The self-titled “King of Instagram”, Dan Bilzerian, now also appears to be the “King of Lighting Cash On Fire”.
That’s because Bilzerian’s new pot company, Ignite International, looks like it’s about to go up in smoke. The company torched $50 million in cash last year after raising $19.9 million in convertible debt and $23.7 million from a short term promissory note.
If the company winds up surviving, it may have to enter a toxic financing spiral that could decimate the company’s shareholders further than they already have been.
The company sells all types of weed-related products and has been promoted heavily on Bilzerian’s Instagram account, where he has over 31 million followers and frequently posts photos of himself with models in exotic locations.
Of the $50 million burned last year, $43 million was for expenses related to marketing and promotion, according to the NY Post. Much of that shareholder cash was spent throwing booze fueled parties at various global destinations with barely-dressed women.
Nearly all of Bilzerian’s photographs on his Instagram portray a playboy-like lifestyle for the CEO. In fact, the company’s annual marketing budget was more than double its annual sales revenue.
The company’s shareholders appear to be footing the bill for Bilzerian’s personal lifestyle – not only paying for his lavish parties but also paying him a salary in the process.
Bilzerian was also said to have lost out on a book deal last month because he was “too busy partying” to deliver the manuscript that was required by his publisher, Simon & Schuster.
His company, meanwhile, sells everything from vodka to THC vape pens to CBD oils. It began trading publicly in Canada in January 2019 and trades under BLIZF on the US OTC markets.
Its stock is down more than 70% over the last year and trades at just $0.66 in the US. Its 52-week high was $4.
It’s a shame no one ever told Bilzerian that if you run an unprofitable company, some fancy A/R accounting and short dated out of the money call options can work wonders. Maybe he could turn his loss generating machine into the largest company in the world.
But until he learns those “secrets” of being a public company, he’ll have to continue sticking it to his shareholders the old fashioned way: siphoning money out of the company while diluting retail bagholders whose “due diligence” is poring through Bilzerian’s Instagram photos.