My Experiences Investing in a Start-Up, Part 4: Gamecom Enters


After graduating Berkeley and spending about a year looking for a job, I finally landed one out in Tennessee.  My wife and I started the long drive across the country, getting on I-40 at the very beginning in Barstow, then meeting our parents in Flagstaff after the first day’s drive for breakfast.  From there it was across The badlands of New Mexico and it’s infamous Highway 666, across the panhandle of Texas where I still wish I had stopped and tried to eat the enormous steak they have for a chance at a free meal, and into Oklahoma.

In Tulsa we stopped and saw my sister and her husband.  He worked for an oil drilling firm as an electrical engineer.  At that time we were all young and childless.  It seems like yesterday, but was actually about 20 years ago.  After a night with them, we continued on, crossing the Mississippi River for the first of many times and into Tennessee.

(This is part 4 of the story.  To find part one, go here.)

I started work and was just settling into the  job.  In the late fall I made my yearly call to Bob to see about the fortunes of Ferris Productions.  This time he had big news.

They were being acquired by a publically traded company, Gamecom.  I looked them up and found out that they had started a series of brewpub, but by this time they had just one asset, a multiplayer gaming system at a bar in Texas.  I asked my friend why they were buying us out, instead of us buying them out since we had real assets, or even why we wanted anything to do with them.

As I suspected, while they had no business to speak of, they were publically traded while we were an S-corporation.  If they bought us out, we would become public.   It was just an easy way to get on the exchanges.

(Note, if you click on a link in this post and buy something from Amazon (even if you buy something different from where the link takes you), The Small Investor will receive a small commission from your purchase.  This costs you nothing extra and is the way that we at The Small Investor are repaid for our hard work, bringing you this great content.  It is a win-win for both of us since it keeps great advice coming to you (for free) and helps put food on the table for us.  If you don’t want to buy something from Amazon or buy a book, how about at least telling your friends and family about our website as a great place to learn about investing and personal finance.  Thanks!

Check out my new book on how to supercharge your finances, FIREd by Fifty: How to Create the Cash Flow You Need to Retire Early.

As directed, I sent in my certificate for two shares of Ferris Productions that Bob had handwritten eight years before in his apartment in Tucson.  A couple of week later I received a certificate for 300,000+ shares of the new company, VirTra Systems.  The new company was trading at around $0.30 per share, so my initial $5000 investment was worth, on paper, a bit over $90,000.

I wanted to get the shares into my brokerage account.  Since I was very worried about this piece of paper that was worth four times the value of my next most expensive asset, my car, I decided to take a half-day off work and drive it to the nearest Merrill Lynch office in Brentwood, TN.  About a week after I had hand-delivered it, it showed back up, left on my porch in a Fed-Ex envelope with a letter explaining that for some reason they could not accept it.

Want all the details on using Investing to grow financially Independent?  Try The SmallIvy Book of Investing.  

Around this time I had also lost my regular broker in Berkeley.  Since my account value had dropped so much as I spent money in school, I had been thrown in the “pool,” where instead of having a particular person you’d place trades with, you would call and whomever picked up would help you.  I decided to just try the office in Nashville to see if I could talk to someone about the situation.

Patrick picked up the phone.  He was a fairly new Financial Advisor, a few years younger than me.  While my account was small, I got his attention when I told him about the certificate for VirTra systems.  I sent it to them via Fed Ex (not able to take another day off work).

Once the shares were in my account, I was interested in selling off a portion to cover my investment and pocket a bit of the profit.  This is when I learned the nuances of selling shares as an original owner.  It was also a period of working with the founders of Gamecom.

To Be Continued….

Click here to read Part 5

Have a burning investing question you’d like answered?  Please send to vtsioriginal@yahoo.com or leave in a comment.

Follow on Twitter to get news about new articles.  @SmallIvy_SI

Disclaimer: This blog is not meant to give financial planning or tax advice.  It gives general information on investment strategy, picking stocks, and generally managing money to build wealth. It is not a solicitation to buy or sell stocks or any security. Financial planning advice should be sought from a certified financial planner, which the author is not. Tax advice should be sought from a CPA.  All investments involve risk and the reader as urged to consider risks carefully and seek the advice of experts if needed before investing.

Comments appreciated! What are your thoughts? Questions?

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google+ photo

You are commenting using your Google+ account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s

This site uses Akismet to reduce spam. Learn how your comment data is processed.