Trading shares of stock is a new trend gaining popularity in the investment and securities arena. Typically companies will sell 144 restricted stock for Trade Dollars which is a form of currency recognized by the IRS. They can then use the Trade Dollars to offset cash marketing costs with trade thus marketing the stock and advertising the company to gain name recognition and market share.
Other cash expenses that can be offset with trade purchases include design of company logos and collateral materials, printing of annual reports, 10Ks and 10Qs, legal services, Internet site design and a host of other services typically needed to launch an IPO or remain compliant.
Pre-IPO companies can also use stock sales to build a Trade Dollar reserve which may be used as assets. Or, Trade Dollars can be used to purchase other hard assets such as real estate. Companies should always do their due diligence by discussing these concepts with their advisor or accountant to determine their feasibility.
An added benefit to companies that sell stock for Trade Dollars is the accrual of new investors who talk about their investment to friends, family and associates who can become potential cash investors thus creating demand for the stock and trading activity.
Since Trade Dollars come from excess capacity or from additional new business and have a low incremental cash cost, many investors can be more aggressive and take chances in investing in new companies.
Because trade exchange members can earn Trade Dollars without significantly affecting cash flow, investors can buy speculative stocks and wait for share values to go up. Once the restriction expires, it’s possible to turn trade investments into cash.Add to Favorites