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Investing in Hollywood: are the "star" IPO?

- October 04, 2014

Investing in Hollywood


An American financial company Fantex is working on the establishment of an investment instrument, allowing our clients to invest in the career of popular actors and musicians. According to preliminary data, the investment in Jennifer Lawrence or Tom Cruise would work as follows: the star Gets a lump-sum payment from an investment company and agrees on the deductions from their income in the future; investment company IPO named celebrities, after which the shareholders receive dividends at the appropriate rate. It is noteworthy that the issued shares are traded only on the internal platform Fantex, and can be converted into securities of the company.

The emergence of such investment idea became possible after implementation in 2013, the project Fantex to invest in a career of professional athletes. Tool for investing in shares of athletes "works on the same algorithm, the value of the securities is directly dependent on the success of an athlete.

Hollywood financiers and lawyers have agreed in the estimates of new investment initiatives, identifying both the pros and cons of the project. For example, a partner of finance company Stroock Stroock & & Lavan Schuyler Moore gave an optimistic forecast, noting that the launch of this tool should be expected in the near future. Strongly disagree with him lawyer Ken Herz (among his clients will Smith and Britney Spears), who believes that this financial adventure can lead to serious violations of the rights to privacy of celebrities and independent choice of roles.

Also among the potential pitfalls of Fantex experts say draining the Insider data (in the Hollywood industry employs a large number of people recognize about new movies and casting long before official confirmation) and the instability of an acting career (example John Travolta). Jill Smith (former Attorney Dustin Hoffman) notes that "Star rallies" will be very susceptible to human factor-just imagine what changes in the dynamics of the quotations could lead the actor to go to rehab, or statement on a temporary retirement from professional activities.

It is noteworthy that such projects existed previously. In 1997, the artist David Bowie offered to fans and investors to purchase bonds at the expense of its future earnings from sales records, but the initiative was not successful because of high taxes. In the early 2000 's was established online platform Hollywood Stock Exchange, users that purchased virtual shares of celebrities, but the power of the United States opposed the draft, following a statement by the company about the real market.

Ultimately, the fate of a new investment instrument remains unresolved, but it should be noted that the prospect of investing in Leonardo DiCaprio, Cameron Diaz and Bradley Cooper looks very intriguing.
 
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