We are big fans of VC Lisa Suennen and her blog Venture Valkyrie. In a recent post, A Star is Bought, Sold and Shorted, she enlightens us about Fantex, a start-up that plans to create a stock market out of famous people. Lisa muses about the potential anxiety of owning shares of George Clooney stock, but the cachet of being able to tell her friends, “Oh George Clooney, I own him,” would be well worth it.
Lisa smartly anticipates that an entire new supporting economy would sprout. What a blast it’d be to be a stockbroker or a sell-side analyst! But what about the publicists? Oh my…just think if the PR people for the celebrity or pro athletes’ stock had to comply with SEC regulations! No more selective placements of juicy rumors with media outlets that may not qualify as fair disclosure. No PR person could write a press release fast enough, and the legal team would tear their hair out trying to define materiality – oh hell, they’d throw in the towel – it’s all material in Hollywood, the NFL, NBA and USCF, etc. Surely with more than 40 million followers, @LadyGaga can serve as an established channel for broadly disseminating material information.
Imagine the gyrations of a celebrity stock fueled by social media. Movie star gawkers sipping craft cocktails at Hollywood’s hottest nightspot won’t have their camera phones at the ready. Instead the eTrade app will be cued to buy or sell as they watch for Lindsay Lohan’s next move, then fire off a tweet or post a “like” to pump the stock.
Fantex could alter other forms of investor communications. The US and inTouch tabloids would be replaced on newsstands by annual reports, which would mean a huge come-back for all the design firms that adopted electronic annual reports and lean 10K wraps.
Imagine quarterly earnings reports. We get excited when 100 investors dial-in for a life sciences earnings call. Millions would tune-in to George Clooney’s report. Servers might crash. How the heck do you decide which investor gets to ask a question during the Q&A? Thomson would create an entirely new portfolio of products to cater to this market.
What comes to mind when you imagine this sort of “craz[y]…potentially lucrative and destructive idea,” per Lisa? How do you view this Fantex market? Kudos to them for a brilliant idea! Great fuel for thought. It’ll be fascinating to see if this plays out.