Nevermore!

I read this yesterday but was foolishly — and fruitlessly! — putting the PC in BitTorrent zombie mode.

Now it seems to be generating widespread attention.

Penniless author sells shares in next novel

Investors can pay $2,000 (£1,000) in return for a 10 per cent share of the royalties of Tao Lin’s as-yet-unfinished second novel.

Tao posted details of his “initial public offering” on his popular literary blog last week and claims to have already lined up buyers for five of the six shares.

He predicts, with little supporting evidence, that the novel will sell at least 13,000 copies in the US within two years, and that investors should be able to turn a profit within 40 months.

With potential film and reprint rights included, investors would then continue to reap dividends “every 6 months for the rest of their lives without having to do anything,” Tao predicts.

And:

And the 25-year-old says he likes the idea of a group of capitalists having a financial interest in his sales.

“If anyone buys shares they will have concrete motivation to promote me and that also will increase sales,” he wrote.

“If people buy shares I will probably, I think, make even more money than if I had not sold shares of my royalties.”

Emphasis added by me.

Hey, maybe Seth Godin should invest!

Yeah, Seth, put up some money or STFU about books.

Tao Lin’s website

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4 Comments on “Nevermore!”

  1. Yujin Says:

    You need to educate yourself further both on Mr. Lin’s activities, his parents’ (Jui-Teng Lin and Yuchin – a.k.a. Suchin – Lin’s criminal activities regarding stock fraud, and the regulations involving these kinds of offerings that were instituted in the New Deal to protect legitimate investors from just this kind of thing.

    What he’s done is in violation of SEC rules. You can’t offer shares in a nonesxistent corporation to the general public without first going through the admittedly cumbersome process of filing the proper documents and making sure that you make the offer on paper ONLY to “qualified investors.”

    As you will see from going on the Freakonomics blog or Mr. Lin’s own post’s comments, this is a young man whose parents have been called by the SEC “securities fraud recividists” and who fled the country facing an SEC judgment that they disgorge the $1.7 million from the investors they stole from by using lies, money laundering, and outright fraud. Mr. Lin’s father served time in federal prison after being found guilty of fraud by a Brooklyn federal jury in December 2002.

    It would behoove you to do some research before touting a scheme that is risky to investors, possibly totally fraudulent and certainly in violation of current federal securities investigations. It would be dangerous for any other writers to emulate him in this.

    Mr. Lin, as you will see if you check on him, is an admitted shoplifter and vandal who has a long history of having a reputation as a bad actor in the publishing world.

    I am sorry to see that you have apparently fallen for this scam artist’s self-serving scheme.

    A complaint has been filed with the SEC regarding this matter, including in it Melville House, Mr. Lin’s publisher, who has a contract for the novel in question. He, in fact, has gone behind their back to sell shares in his royalties paid for by them. Thus he has subjected them (with the firm’s assumed deeper pockets – if Mr. Lin is this desperate for money, he is obviously judgment-proof) to liability in this matter.

    There might be ways to do this, but Mr. Lin, like his parents, apparently believes rules do not apply to him. Anyone who invests in this is letting themselves in for a complete loss of their funds, and Mr. Lin, as he notes, has absolutely no downside risk at all. Trust him, he says – just what his parents told the investors in their firms whom they bilked of nearly two million dollars.

    At the very least, you should rent the film “The Producers”!

  2. mikecane Says:

    You are absolutely correct on points regarding the issuance of shares in a venture to the general public. I once investigated what it took to form a corporation and the SEC rules regarding public offerings. The question is, however, is it a corporate entity he will be forming? Could he argue that he is looking for angel investors? As to other points you raise regarding allegations of criminal activity, it’s always best to provide URLs to back up such statements. Until that happens, what you are doing is classified in courts of law as hearsay.

  3. ericb Says:

    The question is, however, is it a corporate entity he will be forming?

    From Tao Lin’s statement/offer: You will be a stockholder in “Tao Lin’s Second Novel’s U.S. Royalties Corporation.”


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