SDSP Soccer Marketing, Inc. have filed paperwork with the SEC indicating an intention to take the San Diego Flash public.* If successful, the Flash would be the first American soccer club to be publicly traded. As it stands, Manchester United are also tradeable in the US as are a handful of other clubs on lesser foreign exchanges.
The club has 50 or so investors, but at this stage it is unclear exactly how what a public offering would provide the club. Initially, I expect the club to see a nice boost in publicity and possibly have a successful public debut – but, a brief look at the long term history of other publicly traded clubs paints a much starker picture. To be fair, comparing some of these offerings to the others is apples and oranges in some ways, but I think there is enough evidence to be cautious about how the Flash would be any different over the long term.
I’m no financial analyst, but something seemed fishy about this story as I read about it. Upon researching this story a bit further, it appears that SDSP Soccer Marketing, Inc. (San Diego Flash) has not in fact filed any paperwork with the Securities and Exchange Commission (SEC).
The filing referenced in the original post is a filing made on behalf of a company called All In Blind, Inc. and run by Adri Chimberoff, (President, Secretary, Treasurer and Director). Per the filing, On 15 January, 2014, SDSP Soccer Marketing, Inc. entered an agreement with All in Blind, Inc. where in SDSP would be acquired by All in Blind in exchange for 12,000,000 shares of All in Blind. Going forward, SDSP will operate as a wholly owned subsidiary of All in Blind.
This transaction does place SDSP within what is technically a public company, albeit one that is nearly 100% owned by Adri Chimberhoff. Per All in Blind, Inc.’s S-1 filing:
There is no public market for our common stock. Our common stock is currently held by one shareholder. Therefore, the current and potential market for our common stock is limited and the liquidity of our shares may be severely limited. Other than pursuant to certain exemptions permitted by Rule 419, no trading in our common stock being offered will be permitted until the completion of a business combination meeting the requirements of Rule 419. To date, we have made no effort to obtain listing or quotation of our securities on a national stock exchange or association.
With the “acquisition” of SDSP, it would seem that shares of common stock in All in Blind will be held now by multiple shareholders. Still, extracting any value out of these holdings is nearly impossible, unless the one of the shareholders were to buy the other out.
If the stock ever becomes tradable, the trading price of our common stock could be subject to wide fluctuations in response to various events or factors, many of which are beyond our control. As a result, investors may be unable to sell their shares at or greater than the price at which they are being offered.
Feel free to wade through All in Blind’s S-1 for more information. The gist of it all can be summed up in this sentence though…
Prior to this offering, there has been no public market for All In Blind, Inc.’s common stock. The Company is a development stage company which currently has limited operations and has not generated any revenue. Therefore, any investment involves a high degree of risk.
Not only has the company not generated any revenue, their year-end 2013 “financials” show an accumulated deficit of $18,500.
Finally, the S-1 also contained this additional statement:
In addition to his positions with the Company, Mrs. Chimberoff has worked at Penny Lane the Salon for 13 years as a Cosmetologist and Salon Manager. Mrs. Chimberoff’s management experience allows for a basic understanding of the financials and operations of a business which will give Mrs. Chimberoff a basis for evaluating potential merger/acquisition candidates.
It is difficult to say what or whether there are really any broader implications for the filing as by Chimberhoff’s own description in the S-1, the shares are essentially valueless. But it seems to me that All In Blind is an aptly named for a blank check IPO company, especially one based in Las Vegas. I truly wonder if Flash shareholders have any idea who they’ve hitched their wagon to.
*Denotes information in the original post that has been updated below.