A bad investment or good?

[RON1952]

Recently, I have been asked if I would like to invest in a project that is an untraded security. I have never purchased shares before in anything. I know the person that asked me, but I don't know anything about buying shares. This company has invented a electromagnetic motor that produces 1.2 megawatts of power and has been looked at by Draper laboratories now 3-times, and by Dr. Haskew at the University of Alabama. Draper Laboratories says it has a couple of interested parties with one of then being GE. They said they feel it will sell for some where between 2.5 and 7 billion dollars. The inventor is waiting for Dr. Haskews final remarks. This may sound stupid but how do I make money on my shares if I buy in, when it is a untraded security?

[Jayhawk]

Sounds a lot like a flux capacitor. Using 1.21 jigawatts you can get to the future.

:a20:

[manaboutown]

If you do not understand it do not do it!

[billethkid]

If you do not understand it do not do it!
:agree:

If you do not know what constitutes the project being a success or failure, who/where the money goes or how the investors will be compensated you should give serious consideration to not participating.....even if money is no object and you want to take a flyer. There are more predictable ways to do that.
When ya don't know you just go along for the ride and hope it turns out OK.....
btk

[TrudyM]

Have heard of two instances that ended badly. One where an inventor got investors and then either didn't make the final advancements needed to go into production or sell the product and the investors lost their money when the inventor then went to work for the company that they thought would buy the invention. The inventor gets a good salary and support to finish the invention and because it has been changed slightly from the original the investors are so out of luck.
The second one was a guy who never intended to go into production or sale and just keep living off of R and D money from investors for 10 years with a long line of excuses. Each excuse requiring more money.

I agree with the others don't do it. Both of the cases above involved people who were into finance and investments and they still got burned.

[l2ridehd]

Rule number one of investing. NEVER invest in anything you don't understand completely. If it sounds to good to be true, it probably is not true. If you have never bought and sold stocks, an untraded stock that has zero liquidity, is not a place for the faint of heart.

Unless you trust this person with your life and the money you invest is never going to be needed so that if you lose it all, it's not a problem, walk away. No, run away.

[jaringg]

Just a warning "Energy cannot be created" a basic law of physics.

[dewilson58]

Speculation. If you want an investment speculation in your portfolio....this would be it.

[cmfjr]

It would be interesting to learn what you decide and the outcome of this project!

[2BNTV]

Rule number one of investing. NEVER invest in anything you don't understand completely. If it sounds to good to be true, it probably is not true. If you have never bought and sold stocks, an untraded stock that has zero liquidity, is not a place for the faint of heart.

Unless you trust this person with your life and the money you invest is never going to be needed so that if you lose it all, it's not a problem, walk away. No, run away.

:agree: I would do only what makes me able to sleep at night. Putting money into a investment that you do not understand how it works, will make me very nervous. This sounds like a highly speculative investment.

[784caroline]

Be very careful. never put money into something you really dont understand and moreso money you cannot afford to "lose". If this project is so big, why would your good friend have to come to you as opposed to true "venture" capitalist who invest in things like this typically for a % of the action.

You never did say what your financial committment was but as your "first" investment....... I would never do this. The only way you will get your money back is if this is successful....and how is that determoned?? Then there is always the possibility that after a period of time more money will be needed to further the process and who will he go to ...you in order to protect you initial investment you will have to throw more money into the fire. STAY AWAY.

[JourneyOfLife]

I would not even consider it.

[rubicon]

My first thought if presented this opportunity would be "just why am I the fortunate bloke"? If this thing is really doable the big players would have swallowed it up before anyone else had a chance.

I leave that type of speculation to others and never get emotionally involved...Remember the Tulip war

[jblum315]

I put a little money into Krispy Kreme when it went public, thinking it was sure to make a profit. Then KK started closing stores. I lost. So did they.

[784caroline]

I put a little money into Krispy Kreme when it went public, thinking it was sure to make a profit. Then KK started closing stores. I lost. So did they.

Taking a "flyer" on an IPO public offering is alot different that what the OP described. I would have no problem doing an IPO ..if you could afford to lose it....but not a venture capital offering.

[Challenger]

Taking a "flyer" on an IPO public offering is alot different that what the OP described. I would have no problem doing an IPO ..if you could afford to lose it....but not a venture capital offering.

Warren Buffet and many other Sages would say- stay away from IPOs.

The only people sure to make money are the issuers and maybe the underwriters(maybe):doh: