No matter where you are on the entertainment consumption spectrum — streaming or old school — we all love the experience of watching a compelling film. However, the entertainment industry is dominated by an aristocratic elite. Enter Legion M, which promises to change the paradigm entirely. Billed as the world’s first fan-owned entertainment company, when you invest in Legion M stock, you’re essentially in the producer’s chair.
As Legion M’s management team points out in its pitch deck on the Wefunder equity crowdfunding platform — with a $100 minimum investment — when was the last time Disney (NYSE:DIS) asked its fans what they wanted in their next movie? Not only is the answer “never,” but media tycoons simply don’t care. You get what you get — including potentially divisive films — and you better like it!
Fortunately, Legion M has a far more productive and visionary concept. Rather than let stiff, potentially tone-deaf Hollywood executives make all the decisions, the fans (who are the shareholders) have their say. This simple concept, which previously wasn’t possible until the advent of equity crowdfunding, has people clamoring to invest in Legion M stock.
First, by giving fans a voice in the production process of a film, Legion M is ensuring greater success of its releases. After all, what’s the point of dumping money into a project if moviegoers don’t want to see it?
Second, with management allowing everyday fans to invest in Legion M stock, moviegoers represent an active, built-in audience. Not only will they be among the first to watch the target film on opening night, they’re incentivized to bring their family and friends.
Plus, it’s great fun — more so than any other investment.
Invest in Legion M Stock and Get a Piece of Hollywood
The last point above is a concept that in my opinion is underappreciated. Consider your average investment portfolio: you may have a diverse collection of technology, healthcare, industrial and services-related names. But how interested are you in mentioning their underlying businesses to your peers?
Chances are, you’ve selected those companies for growth, fiscal stability or some combination of the two. But when you invest in Legion M stock, you’re partnering with a business model levered to a universally attractive platform.
If, for instance, Disney or Comcast (NASDAQ:CMCSA) gave its stakeholders a voice in their next film or franchise, how much more motivated would that investor base be? Additionally, you’d imagine that such an open invite would attract more investor capital.
Better yet, Legion M has significant credibility. For starters, its projects include well-known Hollywood stars, including Kevin Smith, Nicolas Cage, Anne Hathaway, Dean Devlin, the late Stan Lee and many more. Further, the company’s advisory board features executives from Netflix (NASDAQ:NFLX), Sony (NYSE:SNE), Lucasfilm and other top-notch organizations.
Also, I’d be remiss not to point out that Legion M’s leadership team has enjoyed previous successes in the entertainment industry. According to its Wefunder pitch deck:
“Legion M’s founders previously co-founded MobiTV, a streaming media startup that became a worldwide leader in mobile television with $150 MM in venture capital, ~$100MM in annual revenue, and an Emmy Award for Innovation in Television.”
Finally, the stats prove that people are genuinely seeking to invest in Legion M stock. Again, from the Wefunder investor presentation:
- At the end of 2016, Legion M had 3,200 shareholders
- By 2017-end, it had 6,600 shareholders
- One year later, the count grew to 11,000 shareholders
- Last year, the shareholder count jumped to 24,000
Clearly, momentum is incredibly strong.
Going Hollywood has its Risks
Before you jump on the Legion M bandwagon, be aware that private investing opportunities carry risks — yes, even those levered to Tinseltown. Primarily, equity crowdfunding involves putting your money into an early stage project. Therefore, you can easily see your principal evaporate because most startups fail. Plus, because these shares are not very liquid, you’re basically stuck with them until the company goes public or gets bought out.
But I have to hand it to Legion M. Unlike so many other private investing offers, this company doesn’t hold back any punches about the potential nor the risks. Yes, it’s intending to go big by eventually securing an initial public offering. But the road to get there is rocky and not guaranteed.
As well, the pink gorilla in the room is the novel coronavirus. Legion M has a blog post where it discusses the impact of the pandemic. To give an incredibly brief summary, fortuitous timing prevented significant nearer-term damage. However, the longer term is largely an unknown. So, think carefully before you decide to invest in Legion M stock.
For me, the biggest risk in this equity crowdfunding offer is the threat of a prolonged recession. According to common thinking, movies are recession-proof. I think there’s much truth to this because films, particularly the box office environment, provides cheap escapism. As you can tell from soaring recreational vehicle sales, Americans need their escapism, pandemic be damned!
However, the worry is that this Covid-19-fueled recession could be much different, where people just don’t have the funds to spend on any entertainment. It’s important to realize that pre-pandemic, economists worried about a possible recession, stemming from events like the U.S.-China trade war.
Certainly, the situation is much more severe today.
Innovation Where it’s Sorely Needed
Although the concerns of viability are legitimate, I’m ultimately encouraged by management’s confidence in Legion M. The team laid bare both the pros and the cons. To me, that communicates confidence that when prospective investors consider everything, the rewards outweigh the risks.
If you want to invest in Legion M stock, head on over to its profile on Wefunder.com. The minimum investment is $100. However, you get increasingly more valuable perks the larger your investment, such as premiere tickets. The pre-money valuation is $32.4 million-$40.5 million.
A former senior business analyst for Sony Electronics, Josh Enomoto has helped broker major contracts with Fortune Global 500 companies. Over the past several years, he has delivered unique, critical insights for the investment markets, as well as various other industries including legal, construction management, and healthcare. As of this writing, he is long SNE.