Equity Story has built an audience of 1200 paying subscribers which brought $1.1 million in revenue last year, using podcasts, stock tips and weekly live Q&As with traders David Tildesley and Paul Kopetz. Subscribers pay between $1000 and $2500 a year.
It also has a $5 million managed fund charging investors a 17.5 per cent quarterly performance fee.
The team aims to target the lack of financial literacy within capital markets, and most of their growth plans revolve around marketing campaigns run by agency King Kong.
“The shocking thing is how bad people are when they come through the door,” Mr Tildesley said.
“Young people today, they are so influenced by dodgy people in the Reddit crowd or whatever, and it’s a very dangerous climate for them.”
Mr Tildesley, Mr McGraw, and Morgans investment adviser Mark Goes will continue to own substantial slabs of the company, holding 25.5 per cent, 15.8 per cent and 10.5 per cent respectively after the listing, according to the prospectus.
As such, should the minimum $4.5 million be raised through the IPO process at a fully diluted market capitalisation of $23.5 million, Mr Tildesley’s holding will be worth just under $6 million, Mr McGraw’s holding will be worth $3.7 million, and Mr Goes will hold about $2.5 million.
The next generation
Much has been made of the waves of eager investors taking to internet platforms to try to make money, but the regulators are clamping down on financial misinformation as it races across forums and websites.
Last year, the Australian Securities and Investments Commission warned against online “pump and dump” scams, where traders artificially inflate stock prices by promoting fake news or paid-for promotions of a company on social media forums.
It also warned it was hunting down “finfluencers” giving financial advice on high-volume social media platforms such as TikTok and Instagram without the appropriate Australian Financial Services Licence.
Equity Story, which has an AFSL, said it was careful to only give general financial advice.
“We just tell people whether or not we think a stock is a buy,” Mr Tildesley said. “And we never, ever get paid by companies to promote their stock.”
Hot Copper, a long-standing penny stock forum, generates most of its revenue from advertising banners on its website, but it also manages a small-cap stock portfolio thanks to its strategy of investing in new IPOs in exchange for advertising spend.
Equity Story plans to also provide early investment opportunities for subscribers through a partnership with Andover Corporate Finance.