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Adult Entertainment Capital Takes Porn Public

Posted yesterday by Tom Johansmeyer in Business | 65 views

There’s a new player in the porn finance market. Adult Entertainment Capital has launched the first publicly traded and licensed investment option. Investors can put their money into many different adult businesses.

Adult Entertainment Capital, Inc. has launched the first publicly traded and licensed investment option. Investors can put their money into all types of adult business—from gentlemen's clubs to lifestyle resorts, content and emerging technology platforms. This groundbreaking development changes the porn finance landscape.

Milton "Todd" Ault III, President and CEO of Adult Entertainment Capital, recognizes that the adult industry has suffered from a lack of strong financial investment opportunities, particularly in public capital markets. Adult Entertainment Capital, Inc. plans to meet that need by offering business development funds, financial management and full or partial buyout options to progressive adult oriented companies across all stages of the business cycle.

According to Ault, the process is pretty simple. "We can take a private company and fund them with publicly traded capital reserves, so they maintain their private status, and still have the ability to grow or diversify their business through our investment.” He continues that investors can go directly to their personal brokers to purchase shares in the adult companies through Adult Entertainment Capital's publicly traded stock. “For substantial private investment funds,” Ault says, “Adult Entertainment Capital. can act as a broker for investments and mergers, while giving the private parties the security of expert, regulated and licensed, financial and business management, that you just don't get when friends and family lend you venture capital.”

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Wall Street Bull

This latest development is part of a broader adult entertainment industry trend involving high finance, sophisticated structures and greater investor interest. Penthouse Media Group International (PMGI) has expressed an interest in conducting an initial public offering (IPO), possibly this year. The company is seeking $250 million in equity capital. Also, adult industry hedge fund AdultVest formed to provide investment capital to firms pursuing growth opportunities. The firm currently claims access to more than $11 billion in investable assets, with close to $3 million coming in the last day.

Like AdultVest, Adult Entertainment Capital is interested in all types of adult oriented industries. A growing market is arising for lifestyle services, including resorts tailored for swingers'. Gentlemen's clubs, adult novelty businesses and internet and mobile delivery of adult entertainment are also showing growth and diversification potential that will benefit from the type of financial services Adult Entertainment Capital, Inc. can deliver.

But, there is one crucial difference. AdultVest is privately held and only open to “qualified” investors—typically those with annual incomes of $300,000 or liquid net worths in excess of $1 million. Adult Entertainment Capital, on the other hand, is publicly traded, which makes it accessible to investors of all sizes. The firm trades over-the-counter (OTC) as ZLST.OB.

This is yet another profound development for an adult entertainment industry that has seen considerable change over the past two years. Mega-mergers, private equity funds and publicly traded investment vehicles are becoming the norm. And, investors are gaining newer ways to access these opportunities.

Welcome to Adult Entertainment Capital

The Porn Business Goes Public
Tom Johansmeyer | September 4, 2008 2:30 PM
Is porn really growing up? There’s no shortage of talk about the mainstreaming of the skin trade, but most of it misses the mark. Instead of ogling the Vivid Video billboard on 7th Ave, check out the OTC listings instead. Adult entertainment just got a new publicly traded player, Adult Entertainment Capital, Inc., and the flesh biz just moved a step closer to legitimacy.

For the past year and a half, we’ve seen finance creep into porn. AdultVest launched with endless fanfare and now claims it has access to $11 billion in investable assets (which doesn't mean much--see below). The company has already done a handful of deals, and with its latest, iPorn, AdultVest is playing an operating role. Penthouse Media Group International (PMGI) has announced its plans to go public, hunting for $250 million in fresh capital.

But these companies are still playing in potential. Adult Entertainment Capital is already traded, though over-the-counter (ZLST.OB). To AEC’s credit, the principals are not porn people, which means they probably have a sense of how to run a company. They’re already making acquisitions, with the ComedyNet pickup being the most recent. And, I’m told, they have more in the pipeline.

The big question that remains is whether Adult Entertainment Capital can compete with AdultVest’s war chest (and PR obsession). It’s hard to say, but take AdultVest's investable-assets number with a grain of salt — in fact, at least one grain for each of the $11 billion it claims. This snazzy number is what would happen if every AdultVest investor actually committed 100 percent of the cash they have available for investment in the flesh biz. When’s the last time shareholders followed through like that?

Tom Johansmeyer is a New York-based freelance writer. He writes “Money Matters,” an adult finance column for AVN Online. Tom has also contributed to Boston magazine, Penthouse and CPA Magazine. You can read his travel column on TraderDaily.com.

Adult Entertainment Capital, Inc.

Adult Entertainment Capital brings the adult industry investment and asset management only offered before through hedge funds and private investors.

Adult Entertainment Capital is a publicly traded company, which is committed to providing funding to businesses that demonstrate potential in the adult end of the entertainment industry.

Adult Entertainment Capital understands the unique needs of the adult entrepreneur, and offers many options to help company owners find the perfect plan to generate new projects, expand existing enterprises and our professional team can provide expert assistance in leveraged acquisitions.

For individual investors, Adult Entertainment Capital offers the ability to invest in privately held adult companies through ownership of our publicly traded stock, giving the individual the opportunity to buy into the multibillion-dollar adult entertainment industry.

For questions about BDC visit http://www.altassets.net/features/arc/2004/nz5302.php

© Adult Entertainment Capital currently trades Over the Counter through stock symbol ADLE.OB. The stock symbol reflects the company's name change from Zealous Trading Group to Adult Entertainment Capital, Inc. The new CUSIP Number is 00740A 102.

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