Roy Sebag

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Roy Sebag
Born Roy Sebag
(1985-06-28) June 28, 1985 (age 33)
Residence Toronto, Ontario, Canada
Occupation Entrepreneur, Investor
Years active 2015–present
Known for GoldMoney Inc, BitGold, Menē
Salary Goldmoney Inc. $1 (2016)

Roy Sebag (born June 28, 1985) is a contrarian investor, entrepreneur, and writer.[1] In 2014, Sebag founded GoldMoney Inc and currently serves as the Chief Executive Officer. GoldMoney Inc is a gold savings/payments company publicly listed on the Toronto Stock Exchange.[2][3][4][5] He is also the Founder of Blockchain Mining, Ltd. a publicly traded company on the Tel Aviv Stock Exchange which owns the largest cryptocurrency mining operation in Canada.[6][7]

In 2016, Sebag along with Diana Widmaier Picasso founded Menē - which designs, manufactures, and markets 24 karat gold jewelry that is retailed direct-to-consumer online.[8]

Early life[edit]

According to Robert J. Moriarty, who met Sebag on a tour of a company they had both invested in, Sebag showed promise as an investor from a very young age and is an autodidact.[9]

Investment partnership[edit]

Sebag describes his investment style as mix of contrarian value investing modeled after the late Benjamin Graham in his book The Intelligent Investor and the identification of asymmetry in the risk/reward dynamics of a potential investment. Sebag believes that financial events described in the black swan theory are not as rare as financial models predict.[10]

On July 23, 2007, Sebag authored a letter entitled "Reality Approaching"[11] where he discussed the housing bubble: "I feel that in the coming years reality will set in and the huge overhang of debt will become a burden on the global economy. I am not entirely sure as to how the economy will fare out of this cycle but I believe that it will be a long time before valuations are attractive again and our portfolio is positioned accordingly."

In March 2008, Sebag through Essentia Equity, provided seed financing to PPDai, a Chinese peer lending network.[12] On November 15, 2013, PPDai closed received a $35 million investment from Alibaba Group.[13] PPDai completed an IPO on the New York Stock Exchange on November 10, 2017. [14]

In June and July 2010, Sebag through Natural Resource Holdings, invested in British Petroleum. His investment thesis was predicated on the long-term financial opportunity present in BP shares due to the Deepwater Horizon Oil Spill that occurred between 20 April 2010, and 19 September 2010.

In 2011, Sebag led an investment group that injected $43 million of rescue financing into American Apparel helping the company avert bankruptcy.[15] In an interview with the fashion-industry trade journal Women's Wear Daily, Sebag was quoted as saying: "We are contrarian investors and look for opportunities where the market has discounted companies for reasons that are temporary ... American Apparel is a perfect example of that. In my opinion, it's one of the greatest brands that's been created in the recent past — it went from zero to $550 million in sales in five years, has set countless trends, resonates with consumers around the world and is trading at a ridiculous valuation. Why? Because of sexual harassment lawsuits, an auditor resigning and employees being deported — which all makes for great headlines but has nothing to do with consumers around the world wanting to go into the stores and buying the product." [16]

In September 2012, Sebag invested in German automotive company Porsche Automobil Holding SE, which controls 50.73% of the voting rights in Volkswagen AG. In an interview with the financial newspaper Barron's, Sebag argued that the legal overhang due to the 2008 short squeeze of Volkswagen provided a unique opportunity to purchase shares of Porsche at a discount. He calculated the value of the shares at 100 euros.[17]

Natural resources and gold[edit]

In 2010, Sebag formed Natural Resource Holdings, an asset consolidator of historically delineated natural resource deposits. In his 2013 letter, Sebag explained that "gold and finite natural resources (what I define as money in our present global economy which relies on 100% fiat based mediums of exchange) have become cornerstones of my investment process", citing the fiat money system as being the chief enabler of debt which leads to unnecessary financial bubbles, and defers savings.[18]

In an interview with Max Keiser, Sebag explained that his view of financial markets and the economy changed following the financial crisis of 2007–08, and he began to develop a deep interest in gold.[19]

Since 2011, Sebag and his team at Natural Resource Holdings have been compiling and distributing a database of the world's largest gold mines.[20] Sebag would later claim that this laborious work helped him understand the relative crustal abundance of the elements and how gold ascended as money.

Roy Sebag and Josh Crumb, with Max Keiser and Stacy Herbert

Goldmoney Inc.[edit]

Following the 2008 financial crisis, Sebag met Josh Crumb, a senior metals strategiest at Goldman Sachs, and the two developed the idea of a full-reserve banking gold-based financial institution. This ultimately led to the formation and launch of BitGold, which subsequently became GoldMoney, after BitGold acquired that company in 2015 as a reverse merger. In May 2016, Sebag won the Canadian Capital Markets Deal of the Year Award for the GoldMoney acquisition.[citation needed]

Mene Inc.[edit]

In early 2016 Sebag began to study and write about the global jewelry market which contributes the majority of the world's annual gold demand (2,000 tonnes)[21] far exceeding demand for gold investment coins. Following extensive travels to India, Asia, and Southeast Asia, Sebag recognized an opportunity in bringing the ancient tradition for jewelry being a store of enduring value and accessible savings to the West.

In October of 2016, he founded Mene Inc. a luxury online jewelry venture along with Diana Widmaier Picasso, the granddaughter of Pablo Picasso.[8] Menē (meh-nay) derives its name from the ancient Mesopotamian unit of measurement, the Mene (unit) reflected 567 grams of pure gold and was one of the earliest written words for money. While limited details about Menē have been released, it's company website states: Menē designs, manufactures, and markets timeless 24 karat gold jewelry under the brand name Menē. Menē jewelry prices fluctuate every day with the price of gold.[22]

In December 2017, Mene Inc. announced a Series A raise of up to $21 million in growth capital.[23]

Patents[edit]

In May 2016, Sebag published two patents for Systems Concerning Gold Commerce and Converting Digital Wallet Value to Physical Gold Bullion.[24] According to the patent, the software system allows consumers with gold stored in one or more vaults to purchase goods or services using an electronic commerce system which calculates the quantity of gold to match the purchase price of the goods or services the consumer wants to buy. The system then facilitates the transfer of ownership of the buyer's quantity of gold in the one or more vaults to the seller's vault which represents the payment for the good or service. The software allows consumer transactions to happen in continuous sequences, while the underlying medium of gold remains vaulted during and after the transaction unless the owner requests a transfer or withdrawal from its present vault. The software allows goods or services to be purchased electronically with gold that is stored in a vault.[25]

References[edit]

  1. ^ "Executive Profile Roy Sebag". Bloomberg. Retrieved 14 December 2015.
  2. ^ Waddell, Nick. "GoldMoney Announces Graduation to the Toronto Stock Exchange". Cantech Letter. Retrieved 12 May 2016.
  3. ^ Hill, Liezel. "Toronto-based startup BitGold plans up to $20 million IPO next year". Financial Post. Retrieved 14 December 2015.
  4. ^ "Interview: BitGold co-founder Roy Sebag explains company's philosophy". Northern Miner. Retrieved 3 January 2016.
  5. ^ "Interview: World Gold Council - Gold Investor June 2017". World Gold Council. Retrieved 26 May 2018.
  6. ^ "Tel Aviv Stock Exchange Profile: Natural Resource Holdings". TASE Site. Retrieved 14 December 2015.
  7. ^ "Blockchain merger to make Natural Resource NIS 2b co". Globes.co.il. Retrieved 26 May 2018.
  8. ^ a b "Here's your chance to finally own a Picasso". nypost.com. 2017-06-15. Retrieved 2018-05-31.
  9. ^ Moriarty, Bob. "BitGold Lights Gold's Fire". 321gold. Retrieved 14 December 2015.
  10. ^ "Roy Sebag Introduction: 2013 World Gold Mine & Deposit Ranking". Seeking Alpha. Retrieved 14 December 2015.
  11. ^ "Reality Approaching" (PDF). Hedge Fund Letters. Retrieved 14 December 2015.
  12. ^ "PPDai – China's Leading Peer Lending Network Announces Record Activity". Business Wire. Retrieved 14 December 2015.
  13. ^ "PPDai lands USD35 Million Investment From Alibaba Finance". Venture Capital Post. Retrieved 15 December 2015.
  14. ^ "PPDAI Group Shares Rise in NYSE Debut". TheStreet.com. Retrieved 26 May 2018.
  15. ^ "American Apparel gets up to $43M in rescue financing, avoiding bankruptcy". New York Times. Retrieved 15 December 2015.
  16. ^ "American Apparel Gets $15M Lifeline". WWD. Retrieved 15 December 2015.
  17. ^ "Porsche Preferred Shares Merit a Faster Track". Barons. Retrieved 20 December 2015.
  18. ^ "Global Gold Mine and Deposit Rankings 2013". Visual Capitalist. Retrieved 20 December 2015.
  19. ^ "Keiser Report Episode 934". RT. Retrieved 20 July 2016.
  20. ^ "Global Gold Mines and Deposits Ranking 2012". Visual Capitalist. Retrieved 20 December 2015.
  21. ^ "WGC Report: Gold Demand Trends". gold.org. Retrieved 24 June 2017.
  22. ^ "Jewelry Worth Its Grams in Gold". Retrieved 26 May 2018.
  23. ^ "Menē Jewelry Raises $21 Million in Series A Funding". Retrieved 26 May 2018.
  24. ^ "SYSTEM FOR ELECTRONIC COMMERCE USING GOLD". PATENT SCOPE. Retrieved 12 May 2016.
  25. ^ "DESCRIPTION : SYSTEM FOR ELECTRONIC COMMERCE USING GOLD". PATENT SCOPE. Retrieved 12 May 2016.