Momentum V17

[John Painter]

When I created this thread, I was hoping to get a response from people, but instead got none. I will try again.

Elio Motors will be offering us the opportunity to buy our shares from them directly instead of buying them through the SEC crowdfunding offering.

What will you do when this offer comes? Will you buy your shares directly from Elio Motors or will you wait and buy them through the SEC crowdfunding offering?

From EM directly. #12436

 

[Adamant]

Yes. You are buying stock in the company, just like you would get when you call your broker and say "Buy me 500 shares of Google!"

But how does this work if the company is private? If it's not public, how to the people with the shares make money?

Is this also something where if we have x-amount of stocks and don't sell them, we'll make money on it? Like a check in the mail every month until we sell the shares?

 

[slinches]

There are essentially two ways that investors can be paid back for their investment. You can sell the stock or earn dividends (aka periodic checks) paid out as your portion of the profits. In any start up, it's exceedingly rare that they'll pay dividends since any profit should be put into growing the business. EM stated that they will list the stock on the OTCQX exchange where you may be able to sell your shares if someone is willing to buy them. The idea there is that the value of the company should grow as it matures and that added equity should show in the value of your shares when you go to sell.

Reality, of course, is much more complicated. Pricing a stock in an over the counter (OTC) market is tricky since there are far, far fewer trades to use as a reference and the valuations can be even more volatile than on the big exchanges.

 

[Jeff Porter]

Thanks for the answers everyone.

It is appearing that if we go to buy shares from Elio Motors, we should probably not expect to gain financially from those shares. Is that a good bottom-line way to state it?

Yes, there are other benefits, such as increasing the chance that they make it to production, and increasing the chance of EM creating jobs, etc.

 

[Jim H]

From EM directly. #12436

It doesn't matter to me. At my age I don't expect to see a profit. Just want to invest in the future and provide an alternative vehicle opportkunity for my grand kids. If there is any profit it will be in their inheritance.

 

[slinches]

It is appearing that if we go to buy shares from Elio Motors, we should probably not expect to gain financially from those shares. Is that a good bottom-line way to state it?

I wouldn't say it quite that way. If EM succeeds in producing and selling vehicles at the quantities they intend to and especially if the can sell CAFE credits on top of that, the stock may end up being worth vastly more than the purchase price. In that case I think EM would eventually file as a publicly traded company so that the initial investors (including Reg A+ investors) can more easily sell their shares. Though, if EM doesn't succeed and never gets to the point of positive net revenues the stock will likely be worthless.

Essentially, by investing we're simultaneously betting on the success of the company and improving their chances of success. My guess is that a couple of years from now the shares will be worth either 3-10x the Reg A+ value or zero.

 

[Jeff Porter]

There are essentially two ways that investors can be paid back for their investment. You can sell the stock or earn dividends (aka periodic checks) paid out as your portion of the profits. In any start up, it's exceedingly rare that they'll pay dividends since any profit should be put into growing the business. EM stated that they will list the stock on the OTCQX exchange where you may be able to sell your shares if someone is willing to buy them. The idea there is that the value of the company should grow as it matures and that added equity should show in the value of your shares when you go to sell.

Reality, of course, is much more complicated. Pricing a stock in an over the counter (OTC) market is tricky since there are far, far fewer trades to use as a reference and the valuations can be even more volatile than on the big exchanges.

Thanks slinches, I have listened to most of the video, and I heard Paul mention OTCQX. I'll google it and start learning about it.

I wouldn't say it quite that way. If EM succeeds in producing and selling vehicles at the quantities they intend to and especially if the can sell CAFE credits on top of that, the stock may end up being worth vastly more than the purchase price. In that case I think EM would eventually file as a publicly traded company so that the initial investors (including Reg A+ investors) can more easily sell their shares. Though, if EM doesn't succeed and never gets to the point of positive net revenues the stock will likely be worthless.

Essentially, by investing we're simultaneously betting on the success of the company and improving their chances of success. My guess is that a couple of years from now the shares will be worth either 3-10x the Reg A+ value or zero.

Yep, understand and it makes sense. There's the bottom-line to tell folks that might not know yet about Elio: if you invest, you're betting that the company will make it to production and you're helping them get there. If they make it to production, chances of their success are very high and the ROI will be big in a few years for the early investors .

 

[Jeff Porter]

Here's a good introduction to OTCQX, from Wikipedia:

"The OTCQX marketplace includes both multinational companies seeking access to U.S. investors and domestic growth companies. To be traded on this tier, companies must undergo a qualitative review by OTC Markets Group. Companies are not required to be registered with or reporting to the SEC, but they must post financial information with OTC Markets Group. In addition, U.S. companies must be ongoing operations (i.e., no shells) and may not be in bankruptcy, while foreign issuers must meet the requirements of qualified foreign exchanges. Additional oversight of OTCQX securities is provided by requiring every issuer to be sponsored by approved third-party investment banks or law firms, called Principal American Liaison (PAL) for non-U.S. issuers and Designated Advisors For Disclosure (DADs) for U.S. issuers."

On their website, www.otcmarkets.com, they talk about companies moving from the OTC exchanges to the NYSE or NASDAQ. At first look, it's the minor-leagues for major stock exchange trading. The companies are good, have tremendous potential, and are not quite at the big dance yet. Just my opinion. I'll look forward to learning more.