I received an interesting email this weekend from Motley Fool marketing – one that says that Motley Fool One is likely expanding into private company investments. Details were very limited but they’re talking about giving Motley Fool One members a chance to invest in pre-IPO companies. Some examples that were referenced were AirBnB, Homeaway, Facebook, and of course Uber.
The email mentions that a current Motley Fool Director, and former Paulson & Co hedge fund COO Putnam Coes, is now running the Motley Fool Investment Management business, and that Motley Fool One will be exploring private investments. The email then hedges (pardon the pun) a little bit and talks about private investments being part of their potential future.
The email came along side an offer for me to extend my Motley Fool One membership for another 3 years (at $13k total, claiming this is a $5k savings over their regular rate). As an enticement for doing that, they were offering the chance to join a call with Tom Gardner and Mr. Coes to learn more about this possible new investment strategy.
I won’t be extending my membership, so I won’t be able to join that call, but it seems to me that if Motley Fool is sending out marketing emails about private investing, it’s likely to happen.
It’s an interesting move for the Motley Fool, and part of their continuing evolution into a full fledged investment advisory firm, with the newsletters that made them famous becoming a smaller part of their business. My guess is that the newsletters will at some point serve mostly as a marketing funnel to pull investors into the Motley Fool universe, and then aggressively upsell them into Motley Fool One members at some point.
With companies staying private for longer than they historically had, private investing is no longer a matter of just investing in tiny start-ups with great ideas. However, it’s still a much different game than investing in public companies, and I’m not sure this is in the Motley Fool’s circle of expertise. They’ve tended to stumble quite a bit when expanding outside of their bread and butter, long term buy and hold, US-centric investing strategies (witness the recent demise of their Special Ops and Deep Value services). The beginnings of their Wealth Management business was also a series of technical and procedural missteps.
So I’m not overly optimistic about this new strategy either. At the very least, I’d sit this one out for the first couple rounds, see how they develop this new strategy, and maybe reevaluate a couple years down the road.
What about you? Does private investing by the Motley Fool sound like a good idea to you?