Death-Spiral Financier Sason Raises $50 Million for Media Dealsby
Seeks company in technology, media or telecommunications
Sets up blank-check firm with Donald Ienner on board
Joshua Sason, the 29-year-old financier who made a fortune lending money to penny-stock companies, just pulled off the biggest deal of his career.
He raised $50 million from investors and plans to use it to buy a company in the technology, media or telecommunications industries, according to a press release. Sason raised the funds by selling shares in a special purpose acquisition company, or SPAC, a blank-check entity set up for the purpose of acquiring other firms.
Soon after graduating from Hofstra University on New York’s Long Island, Sason learned about a way to get shares in desperate and broke companies at big discounts by lending them money, as detailed in a March 2015 Bloomberg Businessweek profile. The loans are nicknamed “death-spiral financing” because most of the stocks plummet. Sason still makes money because no matter how far the stock falls, he gets his shares for even less. Magna, the company he started at his parents’ house in 2010, invested more than $200 million by the time he was 27.
Sason has denied that his deals qualify as death-spiral financing and said he’s “extremely proud” of his record. He didn’t respond to questions about his new company.
Sason has already been transitioning from penny stocks to the media business. A boxing movie he produced along with Martin Scorsese, “Bleed for This,” is scheduled to be released later this year. It stars actor Miles Teller and was written and directed by Ben Younger, best known for the film “Boiler Room,” which is about penny-stock scams.
Sason is chief executive officer of the blank-check company, called M I Acquisitions Inc., according to a regulatory filing. Donald Ienner, who ran Sony Corp.’s U.S. music business in the 2000s, is on the firm’s board. The filing doesn’t provide any details about what kind of company Sason might buy, other than to note his experience in the movie business. If he doesn’t make a deal within 18 months, investors will get their money back. Investors also have the right to trade each $10 share for $10.30 in cash if they don’t like the deal he makes.