Bolt settles with Authentic Brands
Authentic Brands Group’s lawsuit against one-click checkout startup Bolt has been settled two months after their ugly legal rift became public, the two companies announced Wednesday.
Why it matters: An expeditious end to the lawsuit is preferable for both sides. Dragging it out under public scrutiny could've hurt Bolt's shares, which in turn would have slashed ABG's gains from suing Bolt.
Details: ABG was given an undisclosed number of shares in Bolt, the latter revealed Wednesday. But Bolt CEO Maju Kuravilla, in a conversation with Dan Primack, suggests the figure is less than 5% of the company.
- Bolt will also continue to work with ABG brands Forever 21 and Lucky Brand, despite allegations from ABG in the lawsuit that Bolt created "significant and recurring technical problems."
Flashback: ABG sued Bolt for breach of contract this year, saying the latter had denied its right to buy about 5% of Bolt's equity for $29 million — dependent on certain performance metrics being met.
- According to the lawsuit, that stake is now worth more than $500 million based on Bolt's $11 billion valuation.
- But ABG alleged that Bolt changed the terms of those performance metrics, and also alleged that Bolt over-advertised the extent of its relationship with ABG to investors.
- Despite those allegations, ABG still sought shares in Bolt from the courts.