About one week back, Digital Music News was first to report on Quintessential Capital Management’s damning analysis of music-streaming service Akazoo, which claimed, among other things, that the company “looks like an accounting scheme.” Now, Akazoo has fired its CEO, and NASDAQ has suspended the company’s stock trades.
According to Bloomberg, Akazoo’s founder and (former) CEO, Apostolos N. Zervos, graduated from Yale University (Akazoo.com stated that he was part of the 2002 class; his name was removed from the website’s “executive management team” section midway through this writing) and had worked for Modern Media Acquisition Corp., which merged with Akazoo last year, between 2010 and 2019.
Zervos’s dismissal was confirmed by Akazoo’s Board of Directors via a blanket statement, following the recommendation of independent investigators; Michael Knott has been named interim CEO.
At the time of this writing, neither Zervos nor the remaining Akazoo directors themselves, including Maja Lapcevic and Athan Stephanopoulos, had taken to Twitter to comment on the investigation or the allegations of misconduct and misrepresentation that their company is facing.
However, it’s unclear if Lapcevic and Stephanopoulos are presently part of Akazoo’s Board of Directors; their names, as well as the names of all other directors besides interim CEO Michael Knott and CFO Pierre Schreuder, were removed from Akazoo.com’s “executive management team” section during this piece’s writing.
As part of its statement, Akazoo indicated that the investigators have been unable to confirm the validity and accuracy of earnings statements and annual financial reports filed since 2016.
NASDAQ has suspended all stock-market trades of Akazoo, which is worth $1.16 per share, down from a 52-week high of $7.49 per share, as well as nearly $3 per share one month ago.
Quintessential Capital Management’s aforementioned report opened the floodgates of public skepticism – and prompted not a few additional investigations – by casting doubt upon Akazoo’s alleged subscribership, income, employee totals, and offices.
To be sure, Quintessential found that Akazoo hadn’t occupied its supposed London headquarters in quite some time, according to a statement from the location’s receptionist, besides suggesting that the brand is a “fraction of its claimed size and loss-making.”
Earlier this week, Spotify – which Akazoo claimed to outpace by over three times, in terms of earnings per employee – revealed that it had added approximately six million subscribers during this year’s first quarter.