Lest you think the failure of the auction rate securities market was just rattling Wall Street and Main Street, Techcrunch posted an article about how it has impacted Silicon Valley. Apparantly, many start-ups stashed their venture capital dollars in ARS and now can't get the money out. Depending on what type of ARS they used, they may have to wait (and receive a tidy return in the process) a few weeks for the money to become liquid, or, they may have to wait a few years.

 

Submitted: Mar 11, 2008    Views: 337    Comments: 2    Likes: 1   


View Article: http://www.techcrunch.com/2008/03/11/20-of-valley-startups-cant-get...


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Comments Received:

Ron Shays

I'd hate to be one of these start-ups. But they'll figure a way out.

Posted: Mar 12, 2008

ESER.org
(Unregistered)

As yet another unfortunate investor in these Auction Rate Securities, I've been befuddled that I can negotiate a price for durable goods on EBay any day-of-the-week, but I can't get my stock broker to find a buyer for my Auction Rate Securities -- no matter what discount I'm willing to sell at.

Every asset -- including illiquid Auction Rate Securities -- has value, it's just a matter of discovering the price.

So, we've created an electronic secondary market at ESER.org for investors to directly buy and sell Auction Rate Securities. The goal is for ESER.org to enable price discovery for illiquid Auction Rate Securities.

It's frustrating that none of the banks that have previously back-stopped the auctions of these securities are willing to step in and redeem the issues from their clients.

We're running ESER.org (Electronic SEcurities Registry) at http://www.eser.org as a public-service: sellers are free to list their Auction Rate Securities for sale; and buyers are free to browse the listings and negotiate pricing and settlement with the sellers.

Hopefully, a vibrant secondary market will allow investors to cash-out of these illiquid Auction Rate Securities.

-ESER.org (Electronic SEcurities Registry): www.eser.org

Posted: Apr 8, 2008



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