The famous pitcher Curt Shilling was trying to get into the fantasy business game by developing a new gaming company called 38 games. The only problem in his plan is that he did not have the investment capital to start his company. He went to a desperate company that was the state of road island, they were in economic ruin and were trying to get themselves out of a hole. They initially gave him a 75 million dollar investment fund to make sure that they would get the jobs from this company and also have a little star power to their investors. Only a year later we see that their business has gone under and also the investors had lost out on their capital. It is sad to see an economy so desperate that they would resort to this to try and stimulate an economy.
http://www.nytimes.com/2013/04/21/business/curt-schilling-rhode-island-and-the-fall-of-38-studios.html?ref=business&_r=0
Usually with investments the higher the risk the higher the reward. I wonder how big this business endeavor could have become had it not gone under.
ReplyDeleteVery interesting article I am curious to see how long and what happens when the State of Rhode Island repays all the bond holders that were involved in this whole debacle. Also, knowing that State governments can't run a deficit could potentially add to the amount of time and interest paid on these bonds will increase exponentially, or if the national government will step in during this time of great deficit spending it is already currently doing.
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