Anat Guetta, Zeev Rothstein (Photo by Inbal Marmari, Flash 90 / Yonatan Zindel, pixabay)
The issuance of the cannabis company epm has taken to the end the invitations to the public to purchase shares in the issue, which obliges the Securities Authority to intervene and stop this strange show. The issue has been suspended for two weeks as part of which the company will amend the prospectus and the Securities Authority will re-examine it.
We will explain in a nutshell what is happening here: epm is engaged in the field of medical cannabis. She enlisted Zeev Rothstein, a well-known and respected medical personality and then embarked on a television campaign inviting the public to purchase shares in an IPO. We will note that the company called on the public to review the prospectus, consult and make informed decisions.
More in-
In practice, using people like Rothstein who can attest to the medicinal properties of the cannabis plant is excellent but going out on a TV campaign to invite the public to take part in the offering using slogans like “If you caught the company that invented the smartphone before the offering” Which were tradable and their shares could be purchased at any point in time, n.c.) could create a situation where people would skip cautious steps and purchase shares in an IPO even though they have no clue in the industry.
Until this morning, the Securities Authority seemed to give up the option to use the tools at its disposal to stop this strange show of all the dangers it poses to those who invest without examining the details of the issue in depth, but it is not and the Securities Authority recovered and stopped the issue.
It should be remembered that orders in a TV campaign to buy shares are forbidden and if there is a loophole then it is very dangerous and the authority did the right thing to close it, just before it becomes impossible to do it with you.
Recall that buying shares in an IPO requires skill in reading financial statements with an emphasis on accounting, legal aspects and so on. An invitation to peruse a prospectus (which holds hundreds of pages) can be kind of a jerk and the public will not do it, will not consult with expert investment advisers and so on and will therefore risk his money without knowing he is risking it at all and that the Securities and Exchange Commission has asked to stop.
Keep in mind, the fact that the Securities and Exchange Commission stopped the offering does not say anything about the adequacy of the company’s reports, its business feasibility or anything else that has an opinion on it but about its very marketing on television using medical anchors like Rothstein and so on.
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