Originally written on Bob's Blitz  |  Last updated 10/19/14
Gettyimage.ashx_url_http_3a_2f_2fcache.gettyimages.com_2fxc_2f82162002.jpg_3fv_3d1_26c_3dewsasset_26k_3d2_26d_3d17a4ad9fdb9cf1935e9d3d1a6545d2bb8091f4b53d572319
Fantex is the first registered trading platform that lets one buy and sell stock linked to the value and performance of a pro athlete brand. And for the low, low price of just $10 bucks, you can help Fantex raise expected net proceeds from the sale of shares of common stock in their new offering of approximately $10,022,500. Just enough to pay Arian Foster. Felix Salmon explains: The vast majority of the shares in Fantex — 100 million, to be precise — are closely held by its founders and backers. But another 1 million are being sold to chumps at $10 apiece, to raise the $10 million that Fantex is going to pay Arian Foster, who currently plays football for the Houston Texans. The chumps are buying something called a “tracking stock”, the performance of which is supposed to mirror the economic fortunes of the 27-year-old athlete. And maybe it will. Or, maybe it won’t. The directors of Fantex are under no obligation to pass Foster’s earnings on to shareholders in the form of dividends — even assuming that the contract with Foster does indeed do what it’s meant to do, and result in Fantex receiving 20% of Foster’s earnings, more or less in perpetuity. Fantex explains: "Fantex is an all-new marketplace where you can buy and sell shares linked to the value and performance of the brand of an athlete — It's real money, real investments, and a real athlete’s brand. However, because you can only trade Fantex, Inc. tracking stocks on this platform, there is no assurance as to the development or liquidity of any trading market. "The stock available is common stock issued by Fantex, Inc. This tracking stock is linked to the economic performance and value of a brand of a professional athlete – such as income earned from contracts, endorsements and appearance fees." The prospectus warns: "While we intend for our Fantex Series Arian Foster to track the performance of the brand, we cannot provide any guarantee that the series will in fact track the performance of such brand. The board of directors has discretion to reattribute assets, liabilities, revenues, expenses and cash flows without the approval of shareholders of a particular tracking series, which discretion will be exercised in accordance with its fiduciary duties under Delaware law and only where its decisions are in the best interests of the company and the stockholders as a whole." Which Salmon sums up for you nicely: The directors of Fantex can, at their sole discretion and at any time, convert all your Foster shares into common Fantex shares, at any ratio which they determine to be fair. Or, more realistically, they can just go bust: after all, as the prospectus notes, they have no experience in this business. And if they go bust, then the holders of the tracking stock will end up owning about 1% of a bankrupt company, no matter how successful Foster is. In other words, when the directors decide “to reattribute assets, liabilities, revenues, expenses and cash flows”, their duty is to Fantex, the holding company, and not to the chumps with the Foster shares, who between them account for less than 1% of Fantex’s equity. And in general, as the prospectus also says, “any of our tracking series will be subject to the risk associated with an investment in Fantex as a whole”. Online poker is illegal but somehow the NFL is fine with John Elway sitting as a director for Fantex? Perhaps the best nugget comes straight from the prospectus. "Our principal source of cash flows for the foreseeable future will be derived from our brand contracts," is followed closely by, "We do not have any experience managing brand contracts and we do not have any historical performance data about our brand contracts." Stellar. Boomer Esiason wasn't thrilled with Elway's participation either. **Follow us on Twitter, View via Our Mobile Site, or Return HomeFollow us on Twitter. Subscribe or Return to Bob's Blitz.
MORE FROM YARDBARKER

LeBron: Bulls are 'much better' than Cavs right now

Redskins to stick with Colt McCoy over Kirk Cousins

Rick Pitino: Louisville will beat FSU in football

Report: Rams considered favorites to move to LA

Kobe to Julius Randle: You’re an idiot if you (expletive) this up

Slava Voynov arrested on D.V. charge, suspended indefinitely

LIKE WHAT YOU SEE?
GET THE DAILY NEWSLETTER:

Report: Ray Rice could be reinstated within next month

Earl Thomas: Refs need to stay out of it and let us dominate

Browns lament ‘unacceptable’ loss to winless Jaguars

Peyton Manning sets NFL touchdown passing record

Report: CJ Spiller suffers broken collarbone

DeMarco Murray sets record with another 100-yard game

10 NBA players who could be traded by the All-Star break

WATCH: Jimbo Fisher gets annoyed, cuts interview short

WATCH: Les Miles has classic reaction to dumb question

WATCH: Tennessee coach tried to trip Ole Miss player?

News station congratulates Gary Payton for breaking TD record

Did Sidney Crosby troll Flyers fans with Halloween costume?

Why Dan Mullen is not leaving Mississippi State

12 amazing stats from Week 7

World Series preview: Will Giants or Royals win it all?

NFL tweets graphic of recipients of Manning's 509 TD passes

Hockey fights of the week

10 takeaways from NFL Week 7

Texans News
Delivered to your inbox
You'll also receive Yardbarker's daily Top 10, featuring the best sports stories from around the web. Customize your newsletter to get articles on your favorite sports and teams. And the best part? It's free!

Angry Jimbo Fisher cuts off interview

Is Kobe's deal hurting the Lakers?

Tenn. coach tried to trip Ole Miss CB?

GGG continues his reign of terror

The 6 things that mattered this weekend in the premier league

News station congratulates Gary Payton for TD record

Ray Rice could be back by Week 10?

12 amazing stats from Week 7

World Series preview

Favre: I got calls about playing last season

10 takeaways from NFL Week 7

Report: Marshall calls out Jay Cutler

Today's Best Stuff
For Bloggers

Join the Yardbarker Network for more promotion, traffic, and money.

Company Info
Help
What is Yardbarker?

Yardbarker is the largest network of sports blogs and pro athlete blogs on the web. This site is the hub of the Yardbarker Network, where our editors and algorithms curate the best sports content from our network and beyond.