TransparentBusiness

Take a look. They promise a corporate bond that expires in a year with a whopping 20% coupon.
They intend to buy pre-IPO emerging companies’ initial equities with this and then cash in better than what VC funds do.

Needless to say I’m very skeptic, but I don’t quite see the risk yet (in the offering that is. In the business model, very much.).

Please help me scrutinize this thing.

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I read it like: Lend my limited liability company USD 1000 'cos I’m going to the casino. I’ll pay you back USD 1200 tomorrow

Probably I missed something though

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This smells like Bernie Madoff stuff.

That was my first thought as well.

Finance the 20% as long as it goes, then sayonara…?

I also read: …and if our bets don’t work out, we use our show to hype the market until we make money.

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You do realize that the bond represents the risk of the business model, right?

Also they are very heavy on marketing, including touting it a good thing that they have to pay 20% interest on their junk bond :rofl:

This seems to be a bit of a gamble in bonds thread

If you want to gamble on bonds why not go with some EIB (European Investment Bank, AAA rating) in foreign currencies like TRY, ZAR or MXN?

Some examples:
European Invest Bank 10.5 04/29/2024 YTM 10,73% TRY
European Invest Bank 6.5 07/07/2027 YTM 6,91% MXN
European Invest Bank 8.125 12/21/2026 YTM 6,57% ZAR
European Invest Bank 0 09/05/2022 YTM 15,86% TRY

You have some 0% cupon bonds as well.
Not sure on how the taxation works on these though but since you don’t receive any cupons and buy the bond under par, is the capital gains free of tax?

All of the bonds are in local currency, so any unfavourable currency movement impacts your return.

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