Our investors bought our stock because they believe in our company. The public offering forums that are proliferating on the Internet often attract smaller companies that need capital infusions but are not big enough, or hungry enough, to spark the interest of traditional venture capitalists or investment banks. Direct Stock Market gives small companies a chance to raise capital by selling issues over the Internet. Peoplestocknetwork and Direct Stock Market are only two of numerous small online mechanisms that have sprung up on the Internet to bypass the traditional Wall Street models for public offerings and trading. Extremely novel and not at all that well known, these so-called digital stock markets typically make money mostly by charging companies for listings on their bulletin boards, and sometimes by charging the firms a small cut of the action, rather than following the traditional route of charging the investors for the trades.
Trade settlement is instantaneous.
Thus far two companies, Internet Ventures of California and Grisoft of the Czech Republic have signed on. Another firm, Clark Engineers of Peoria, Ill., is conducting an online IPO through Niphix. Digital stock markets truly change the rules of the investing game. There are no dealer spreads and no payment for order-flow, the system whereby brokers receive fees for directing trades toward certain market makers. In fact, the investors themselves make the markets the old-fashioned way, by hooking up with someone under the digital buttonwood tree.