Struggling social media business Moko Social Media Ltd. (Nasdaq: MOKO) is selling its political commentary unit to True Blue Media LLC, a company owned by the founder of Media Matters, which counts U.S. presidential candidate Hillary Clinton among former advisers.
Media Matters, founded in 2004 by David Brock, is a politically liberal organization based in Washington, D.C., "dedicated to comprehensively monitoring, analyzing and correcting conservative misinformation in the U.S. media," according to the organization's website.
Under the terms of the deal, political commentary business Blue Nation Review will be sold to True Blue, in which Moko will take a 20 percent stake. Brock will own the additional 80 percent of the business.
Moko, headquartered in Alexandria, Virginia, develops products used to build mobile social networks, including for college and intramural sports.
Moko, which has been around as the current business since 2013, has struggled. Its auditors raised substantial doubt about its ability to continue as a going concern because it is not clear if the company has enough money, or will make enough money, to finance its business plan, according to a filing with the U.S. Securities and Exchange Commission.
The business incurred $15.8 million in losses for the fiscal year ended June 30, SEC filings show. The company says that until it becomes profitable, it may require additional funding, which may not be available.
The company expects the sale of Blue Nation Review to allow it to focus on its core student division, in line with Moko's strategic plan.
For more on politics and M&A, see With 2016 Election Looming, Politicians Target Carried Interest and In Election Year, Mid-Market Public Policy Will Attract Attention.