This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
Stocks Under $10 with 50-100% upside potential - 14 days FREE!

Gold Party's IPO a Long Shot to Pay Off

NEW YORK (TheStreet -- So you thought Facebook (FB) 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 Tupperware (TUP) 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 NASDAQ (NDAQ).

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 Berkshire Hathaway (BRK.A). Warren Buffett bought the company in 2002 for an estimated $900 million. Avon (AVP) has also been successful as well with the format, despite its recent struggles.

1 of 2

Select the service that is right for you!

COMPARE ALL SERVICES
Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!
DOW 16,982.59 +22.02 0.13%
S&P 500 1,978.91 +0.57 0.03%
NASDAQ 4,444.9090 -4.6550 -0.10%

Brokerage Partners

Rates from Bankrate.com

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs