On Japan’s newest exchange, fame can pay off, but that might not be so great for investors.
Last month, Hikaru — a Japanese YouTube star so famous he can go by a single stage name — listed himself on Valu, a platform for people to raise money by essentially selling shares in themselves.
Unlike many crowdsourcing sites, which are platforms for people or businesses to raise money online from large groups of individuals, the exchange also allows the trading of those who list their “Valus” on the exchange.
That means prices can rise and fall, and rise and fall Hikaru did.
Soon after listing, Hikaru, whose YouTube channel has 2.6 million subscribers, soared on the market as his fans dived in.
Just a week after going public, Hikaru and two friends, who go by the names Ikkun and Raphael, cashed out, exchange officials said.
That made his Valu drop precipitously, prompting howls of outrage on the Internet.
“I was a fan of Hikaru so I bought his Valu partly to support him and this is what happened,” a person calling themselves Hikaru Valu Victim said on Twitter. “I want my money back.”
Hikaru said in a video that he and his friends had been competing to make the most money off the exchange.
Many people listing on the exchange often cite altruistic aims for doing so — like one person raising funds for a project to encourage young people to move to rural Japan — but Hikaru has said that he listed just to get attention.
He apologized for the move that might have ended his career, but added that his actions did not constitute wrongdoing under the rules of the exchange, which only say that members should not post untrue or deceptive information.
There is also nothing illegal about driving up Valus and cashing in, since they are not considered a financial product by the Japanese Financial Services Agency.
An official from the watchdog said it had been watching the Valu exchange, but would only advise it to inform investors that listings did not require financial disclosure.
Since the Hikaru debacle, Valu has added restrictions on the frequency of trading to prevent similar occurrences.
Hikaru and his two fellow YouTubers did not respond to requests for comment.
VAZ Inc, a company that represents Japanese YouTubers, including Hikaru and his two friends, said the star and friends made a total profit of about ¥50 million (US$446,461) in bitcoin, the currency of the exchange.
He bought back an unspecified number of Valus in an effort to make amends, he said on Twitter, which VAZ and the exchange confirmed, but his Valus never recovered their highs.
His shares, which hit a peak of 0.09 bitcoin (US$330), before he sold out, tanked to as low as 0.0075 bitcoin. They last stood at 0.014 bitcoin on Friday.
The exchange declined to comment on the amount his supporters lost.
The incident was a rude awakening for Valu, which was launched this summer and has so far attracted about 60,000 members. Fundraisers sell Valus to the members, who are free to buy and sell their stakes.
Valu’s operator, a subsidiary of a company called Party Co, makes clear in its rules that listings have no intrinsic value.
There are also no requirements for reporting results or any other information. There are no voting rights or dividends.
That means the sole basis for rising shares is speculation.
“What Valus represent is a big question,” NLI Research Institute researcher Makoto Sakuma said. “Despite their name, Valus have little economic fundamental value.”
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