NEW YORK (
-- So you thought
was a bad idea for an IPO? Wait until you hear about
Gold Party Payday
, which is at the other end of the spectrum in turns of size and scope.
FB, the social networking giant, reaches nearly a billion people, employs thousands and profits in the multiple millions. Gold Party, founded on the
(TUP - Get Report)
model, employs one person and loses money -- a whopping $560 last year -- to be exact. GPP even had to dig deep to finance the $30,000 needed to go public with
The company is hoping to raise $80,000 from the offering, an amount it plans to use to fund expansion. So what's the business? Gold Party Payday organizes events and parties in which guests bring their unwanted jewelry, scrap gold and silver, coins and other items to sell. The event host receives 10% of the gross proceeds, plus an additional 5% of the gross proceeds if a guest agrees to host a party themselves. So it's just like the Tupperware party your Mom held, but gold, not plastic containers, changes hands.
GPP has held a mere 12 parties to date and purchased $6,000 worth of gold, a total of less than four ounces at current prices. That breaks down to $500 in proceeds per party, netting a grand total of $50 to each host who probably spent more on food and drinks for the guests. Gold Party also plans to support fundraising events hosted by churches and other religious organizations. Nothing says Amen like selling gold, right?
I'm not sure if you even wanted to buy shares, where you could do so, since the offering is self underwritten,. The company says it can issue 100,000,000 shares, but so far has only given 4,000,000 to its President, CEO and CFO Tatum Morita. Modestly, Morita, the lone employee referenced earlier, does not accept a salary yet.
To be fair, Gold Party is being presented as a development stage company, the seeding of an idea. So perhaps in the future it could become another home social-network success like Tupperware. which was founded in 1946. Tupperware invented the idea of party plan marketing and now has a market cap of $2.9 billion. It even pays a dividend.
There are plenty of success stories for this type of marketing to point to. The Pampered Chef sells kitchen ware and caught the attention of
. Warren Buffett bought the company in 2002 for an estimated $900 million.
has also been successful as well with the format, despite its recent struggles.