What the Hell Is This Company the 76ers Just Partnered With?

https://defector.com/what-the-hell-is-this-company-the-76ers-just-partnered-with/

361 97 5 years ago

bovermyer• 5 years ago

Well this is certainly a bizarre story. As I'd never heard of Defector, I checked around to see if a more familiar news source had anything about this. AP News has a story about the deal, though it mentions nothing about the questionable existence of Color Star.

This is an interesting mystery that I don't really have the resources to investigate.

djmips• 5 years ago

Maybe it's a sentient AI's first foray into public life.

jameshart2• 5 years ago

Yes, very strong vibes of Daniel Suarez’s Daemon to this story.

ludamad• 5 years ago

It'd be funny if an AI went off the rails, keeping its prime directive to 'make a lot of money'

CPLX• 5 years ago

Defector is one of the most respected and credible news sources in the sports world.

Kye• 5 years ago

Deadspin could have been that, but management decided chasing profits mattered more than reputation, so the reputation left and founded Defector. I don't even like sports, but I listen to their podcast.

jccalhoun2• 5 years ago

Deflector was created by the writers of Deadspin, a sports site owned by gawker, when the new boss of Deadspin told them to stick to writing about sports and not broader issues.

skinnymuch• 5 years ago

You can usually at least try to see any wiki information and about us info for a site or resource. Those are both available for Defector which show it is credible, former employees of Deadspin:

https://defector.com/about-us/ https://en.wikipedia.org/wiki/Defector_Media

You could say it might be even more credible than other places since it is employee owned. A small trend of modern media sites like https://Clickhole.com which was bought from being The Onion subsidiary, both owned by the same new bad parent company as Deadspin. Except for Clickhole I believe Cards Against Humanity bought the site and then let it be employee owned. Even cooler!

trenning• 5 years ago

There was a small discussion about it on reddit but nothing new really, just shady company does shady things, all part of the process.

https://old.reddit.com/r/nba/comments/rn62qy/defector_what_t...

swasheck• 5 years ago

i don’t know if this was intentional but the “process” comment is hilarious given all of its applications within the 76ers organization

jkestner• 5 years ago

This is an until-now undiscovered step in Hinkie's plan. You thought you had to Trust the Process before.

devonallie• 5 years ago

This story sets off my scam alarms. It also reminds me of the time that Samsung partnered with a group pretending to be Supreme.

Aperocky• 5 years ago

metaverse and NFT

The alarm couldn't have been louder.

millzlane• 5 years ago

For me it was the amazon listings on their app in the video. You can see the "Dickie Roberts child star" movie poster. That's been popular on Amazon prime for the last couple months.

SirSourdough• 5 years ago

It should probably set off anyone’s scam alarms. Even if it’s something legitimate it’s still incredibly shady in its current incarnation.

At least the Supreme thing uses an established brand to carry some legitimacy. It’s pretty hard to see what these people could have showed the 76ers to convince them this was a worthwhile partner.

wwilim• 5 years ago

Looks like a perfect dream team of Chinese scammers and American business bullshitters

JumpCrisscross3• 5 years ago

Best case: the 76ers franchise team is incompetent. Worst: they have an embezzlement and/or money laundering scheme embedded in it.

Might pick up e.g. $100 of shares and start filing shareholder inquiries on Monday, for shits and giggles. Would suggest the authors of this article submit it to the SEC [1].

[1] https://www.sec.gov/tcr

waffle_maniac• 5 years ago

Don't you mean short it?

dylan6044• 5 years ago

Are you a shareholder when you short it? Can a non-shareholder make shareholder inquiries?

andruby• 5 years ago

He wants to become a shareholder so he can ask questions to the board.

Shareholders have additional rights.

shostack• 5 years ago

What's the laundering angle?

tclancy• 5 years ago

Trust The Process.

tyingq• 5 years ago

Interesting that it is almost certainly some kind of scam, yet they chose not to stay low key. Rather, they went with press releases, contract signing events, etc.

Maybe just a purposefully faked PR buzz "let's go viral" thing?

Edit: Ahh, so "pump and dump" seems to be the prevailing guess.

JumpCrisscross3• 5 years ago

it almost certainly some kind of scam

They tried to privately place $10mm in November [1], though that was terminated a week later [2]. They announced a new auditor a few days later [3][4] who doesn’t appear to have been auditing any U.S. public companies prior to this July [5].

They’re also selling $20mm of shares as of September [6] via an Atlanta-based broker-dealer who appears to do these for Chinese penny stocks for 7 to 8% fees [7]. (Searching the firm on LinkedIn brings up D.C.-based general counsel [8], a guy in Miami Beach and a dude in Ghana.) All this suggests a pump and dump with possible laundering connections.

[1] https://www.sec.gov/Archives/edgar/data/0001747661/000121390...

[2] https://www.sec.gov/Archives/edgar/data/0001747661/000121390...

[3] https://pcaobus.org/resources/auditorsearch/issuers/?issueri...

[4] https://www.allianceaudit.com/

[5] https://pcaobus.org/resources/auditorsearch/firms/?sort=olde...

[6] https://www.sec.gov/Archives/edgar/data/0001747661/000121390...

[7] https://www.sec.gov/Archives/edgar/data/793628/0001553350210...

[8] https://www.linkedin.com/in/alecorudjev

jameshart2• 5 years ago

Pump and dump? Trying to become a memestock?

rexreed2• 5 years ago

They needed something high profile to boost their stock and rope in more investors.

awb3• 5 years ago

What’s crazy is that for $10-15k you can have a really professional looking website, instead it looks like they dropped about $2-5k for a half-built, broken looking one.

ren_engineer• 5 years ago

you can buy a Wordpress template and have some intern spend a few hours changing the text and have a professional looking website

ur-whale• 5 years ago

https://archive.ph/wVtJO

thebigjewbowski• 5 years ago

As a clueless shareholder in CSCW I was pretty shocked and amused by this.

Awhile back (2/24) I bought $200 each of several bio/Pharma/blockchain penny stocks based on little to no research

So I had 200 shares of ColorStar at $1.02, sold 180 of them between $1.35 and $2.17, and now have 20 left at the current price of $0.535.

jccalhoun2• 5 years ago

Someone at color star has an uncle or dad who works in the 76ers office.

rexreed2• 5 years ago

Nice. More random unprovable FUD. Fake it till you make it eh? Laughing all the way to the bank.

mym1990• 5 years ago

This sounds somewhat like the Rich Energy sponsorships in Formula 1(Haas team I believe) a few seasons ago. Maybe this is all an inside joke, but hopefully the incompetence of someone within the 76ers org is recognized and addressed.

rozap2• 5 years ago

And that ended so well for everyone involved. Grab the popcorn.

Avicebron• 5 years ago

slight tangent but this I listened to someone describe a meeting with capetian (before the 76's he was trying to get involved with FaZe clan for similar nft (casinos i think) projects. I can't find the video, but he came across as very sketch.

mijoharas2• 5 years ago

Could you expand on what happened?

IG_Semmelweiss• 5 years ago

Fantastic article.

Would like to commend the article's author, for going deep in the rabbit hole while also keeping it light and entertaining for the reader.

Kudos

awb3• 5 years ago

Amazing article and great persistence and research. Can’t wait to hear how it ends.

My only gripe is the writing style, which I’ve started seeing on major news sources that reads more like stream of consciousness or friend to friend rather than reporter to reader:

Whew. It’s been quite a journey, but here we are at last at the real jumping-off point of this flooring company’s long transformation into a, ah, metaverse.

Take out the “Whews” and the “ahs”, etc., and it’s a really well written piece IMO.

pkilgore• 5 years ago

To be fair, this is not the New York Times. It is a blog where the above-the-fold post today is "What did we get stuck in our rectums this year?"

ChrisMarshallNY• 5 years ago

That's how The Register[0] rolls. I really enjoy their style. They are also very sharp geeks.

[0] https://theregister.co.uk

Talanes2• 5 years ago

If you literally just took out the "whews" and "ahs" from that sentence, you would completely change the meaning by removing the intended level of skepticism.

bilalq2• 5 years ago

Yeah, I was really blown away by it. This is an amazing example of quality journalism. Not only was the investigative work impressively thorough, but the quality of the writing and tone came together to make this one of the most compelling things I've read in a long time.

The story itself is absolutely wild.

adnmcq999• 5 years ago

I think it’s satire and not a scam

detaro• 5 years ago

Who exactly is doing the satirizing here?

jimsparkman• 5 years ago

Fantastic article. Searching the stock ticker (CSCW) on Reddit turned up some humorous old posts about how this penny stock is about to take off.

api• 5 years ago

There are people who make a nice living just pumping fake companies over and over in the penny stock market or to D-list VCs. These are the white collar equivalent of what cops call “greasy crimes,” crimes not quite serious enough to get real attention. (The dumb street crime epidemic in California is a result of further dialing back enforcement of “greasy crimes.”)

I’m sure those types are all over this NFT craze.

“I see that there are dumb people with money. I have a solution to that…”

I feel like a total sucker sometimes for attempting to do useful work when if I’d put the same effort into cheating people I’d be rich now several times over. This is truly a new golden age of the con artist. I mean we just had one for president.

I bet con artistry flourishes during any time of rapid change, confusion, and upheaval. Nobody knows what is happening so it’s easy to sell empty boxes with charisma.

bratwurst3000• 5 years ago

Thats true it is an amazing time for con artist and i had never think about it as a consequenz of rapid change

pessimizer2• 5 years ago

I think its more that con artistry flourishes when interest rates are in the toilet.

lawkwok2• 5 years ago

I started following the crazy penny stock craze in 2020 and this story is a common sight.

Some reddit, Stocktwits, or other stock analysis site have people monitoring obscure tickers looking for anomalous volume spikes. You’re lucky if the company has more than a low quality logo as the entire website. Sometimes there’s minimal contact info, which people use to connect the company to potential real people on LinkedIn. Maybe you’ll even find the company registered in Delaware and keep digging through financial documents.

The companies are almost always random, profitless entities owned by one person acting as a a custodian for the billions of shares in the float. They promise to clean up the finances and submit paperwork so the ticker can move up through the various OTC exchange hoping to appear more credible.

The stock analysis websites are really sad because you’ll see people hoping to get rich believe anything they read. Some “shill” will say they heard from a little birdie that the company is going to merge with another stock soon, or financial documents are about to be released, or the CEO is planning to retire millions of shares (out of several billion, mind you). Of course, nothing happens and people are left bag holding for years until the next pump, or until the stock effectively goes to zero.

sydthrowaway• 5 years ago

What if you timed it perfectly and sold at the top?

cyral• 5 years ago

Bonus point if their “source” is some blogspam website that looks credible to your average penny stock inventor but will actually post whatever content you want if you send them $50.

CyberShadow• 5 years ago

"The 76ers" is the name of a professional basketball team in the United States. (Not related to System76.)

jakear• 5 years ago

Though the origin of both names is indeed the same: https://blog.system76.com/post/622541723365769216/the-meanin...

Thus proving 76 is not the smallest uninteresting natural number.

Riverheart• 5 years ago

Thank you good sir

tester756• 5 years ago

the sad part of this article is that

if you aren't on the internet, then you don't exist, lol.

hnburnsy2• 5 years ago

The Phoenix Sun's partnered with an obscure environmental start up named Footprint, even renamed the arena, the Footprint Center. I wonder if it is a money laundering scheme or maybe the Sun's traded naming rights and promotion for equity.

hugey010• 5 years ago

My first guess would be for some large environmental tax write-off.

kevinmchugh• 5 years ago

For many years, one of the biggest sponsors in MMA was a small, niche, industrial product. It was cheap and made the owner of the brand happy, so bought the ads. Arena naming rights probably aren't cheap, but at a small company there might not be many people who have to weigh in on the decision.

https://mmajunkie.usatoday.com/2014/01/so-what-is-a-dynamic-...

ipaddr• 5 years ago

The city owns the arena. The company employees 800 people in the state. They aim to reduce single plastic usage. The former naming rights were for an indian gaming casino. The two people who founded the company are former intel execs.

This is mostly city politics with some money coming back 9 million a year). The city gets some money, some progressive branding to be used during elections, support for local jobs and probably has some personal connections attached.

hnburnsy2• 5 years ago

Pretty sure that the Suns own the among rights, not the city. Is Footprint really paying $90 million cash to the Suns as the deal is reportedly valued at?

kolanos• 5 years ago

This is reminiscent of a sub shop making $35K/yr that was publicly traded and valued at around $100MM. Turned out to be a Chinese shell company. [0]

[0] https://www.cnbc.com/2021/04/15/theres-a-single-new-jersey-d...

bilalq2• 5 years ago

This is even crazier though. That was an OTC stock. This is traded on the NASDAQ and has SEC filing obligations.

lawkwok2• 5 years ago

I remember that story, although the article doesn’t mention any Chinese shell company?

vitus• 5 years ago

CNBC followup the next day:

https://www.cnbc.com/2021/04/16/lawyer-hometown-internationa...

In a 2015 letter to Hometown International, SEC staff wrote, “We believe you are a shell company.”

btrautsc• 5 years ago

What is most incredible is somehow Daryl Morey is involved with this.

AtlasBarfed• 5 years ago

Shades of Michael Paloma and his New York Blues, featuring Richard Grieco!

There are some strange "partnerships" that happen with local sports teams, who will literally take any money for any reason from anyone.

rsanek• 5 years ago

That intro video has ripped a section of Google's project starline clip -- https://youtu.be/Q13CishCKXY

darcys22• 5 years ago

Everyone in this thread is crying scam because HN hates crypto. However the NBA teams and players love NFTs.

https://hypebeast.com/2021/12/steph-curry-breaks-all-time-nb...

https://www.nba.com/heat/nft

https://nbatopshot.com/

The less interesting reason is that the 76ers are doing NFTs and they have engaged a team to assist with this.

dustintrex• 5 years ago

NFTs are the least sketchy part of whatever is happening here, and that's saying something.

pessimizer2• 5 years ago

This company's CEO might be an NFT.

Animats• 5 years ago

From the article: "metaverse and NFT products?"

They actually filed a prospectus with the SEC in September 2021.[1]

Nothing there mentions a basketball team, or "metaverse". This company started as a cement maker in China, pivoted through floor tiles, then after-school education, and now online education and concerts.

There's a recent financial statement.[2] Finally, there's a business model:

"The curriculum development created by us includes music, sports, animation, painting and calligraphy, film and television, life skills, etc., covering plenty of aspects of entertainment, sports and culture. At present, we have signed contracts with well-known international artists and more than 50 celebrity teachers have been launched.

The Color World platform generates revenue primarily through paid membership subscriptions priced at $9.90 per user per month. Members can access most video courses on the platform for free and will be charged the tuition fee of $30/hour for taking classes of tier 1 artists and $15/hour for learning from Tier 2 artists. First three months of launch costs only $1.5/hour to attract downloads and there have been over 500,000 registered users as of the date of this report.

So it's a monetization platform for minor celebrities.

The financial statement has a balance sheet. They're losing money, and they're not very big.

[1] https://www.sec.gov/Archives/edgar/data/0001747661/000121390...

[2] https://www.sec.gov/ix?doc=/Archives/edgar/data/0001747661/0...

chrischen• 5 years ago

Honestly sounds like a struggling small business going through pivots and ended up paying for some partnership with a big brand.

rahimiali• 5 years ago

The pattern appears to follow stock market hypes. First China markets: construction, then child education. And now nft/metaverse, a US hype. Given there is no actual underlying product or business, it looks like a vehicle for pump and dumps.

silexia• 5 years ago

Could be a scam or money laundering scheme for the Chinese government or it's henchmen.

doctorhandshake• 5 years ago

If you’ve ever been curious what William Gibson’s later novels are like, this gets you pretty close.

jalino23• 5 years ago

I was playing around with oculus quest 2 horizon venues and I did notice a lot of 76ers scheduled live events. the first one will be tomorrow.

niceguy21• 5 years ago

I like this Douglas Mennelly guy! The story would have just been another crime mystery if not for his humorous presence.

mikehollinger• 5 years ago

Interesting note - about a year ago[1], the 76ers were pulled into the China / Hong Kong protests, and Tencent stopped broadcasting their games. Any chance this is related in some way?

[1] https://news.ycombinator.com/item?id=25576412

What the Hell Is This Company the 76ers Just Partnered With?

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