Bill: First the issue of preference shares: "I'm well aware of the tax preference situation re small co. shares - which goes back pre-Clinton, I believe." To settle the issue for good, I went back to my safe and pulled the second batch of stock certificates on the start up company I help found. We issued these shares within months of the signing of the new law, and the date on my certificates is Sep. 1993. So it was a Clinton's Law, and Carraway probably just reissued to every owner in the company additional shares in essence keeping the ratio constant. Even if he did not, he had some money partners that felt he should be entitled to a bigger share of the pie. We know he paid at least 11 cents for these shares and considering that the company was just starting up (about two years old), the risk were quite high and thus his rewards should be high. This is the fun and dangers of starting new start ups. The survival rate is rarely better than 1 in ten. (My coffers contain a number of stock certificate which I now consider as classy wall paper, all from start up companies that paid me in part with stock for services rendered).
You are implying that we should worry that GRNO might be a scam. It might be, but then, it is quite an elaborate scam. I do not know exactly how much money was raised in their initial public offering, but it seems that money was put to good use, so far. I have seen some real scams, where immediatly after taking money from the public, the principals simply sat and did everything else but managed the company's purposed business and just lived off the interest generated from the IPO (I own 45,000 shares in such a company paid partially for services rendered, I could not even sell on the IPO since I had a two year limitation, by the time the two years passed the stock was quoted at a penny a share), so I think I have learned to discern such entities from the real McCoy.
Of course due diligence does not hurt, but this should be directed at what they are doing now, not how they distributed the founder stock during their first two years of existance as anon public company.
Zeev |
