Today saw worldwide protests to demand that student’s lives and safety become a priority by ending gun violence and mass shootings – starting with schools. The movement, born of tragedy, has morphed into a cause not dissimilar to the ones I saw during the Vietnam war – sans violence. These protests seek to place the spotlight on Congressional inaction and President Trump’s failure of leadership to prevent further violence.
In a surprising twist, these students have already succeeded in gathering the support of at least one leading Republican donor, perhaps dampening the hopes that this issue would subside prior to the midterm elections. Now this issue (among others) could be a front-and-center talking point ranking up there with NRA scorecards and contributions. Perhaps the conservatives that supported Citizens United v. Federal Election Commission in 2010 will rue that decision as the tables could be turning.
At the very least, the students of Marjory Stoneman Douglas High School are gaining an invaluable civics lesson which crosses all the societal divides currently plaguing America today. If their efforts gain further traction, we could be witness to a generational change agent over the long term.
Another item crossed my desk which could rate as a medium term impact. Lest I be classified as biased, Fox News reports that changes implemented in some states (which were precursors to the National tax plan) are failing. It appears that gradually implemented tax cuts might “trickle down” (to a degree), but are problematic without a phased approach. Add to this the inability of states to run deficits – something which the US government is well versed in. It just begs the question of how much is too much of a deficit? Something to keep an eye on – particularly when tariff uncertainty is stirred into the mix.
The final item this week – a cryptocurrency that has peaked my interest (actually two). Kevin O’Leary (Shark Tank) spoke with CNBC on March 19th about the idea of financing a hotel with an ICO. “Instead of a stock, a share, it’s a coin. With a smart contract approved by the SEC. You will be an owner of a third of this hotel. If it works, it will be the first of its kind.” Intrigued, I went digging into Edgar and found nothing – perhaps it’s a private filing. But I did find another eerily similar one for property – not a hotel. Also the dollars are different enough for me to realize there are two – not one – in progress. An ICO blessed by the SEC? If so, that addresses a number of legal issues.
Reviewing the filing of The Praetorian Group, does present a few issues – both pro and con. The one positive is an annual ‘dividend’. On an Annual basis, all Company PAX Token Holders shall be entitled to their share of our net profit, (revenue minus expenses off the real estate holdings) that the Company will distribute, in its sole and absolute discretion. This will be paid in PAX tokens purchased on the secondary exchange when the Company achieves profitability. We will provide detailed quarterly reports that will be published on our website to ensure full disclosure and transparency respecting our business, operations, and net profits and/or losses including any public disclosures required by the SEC. (p.27)
- offered only to accredited investors (p.15)
- probable dilution – All investors must be aware that depending on the need to raise additional capital, they will in all likelihood experience dilution associated with the value of their PAX token. At this time, the Company cannot project whether or not it will be required to engage in subsequent ICO offerings to fund its business operations and future prospects.(Pg 28)
- Essentially like a tracking stock – PAX Token Holders will not have a direct or indirect ownership equity stake in the Company and/or the Distributor but rather, as noted earlier a profit allocation, at the Company’s sole and absolute discretion (Pg 29)
They bill themselves as a Cryptocurrency Real Estate Investment Vehicle (C.R.E.I.V.) but the unknown is whether they have a tax structure similar to a traditional REIT. Getting closer to the mainstream, but still not quite ready for prime time in my book. When the details of Kevins’ are unveiled I’ll take a look at his.
Next week – month end review already!