Dan Bilzerian’s latest business venture is turning out to be an expensive hobby. The King of Instagram has reportedly seen his new lifestyle company dump $50 million in a single year.
Insolvency
Ignite was set up to use Bilzerian’s image to sell anything and everything party related including cannabis and alcohol. Investors queued up to bankroll the venture assuming that they couldn’t possibly lose given the playboy’s social media following.
On paper it looked like a dream investment, but what they didn’t consider enough was Bilzerian’s lack of business acumen and clear propensity to use company funds as his personal piggy bank.
When Ignite posted the annual report on the Canadian Stock Exchange there must have been a few raised eyebrows. How on earth could they have lost so much in a single year after floating as a publicly traded company.
Forbes Magazine covered the story and dug a little deeper. What they found was quite shocking.
Ignite “made” money in two ways last year. The company issued and sold shares of its company stock, and the company also raised money via debt.
As per its annual filing, Ignite recorded $25 million from “proceeds of issuance of shares,” $19.9 million from “convertible debt,” and $23.7 million from a “short-term promissory note.”
Bilzerian looks to have been spending other people’s money like a drunken sailor with little regard for how useful the purchases were.
The stock price was tanking and yet the spending continued.
The marketing costs were more than double what was recouped in sales. The same situation with basic admin costs.
Forbes continued:
“Ignite cash went to pay salaries, licensing fees, business expenses, and travel expenses for companies 'owned by the CEO,' according to the report.”
Bilzerian reportedly used company funds to bankroll his lavish lifestyle, branding it as a “marketing expense.” It’s hardly shocking. The self-proclaimed poker millionaire has long claimed his wealth came from high-stakes games, but many believe the real source is a trust fund established by his father to conceal questionable profits.
Paul Bilzerian, a former Wall Street corporate raider, served prison time in the 1980s for multiple financial crimes. By the time authorities caught up with him, his assets had been hidden through a complex web of transactions, making it nearly impossible to trace where all the money went.
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