Topic: Problematic: CasinoBitco.in IPO Prostectus (Read 626 times)

Thanks MonkeyBear68.

An excellent question, I will post it in the official thread for you.

Thank you for posting it. 

In regards to this thread: https://bitcointalksearch.org/topic/m.3090397

I believe casinobitcoin is right when they repeatedly characterize this investment as "high risk / high reward", except for this passage in the prospectus:

"CasinoBitco.in reserves the right to buyback outstanding units of CBTC on Havelock Investments with a 30 day notice, with the price being determined by the higher of the 30-day weighted average price or the current market asking price of CBTC at the time of the official announcement of the buyback."

Yes, the company is young, small, behind the curve and undercapitalized, and there are many other problems including the ones KingOfSports alluded to (all of this is the "high risk" stuff). Now, *if* the company gets to the point where they start to take significant market share and "break out" commercially with rapid growth on strong fundamentals (the "high reward" part that investors would hope for), this clause would allow the company to unilaterally cash out the IPO investors at the instant valuation, which might cut them off from the lion's share of the upside over the following months/years.

I don't have a problem with this clause in and of itself, especially since the issuer has been above board with its inclusion in the prospectus. But there's really no way that any "sophisticated investor" (as defined by the SEC) being approached through a brokered or unbrokered private placement would touch this without having the clause severed from the prospectus, or reducing the implied P/E multiple by at least an order of magnitude, making the PPS about BTC 0.000018/share.

With this clause, IPO investors will still bear the full advertised high risk, but might not reap the associated high reward.

I'd appreciate it if someone who isn't a "newbie" could repost this to the thread mentioned above. Thanks.