Content reports today that Stratim Capital has "bought almost the entire position of an existing shareholder" of Linden Lab, maker of Second Life (tm).  Further they advise that it is not a VC, but an individual investor. So what is interesting here would be the value of the sale and the rationale for the valuation. Of course none of the private parties want to share that information. And Linden hardly ever shares anything, so no expectation that they will divulge this.

But, in general, now would not be an ideal time to sell shares in anything unless 1) you had to for personal financial kinda reasons or 2) believe that even a depressed value is better than what might get worse. Certainly you wouldn't sell if you believed that Linden Lab would go public soon for a massive valuation.

So aside from valuation it is very interesting to know who should this presumable significant stake. Their take on the future of LInden Lab would be very interesting indeed.  Maybe the fears of OpenSim or other competitors like Microsoft, that device-less thing is cool enuff,  are getting more serious than LL would like anyone to believe?

Stratim explains their stragey as: "Stratim Capital seeks investments in late stage companies with profitable operations and strong business prospects. The firm's founders have led spin-outs of entire portfolios and purchased individual positions. We target individual investments of $3-5 million and portfolios of $5 million to over $50 million." So if Linden Lab is really still "comfortably profitable" then this seems to fit and also probably they think they got a great deal on the share price.  It would seem that this is not a funding activity, so Linden Lab would not benefit from this transaction, only the investor that sold out.

No news on the LInden Lab site about this deal, so probably it wasn't a board member or insider. Or is it Mitch Kapor? That is speculation, but it would be significant if he cleared his postion. Maybe an ex-insider? Typically ex-insiders though would need to have vested their options or have been equity investors from the start also. There are a few ex-insiders who had been around from the start, so maybe one of them is unloading their shares now for one of the reasons above. But hard to believe that one of them would have $3-5 million worth of Linden Lab paper...

Maybe look for a Board change announcement soon...