This article was originally published as the Friday File for the Irregulars on April 3. Following the huge number of requests for info on this teaser, we’ve opened it up to free readers as of April 22 — it has not been updated or revised.
Michael Robinson has a lot of enthusiasm for startups and Silicon Valley. That’s kind of a prerequisite for someone who runs a newsletter focused on breakthrough technologies and the “next big thing” like he does (that’s his Radical Technology Profits, the newsletter he’s pitching today in the ad I’ll be explaining in a moment), so it’s no surprise that he often pitches “get in early” ideas for his newsletter… and in the past, he’s even gone so far as to organize investments by his readers into specific companies through a direct offering, which is a step beyond what newsletters typically get involved with.
It may be for good reason that newsletters don’t directly get involved in selling shares like this very often, perhaps, since the “pre-public” prospectus they touted last Summer was for a direct investment in Stellar Biotech (SBOTF), a company that was supposed to get uplisted to Nasdaq and become “real” but still has a very shaky share price and continues to have no basic economic underpinning as a biotech ingredient supplier (meaning, pricing of their product and current or anticipated sales don’t jibe at all with the size of the company or the investments they’ve made in creating production capacity… at least not yet). So far, that one’s still a story in search of a business — and it’s a story that Michael Robinson and Nick Hodge have sold to investors very well over the past couple years… and still are selling pretty well, if the email questions I still sometimes see from subscribers are any indication (I think Nick Hodge has been pitching it again within the last few months, our look at his “blue blood” pitch is here from last year in case you’re interested).
But that wasn’t really a “venture” funding opportunity — it was and is a fairly capital-intensive aquaculture company searching for sustainable demand for their product, and has been listed in Canada and traded over the counter in the US for almost five years. What is it that Michael Robinson is pitching now as his “get in early” idea that he’s calling a “Private IPO Slice?”
Well, it’s another sort of “direct” offering — but this time, for a venture capital investment in a bunch of different “late stage” companies that he seems to think might be the next Uber or Facebook (or whatever). My first impression was that he might be pitching one of the publicly traded Business Development Companies that invests primarily in startups and venture capital, like GSV Capital (GSVC) that has been repeatedly touted (and teased by newsletters) for its “get in early” access to Facebook shares, then Twitter shares, and now Palantir and Dropbox shares — but this one is something a bit different.
And maybe that’s good — GSV Capital has been profoundly disappointing for investors ever since Twitter (TWTR) came public in late 2013. TWTR is still GSV’s largest holding at about 15% of their portfolio, but even with Twitter up now 12% or so from the IPO price (it’s been down much lower in the past year, as you probably know) GSV is down about 35% since the TWTR IPO and down 50% from where they were during the Facebook pre-IPO enthusiasm. So much for “getting in early.”
Does this new idea he’s teasing have a chance to be better than that? Let’s see what he’s pitching, here’s the start of his latest ad:
“Your Private IPO Slice: The first ever ‘pre-IPO’ deal with terms exclusive to Money Morning members…
“With returns in this private market running as high as 32-to-1, it’s on fire.
“Now we’ve got a way for you to get an insider’s share…”
After that, and his impressive looking bar charts that indicate this market is exploding, it’s no wonder the questions have been piling up on the doormat here at Gumshoe HQ. So what is it? How do you get into this “private, pre-IPO market?”
Here’s some more from the ad to get you further tantalized…
“Nearly every day Bloomberg, The Financial Times, The Wall Street Journal, and The New York Times report on investors who made millions, even billions…
“Like Microsoft co-founder Paul Allen, who made $45 million in just 11 months after TrueCar went public in May of last year.
“Jeffrey Crowe, one of the top private investors in the world, made $762 million the day Lending Club went public this past December.
“Jim Goetz, the driving force behind Sequoia Capital, earned a whopping $3 billion when Facebook acquired WhatsApp last year for $19 billion…
“Of course these people have a lot of money to invest…
“But the multiples are the same no matter who you are.
“And that can mean BIG money for anyone who can gain access to these deals.
“And that’s why I’m here today. To show you how to do just that.”
The multiples are the same? What multiples are those? Did he tell us how much those investors put in to get their $3 billion or $762 million? Uh, no.
He gives a bunch more examples of now-private companies that are expected to “pay out” huge gains to shareholders, these are just a couple of the