Fear - Reading Alpha Red

• By Tom Millitzer on October 10, 2008

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If you have not heard it looks like Alpha Red is down, possibly out for the count, but apparantly not at this hour.

What we do know:

• Washington State has filed anti-scareware suit against two businesses including Alpha Red. There are also complaints against Alpha Red's CEO James McCreary alleging violations of the Consumer Protection Act and/or Washington State's Computer Spyware Act.
• A few days ago it was announced that CWIE Holdings was purchasing Alpha Red.
• A few days later the word came out that the CWIE/Alpha Red deal was basically dead.
• Earlier this AM the Alpha Red web site was down, now it is up.

The first CWIE release was about 9 days after the legal news. That is fast and probably intended to stop an eroding client base. The deal is dead notice was four days later.

I am reading fire sale, I am smelling fear.

The question is why or how did the deal tank. I have a few guesses;  CWIE did some due-diligence, did not like something out there and pulled out. Deal points were disputed, probably price. James McCreary decided the sale was a kneejerk reaction and that he was selling way too cheap, and lastly although CWIE was purchasing assets, then decided they did not want to get close to those assets. All of these have one thing in common, money...almost all deals, especially announced deals, fall apart because of a money factor.

Fear by the way is not a bad  thing. My gut is that CWIE walked away. Probably for a good reason.

Owners of dedicated hosting firms have told me they are getting numerous calls from Alpha Red customers that are jumping ship. Some if not many Alpha Red customers are concerned about accessing or losing data (Which may or may not be actually true).

Lets admit it, for the customer this in an odd situation. The type of error that will not readily replicate itself. But lets think of the long term, something I will attack in my next blog.

More about Tom:

NCC - the Hosting Business Broker

E-Mail Tom Direct

 

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