Secondary Markets are all the rage. Following our last post on Secondary Markets, we understand that a current Crowdcube pitch , Derby Brewing, has come to an agreement with Asset Match for the sale of its shares.
This may seem a little premature.
Derby Brewing is currently a long way from completing on Crowdcube, with just 7 days left. It has already played the discount card by lowering its valuation. The company has no share capital to speak of at the moment, with most of the money in the company there by way of directors loans and mortgages. Its a typical successful, family run business.
So one assumes this deal with AM, is on the basis that CC shareholders will have a way of realising their investment. No timeline is offered but realistically it has to be 2 years plus. So why announce it now?
The deal isnt on the Crowdcube site, again one assumes Crowdcube would wish the brewery to deal with its own secondary market rather than AM. Unless of course they havent really got one - which we all know to be the case.
In a world a little like a washing machine stuck in the spin cycle, AM are also equity crowdfunders, having used Crowdcube back in in 2013 to raise over £250k. Let's hope they are colourfast.
In a world a little like a washing machine stuck in the spin cycle, AM are also equity crowdfunders, having used Crowdcube back in in 2013 to raise over £250k. Let's hope they are colourfast.
It's all a little perculiar. But then so are buses all turning up at the same time.
The platforms may well have worked out that you are 'stuck' with them until the company floats/is sold/goes under.
ReplyDeleteEven in the best world, about 70% will go under.
A secondary market will allow them to make some money out of that 70% rather than nothing.
Outside of the tax issues, the conflicts of interest where the sole market maker also acts as the sole source of new funding, the (probably) rather large b/o spreads and other things I have not thought of,
Excellent idea.
Ok but to make money they have find some really stupid people to buy the shares at such Seedrs upward only prices. In my experience really stupid people dont have spare cash unless they inherited it.
ReplyDeleteOnly this evening someone has agreed to pay more than the last raise price for some Eebria shares on the discussion board. I also see successfully negotiated sales in Landbay.
DeleteJudging by the frequency of worrying questions I see on the discussion boards, I think you're being a little naive if you don't think there're going to be any transactions...
Yes but Rob, idiots have already parted with £301,598,465 on Crowdcube. I'm sure there are plenty more idiots lined up. As an idiot who has invested in over five mediocre but still standing businesses I'd be more than happy to offload some to the next idiot. Is that not how all this works?
ReplyDelete