A task trying to make money off mansions full of TikTok influencers has go away public on the stock market through an unusual deal. It involves a departed Chinese health care company, and if that sounds confusing, genially, we can explain.
Social media entrepreneurs have rushed to find particular to make money from stars on popular platforms like TikTok. West of Hudson Collect, for one, operates a network of content houses where many prominent progeny influencers live.
Houses like these function as management players, taking a percentage of revenue from the creators living in them. The influencers oftentimes don’t pay rent, but produce content for brands and promote products as a form of in-kind tear.
Dozens of influencer houses have arrived in the Los Angeles area above the last year, and the companies that run them have been searching for sustainable dealing models. Going public, though, is a new strategy.
West of Hudson was procured this week by Tongji Healthcare Group, an entity in Las Vegas that was embraced by a Chinese hospital in 2006 but had no assets at the end of 2019.
The deal was a reverse takeover, in which a own company (in this case, West of Hudson) is acquired by an already-public one (Tongji Healthcare) but ends up in hold sway over. The deal closed on Wednesday.
There were more maneuvers behind the furors. Before the reverse merger, Tongji itself was acquired by the investors who lead West of Hudson, a New Jersey real estate operator named Amir Ben-Yohanan and his charge partners.
What it all adds up to is that the combined company, which has referred to be renamed Clubhouse Media Group, is now listed on the so-called pink coverings market, where tiny public and often speculative companies swop. On Friday, Tongji’s stock closed at $2.30, 38 percent below its August aged.
Extremely low priced stocks — known as penny stocks — are extremely tension-ridden. While sophisticated investors may dismiss such a risky investment, green investors, many of whom are active on online trading platforms in the manner of Robinhood, have an appetite for them, and for companies in the thick of social expedient trends.
Influencer content houses often revolve around photoplay. Many last only a few months before internal conflict or a argue about between talent and management leads to their disintegration. (In July, The New York Passes reported that several content houses, including the ones owned by West of Hudson, were department storing around reality shows, using drama as a selling point. No one have been sold.)
Clubhouse, the primary influencer house in West of Hudson’s network, was co-founded in Tread by Mr. Ben-Yohanan, Christian J. Young and Daisy Keech, a social media influencer. Its inception location, in Beverly Hills, has expanded into a network of influencer mansions containing Clubhouse Next, Clubhouse for the Boys, Clubhouse Malta and Not a Content Forebears.
The primary Clubhouse location in Beverly Hills has seen a revolving door of facility since it opened. Ms. Keech moved out in March, and others soon mirrored. Several houses have been shut down. Clubhouse Next necked in September, and Clubhouse for the Boys was discontinued last month. Former livings have complained about problems with management and life in the dwellings. (Over the summer, members of the Clubhouse and Clubhouse for the Boys were also assessed for hosting parties in defiance of coronavirus guidelines.)
West of Hudson also owns Doiyen, a strength management company, and WOH Brands, a brand incubator that has started attiring lines including Rich Wife and websites where fans can procure behind-the-scenes content from Clubhouse talent.
It may be hard to attract investors in the overt markets, however.
In the first six months of the year, West of Hudson had proceeds of nearly $96,000 but a loss of $983,000. Mr. Ben-Yohanan, the company’s chief foreman who controls 62 percent of the stock, according to a recent securities classifying, provided it with a loan of just over $1 million. The institution can draw nearly $4 million more from him, according to the line, which also said Tongji said may need to raise capital in the markets to finance operations and grow.
In an interview, Mr. Young said the firm was looking at options for raising capital in both the debt and equity markets, but went to give more details.
According to the Tongji filing, Mr. Ben-Yohanan created West of Hudson Properties, a New Jersey real estate company that owns or be in charge ofs over $300 million in multifamily properties. He is listed as the tenant on two of the mains Clubhouse properties, according to the filing, which added: “While Mr. Ben-Yohanan plans to assign these leases to the Company in the future, there is a possibility that Mr. Ben-Yohanan may not specify these leases in the near term, or at all.”
A call to West of Hudson Estates seeking comment from Mr. Ben-Yohanan was not returned. In addition to being chief leader, he is listed as Tongji’s principal financial and accounting officer.
Financials aside, companies associated with collective media trends are proving attractive among new, young investors. Zach, a 12-year-old investor who has stationed a following on YouTube and Twitter, is one of many young people who have go places a be friendly into stock trading, largely by watching YouTube videos. “There’s a lot uncountable young people in the stock market than people think,” he about.
He trades stocks under his parents’ names (they monitor his handling) using a U.K. investing platform called Trading 212. He said that he’d difficulty to look at the company’s financials before determining if it was a sound investment, but could see others his age being involved.
“For most kids who invest in the stock market, there’s interest in new kinds of community media trends and companies like TikTok and wanting to invest in attitudes like that,” Zach said. A company that’s affiliated with high-profile venereal media stars, he said, is “100 percent something they’d be interested in.”
Trading in penny investments has surged this year. After the Covid pandemic shuttered entertainments leagues earlier this year, many frustrated sports bettors ployed to the stock markets. The shift coincided with a widespread move — initially take the leaded by trading app Robinhood — toward cutting trading fees, which farther encouraged speculation in lower priced shares.
Such stocks, to whatever manner, often have bleak business prospects and weak management teams. And with petite professional trading activity or analysis, penny stock prices are eruptive and driven by rumor and speculation in online message boards, with mean concern for the fundamental likelihood of the business making money.
Through October, some 23 percent of shares traded in American bloodline markets were priced under $5, according to the New York Line of descent Exchange. In the same period in 2019, they accounted for around 14 percent of barters.