Is it really worth the effort
I've been asked by a Californian engineering company to put together a proposal for a fabulous new website. The odd part of the deal would be that instead of paying in cash, they'd give me equity instead. A bit of a gamble, but I started putting together a plan anyway.

One of their main clients turned out to be their parent company. Nothing unusual there. But then on the parent company website, I noticed a share price. I went onto the MSN site, tapped in the symbol and brought up all the history.

As with many a company, the shareprice had been falling for a few months now. 52wk high - 0.76, 52wk low - 0.15, current price - 0.19

Then I noticed the SEC filings and found their annual report which doesn't look good.

Total assets - $99,000 (down $60,000 from last year)

Total liabilities - $11,100,000 (up $1,600,000 from last year)

"...suffered recurring losses from operations and has a working capital deficiency, which raises substantial doubt about its ability to continue as a going concern."

Is it really worth my while?
( sandettie light vessel automatic New Twitter - @bollocksreally, Tue 27 Jan 2009, 9:10, 13 replies)

I'd say
"No."
( Cawl, Tue 27 Jan 2009, 9:15, closed)

Beat me to it!
.
( Monty Boyce, My cheese game is strong, Tue 27 Jan 2009, 9:20, closed)

Well...
Great minds and all that...
( Cawl, Tue 27 Jan 2009, 10:14, closed)

Short answer: no
Long answer: fuck no!
(MrC. Having the most boring username on b3ta since 2004, Tue 27 Jan 2009, 9:29, closed)

As an accountant, I would have to say "yes"
by which I mean "NO!!!!"

But seriously, a good measure of a companys stability is its asset ratio (Assets/Liabilities). Generally this shouldnt be below a value of 1 (i.e. liabilities do not exceed assets).

99000/11100000 = 0.009 (HOW IS THIS COMPANY STILL TRADING???)

They may give you 10000 shares in their company, but 10000 x £0 = £0
( Colonel Dracula Two manky hookers and a racist dwarf, Tue 27 Jan 2009, 9:48, closed)

10000 x £0 = £0!?!
Why did no one tell me! The shares I bought from my brother in 'Bodgit and Leggit' are worth NOTHING!?!



Crap.
( gareth_alien will be human again at, Tue 27 Jan 2009, 10:00, closed)

Do it...
Do it but dont go OTT...

Never know your website might be just the boost they need and in a few years time be worth a fortune?
(Lip Up Fatty Fatty Reggae still loves BBQ food on, Tue 27 Jan 2009, 11:10, closed)

If they turn out okay
then yes it may be- for example if they're a new-start who've got huge outgoings as they kit themselves out and have a small customer base.

That way you'll have tonnes of shares that will be worth an increasing amount

If you can pull up historical data and they're older than a year or two, don't do it.

Edit: Wait, they spent $11M and only have $99k of assets worth to show for it? I'd steer clearer than I suggested earlier.
( uberdeity Wondered why Owen Lars knew of the term "hell" on, Tue 27 Jan 2009, 11:13, closed)

Depends......
.....we call it opportunity cost. What else would you be doing with your time? If you could be making real money doing something else and this job turns out to be worth nothing, the opportunity cost is what you would have made by doing the other job. (Following me so far?) If, however, you had fuck all to do you might as well take the gamble on the shares being worth something one day.........
(Pork2311, Tue 27 Jan 2009, 13:16, closed)

Get paid up front.
Then do the job.
(powervator and NONE SHALL PASS, Tue 27 Jan 2009, 13:22, closed)

Hmm
If its something you can knock up easily enough fair play but if there's a lot of work and potential for major job creep I'd ask for cash. If they need the site they'll pay!
(Fullrecovery, Tue 27 Jan 2009, 14:52, closed)

there are one-person hobby businesses
who are prepared to pay for a website. These guys aren't. That doesn't exactly inspire confidence in the value of the equity.
(apeloverage committed the vile act of onanism on, Tue 27 Jan 2009, 16:56, closed)

"You Can't Con an Honest Man"
They're appealing to your greed, essentially hoping you'll take a gamble that they're not as fucked as they look. If they had any real belief in themselves, they'd be taking that gamble themselves.

Simple question: If you had the cash up front, would you buy shares in this company with it?
(Richy_T hundreds if not thousands of dollars, Tue 27 Jan 2009, 19:12, closed)