The Bevin administration has used $15 Millions of tax payer dollars on just one very speculative endeavor with Braidy Industries. But where is the tax payer ROI going to come from? As tax payers we actually hold $27.5 Millions in this investment when you include tax incentives, so at least where are the financial warrants against the stock for our investments, Governor? And we want Preferred stock.
We learned recently in this CJ article that CEO Brouchard is planning on taking our $15 millions to build a factory (again, not including an additional $12.5 million in tax incentives from the tax payers), and then taking his company public with an IPO; which Brouchard predicts will start out at $50/share; (I could write an entire article on this subject alone). But what is not being told to us as tax payers who are funding this project, is where is our ROI, (return on investment)? If as tax payers we are putting up nearly 20%, (yes, 20% of the cost of Braidy project according to this CJ article , then where is our guarantee of return?
As a tax payer we should demand warrants against preferred stock against our investment so that we can be absolutely sure to get a return on those monies. If you are not familiar with it, there are basically two types of stocks, (although there are others), but most often there is “common” and “preferred” stocks. Preferred stocks mean that we as an investor will be guaranteed a fixed dividend in perpetuity. In other words, we will get “revenue” from our investment as the company performs. Also, if the company ever is liquidated, (i.e. ‘goes out of business’, or is sold), as a preferred shareholder the tax payers are paid off first, before any other stock holder, (after debt holders and other creditors, of course). And finally, as a preferred stock holder it is “callable” meaning that while Braidy retains the option to re-purchase shares (which is often what tax cuts allow companies to do), as a preferred stock holder, we can ask for premium price per share.
CEO Brouchard has made some very bold claims as to the overall projected success of this factory in dollars. Claiming that he has 160% pre-sold capacity, yet he has not provided information on as to whether that is a true statement. However, assuming that is true, we are not just ‘tax payers’ in this effort. We are “stakeholders and investors” in this deal. And as primary investors, we need to protect our investment. Something that the Governor has not proved to this point he has done. We need people in Frankfort that know business, and know how to protect your taxes, your investment and grow our communities.