It's possible it was "sold at a loss" but the early investors made money.

e.g. by investment round:

   A: $1m for a $10m valuation
   B: $5m for a $40m valuation
   C: $12m for a $100m valuation

A "fire sale" of $15m would yield a profit for Series A investors, a probable loss for B, and a certain loss for C.

Liquidation preference for later rounds might muck up that calculation.

Or if they were already in financial trouble and C came in with 1.x liquidation preference, they get everything (or near it)

But A and B would have liquidation preference too, so how is the money split?

A and B may not have it at all, and anyway if C pushed a hard bargain, theirs will come first.

At any rate, the devil is very much in the details.