Hollow startup with no revenue is raising $50M in an IPO with CNBC commercials

Summary: Ramy El-Batrawi, who the SEC previously barred from being a public company CEO, is using new investment rules[1] to get uninformed investors to invest in his otherwise hollow company. The company is airing commercials on CNBC to try and get investors. The funds from the IPO will largely flow to Mr. El-Batrawi and the other directors.

-The offering site: https://yayyoipo.com/

-SEC filing highlights [2,3]: IPO is for $50mil. Company has $160k in assets, $3k in liabilities, $1mil net loss, $0 in revenue

-Commercials advertising the IPO (not the product) are airing on CNBC[4]

-Company Overview Document shows they expect to grow their revenue from $0 currently to $5B in 2018 (almost fortune 500 in one year!) to $30B in 2021[5]

The CEO, Ramy El-Batrawi

-Was charged by the SEC with stock manipulation scheme[6]

-In 2010, he was banned from being an officer of a public company for five years[7]

-A CNBC commentator was also indicted (but I don't think convicted?) in this case, as she allegedly took $1.1mil as part of this scheme[8,9]

The company's mobile applications:

-<500 downloads on Android, two iOS reviews. The reviews just that the app doesn't work at all.[10,11]

Preliminary Offering Circular [12]

-Page 62 states that if the company raises $50mil in the offering, Ramy El-Batrawi will then own 49.9% of the company (which currently has $160k in assets)

-Page 46 details a share buyback plan for an LLC owned by Mr. El-Batrawi

-IPO price of $8, but dilution of $6.50 if the IPO raises the max amount

-The people who determine compensation are the directors (also majority shareholders) themselves (no independent directors)

-They state that they don't have any significant foreseeable revenues in the future (very different from the Company Overview Document, above)

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