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Here are just a few good arguments brought up about this developing company. The reason for bringing this up is that they just came out with their "viewbar" and I'd rather let you know before wasting your time.
Agloco is a pay to surf MLM scheme that exploded onto the interwebs late last year. It is backed by the same team as AllAdvantage which crashed and burned in the bubble years. Check out this article from Business 2.0 on AllAdvantage (pdf).
AllAdvantage had a simple proposition: pay people a fixed hourly rate for the hours they spent browsing the internet with their software and use an MLM structure to attract new users. As youâd expect, this lead to legions of bots that pretended to surf. In contrast, Agloco uses a tortuously roundabout path to go from surfing to actual payment of money.
Still, most people mistakenly see Agloco as having a simple, linear model. Consider the following a public service announcement. If youâre a shrewd trader or investor or ever sat through an economics class (awake) you have no need to read further.
For the rest, letâs break it down:
[1] First, you have to download and install Aglocoâs viewbar. This software (vaporware?) has yet to be released and every time a date is given, it makes a nice whooshing sound as it passes by. For the sake of this analysis, letâs assume it is actually released.
[2]So you surf the web while running the viewbar. But you donât get a one-to-one proportionate credit for the actual hours you spend online. No matter how much longer you spend online, youâll only get five measly hours accrued a month. And they âreserves the right to change these rates at any time for any countryâ.
[3]Next, these âAgloco hour unitsâ will accumulate. At some point, who-knows-when (if ever) they will be converted to something else. Note that they âreserves the right to change the [conversion] rates at any timeâ. So you can find yourself on shifting ground and get much less than what you thought youâd get.
Now, hereâs the knee slapper: Agloco will convert these âhour unitsâ not into cash but into shares. But Agloco is a private company in start-up mode; has no public shares to distribute; is not profitable; hasnât even released a product; and its founders failed the first time they tried this venture (what they lack in creativity, I suppose, they make up in persistence). Furthermore, according to SEC regulations, Agloco can not distribute unregistered shares to the public. While the ability of Agloco to produce and distribute value hinges on being able to going public, itâs ironic that the least amount of attention has been paid to this point.
From Aglocoâs website:
âRemember, the company is 100% owned by the Membersâ¦â
No, it is not. It is a private company owned by a very few. I can cut them some slack for aggressive promotional copy but this is a bald faced lie.
[4]Assuming it does actually go public (I would really like to see an investment banker sit through a meeting with a straight face) Agloco will then have to use its shares as currency to pay its members â that was the original point, before all these twisty turns, remember? When it begins to do so, the proverbial shit will hit the fan.
If we assume Agloco is successful, they will have to regularly pay their considerable and probably growing user base a massive amount of money. Which means selling a massive amount of shares on the market. Guess what will happen to the value of the shares when this unflagging selling takes place? Guess what will happen before the selling hits as smart traders position themselves ahead of the avalanche of sell orders?
[5]But wait, maybe Iâm being too harsh here. Let us again give them the benefit of the doubt. Letâs assume that people donât make a mad dash to cash in their shares⦠eventhough theyâve been slaving over a hot monitor for months. The next hurdle to the âmembersâ seeing money is for the firm to become profitable.
[6]The chances of this are very slim for obvious reasons. Even if they do become profitable, the founders will rightfully want to get a return on their risk capital before paying anyone else. Again, letâs assume not only that Agloco becomes profitable but that their board declares a cash dividend (as opposed to a sneaky stock dividend).
[7]Now here is the payoff that the âmembersâ had been waiting for. Assuming all the above, we finally get to the single mention of cash payment to users in Aglocoâs website:
âAs Agloco grows and the company generates positive cash flow, we will be distributing the excess cash to Members and shareholders of the company.â
At this improbable point, having jumped through hoop after hoop and assumed everything but the kitchen sink, the members are getting paid a pittance: dividend âcentsâ on any âdollarâ shares owned. And that is assuming that in Aglocoâs glorious ascent, hackers the world over havenât unleashed massive âbotsâ to mimic surfing and made it a victim of its own âsuccessâ. Or that the SEC hasnât nabbed the founders on charges of attempting to circumvent securities law by promising the public unregistered securities in return for membership.
If you are more jaded than I am, you may point out that at each node through this circuitous path, Agloco has built in several mechanisms to control the amount of âvalueâ they distribute â whether limits on hours, conversion rates of shares or cash, reserving the right to kick anyone out for any reason, etc. These built in âfirewallsâ are there for the protection of the founders and the business but they can also be used quite easily to manipulate the user base to extract the most from them while reciprocating a minimum.
Having said all that, I donât think Aglocoâs a scam. It is a poorly conceived scheme that appeals to those who know very little about finance, share issuance and regulation. I really do wish Agloco would go public. How else would I get a chance to short it?
Iâve been DUGG! If you would like to make this information available to more people, follow this link to digg me up.
UPDATE: If you enjoyed this, then donât miss: the beginning of the end for Agloco.
Related Link: Credit Card Processing Get a business merchant account today and you can be accepting credit cards for your physical or online business business in minutes.
Agloco is a pay to surf MLM scheme that exploded onto the interwebs late last year. It is backed by the same team as AllAdvantage which crashed and burned in the bubble years. Check out this article from Business 2.0 on AllAdvantage (pdf).
AllAdvantage had a simple proposition: pay people a fixed hourly rate for the hours they spent browsing the internet with their software and use an MLM structure to attract new users. As youâd expect, this lead to legions of bots that pretended to surf. In contrast, Agloco uses a tortuously roundabout path to go from surfing to actual payment of money.
Still, most people mistakenly see Agloco as having a simple, linear model. Consider the following a public service announcement. If youâre a shrewd trader or investor or ever sat through an economics class (awake) you have no need to read further.
For the rest, letâs break it down:
[1] First, you have to download and install Aglocoâs viewbar. This software (vaporware?) has yet to be released and every time a date is given, it makes a nice whooshing sound as it passes by. For the sake of this analysis, letâs assume it is actually released.
[2]So you surf the web while running the viewbar. But you donât get a one-to-one proportionate credit for the actual hours you spend online. No matter how much longer you spend online, youâll only get five measly hours accrued a month. And they âreserves the right to change these rates at any time for any countryâ.
[3]Next, these âAgloco hour unitsâ will accumulate. At some point, who-knows-when (if ever) they will be converted to something else. Note that they âreserves the right to change the [conversion] rates at any timeâ. So you can find yourself on shifting ground and get much less than what you thought youâd get.
Now, hereâs the knee slapper: Agloco will convert these âhour unitsâ not into cash but into shares. But Agloco is a private company in start-up mode; has no public shares to distribute; is not profitable; hasnât even released a product; and its founders failed the first time they tried this venture (what they lack in creativity, I suppose, they make up in persistence). Furthermore, according to SEC regulations, Agloco can not distribute unregistered shares to the public. While the ability of Agloco to produce and distribute value hinges on being able to going public, itâs ironic that the least amount of attention has been paid to this point.
From Aglocoâs website:
âRemember, the company is 100% owned by the Membersâ¦â
No, it is not. It is a private company owned by a very few. I can cut them some slack for aggressive promotional copy but this is a bald faced lie.
[4]Assuming it does actually go public (I would really like to see an investment banker sit through a meeting with a straight face) Agloco will then have to use its shares as currency to pay its members â that was the original point, before all these twisty turns, remember? When it begins to do so, the proverbial shit will hit the fan.
If we assume Agloco is successful, they will have to regularly pay their considerable and probably growing user base a massive amount of money. Which means selling a massive amount of shares on the market. Guess what will happen to the value of the shares when this unflagging selling takes place? Guess what will happen before the selling hits as smart traders position themselves ahead of the avalanche of sell orders?
[5]But wait, maybe Iâm being too harsh here. Let us again give them the benefit of the doubt. Letâs assume that people donât make a mad dash to cash in their shares⦠eventhough theyâve been slaving over a hot monitor for months. The next hurdle to the âmembersâ seeing money is for the firm to become profitable.
[6]The chances of this are very slim for obvious reasons. Even if they do become profitable, the founders will rightfully want to get a return on their risk capital before paying anyone else. Again, letâs assume not only that Agloco becomes profitable but that their board declares a cash dividend (as opposed to a sneaky stock dividend).
[7]Now here is the payoff that the âmembersâ had been waiting for. Assuming all the above, we finally get to the single mention of cash payment to users in Aglocoâs website:
âAs Agloco grows and the company generates positive cash flow, we will be distributing the excess cash to Members and shareholders of the company.â
At this improbable point, having jumped through hoop after hoop and assumed everything but the kitchen sink, the members are getting paid a pittance: dividend âcentsâ on any âdollarâ shares owned. And that is assuming that in Aglocoâs glorious ascent, hackers the world over havenât unleashed massive âbotsâ to mimic surfing and made it a victim of its own âsuccessâ. Or that the SEC hasnât nabbed the founders on charges of attempting to circumvent securities law by promising the public unregistered securities in return for membership.
If you are more jaded than I am, you may point out that at each node through this circuitous path, Agloco has built in several mechanisms to control the amount of âvalueâ they distribute â whether limits on hours, conversion rates of shares or cash, reserving the right to kick anyone out for any reason, etc. These built in âfirewallsâ are there for the protection of the founders and the business but they can also be used quite easily to manipulate the user base to extract the most from them while reciprocating a minimum.
Having said all that, I donât think Aglocoâs a scam. It is a poorly conceived scheme that appeals to those who know very little about finance, share issuance and regulation. I really do wish Agloco would go public. How else would I get a chance to short it?
Iâve been DUGG! If you would like to make this information available to more people, follow this link to digg me up.
UPDATE: If you enjoyed this, then donât miss: the beginning of the end for Agloco.
Related Link: Credit Card Processing Get a business merchant account today and you can be accepting credit cards for your physical or online business business in minutes.
