Overnight News: When is ninety dollars worth a thousand bucks? When Pacaso says so.

Time-sharing real estate brokerage Pacaso made The Daily Mail, America’s last reliable news source. They’re also in The Wall Street Journal, but that link is paywalled.

Both stories are about efforts in Napa Valley to keep the carpet-bagging time-sharing interlopers out, but my own interest today is broader:

Why is Pacaso, a very small boutique time-share real estate brokerage, capitalized at $90 million, said to be worth $1 billion? What turns ninety dollars into a thousand bucks?

Ballyhoo, perhaps? In the Daily Mail article, Pacaso admits to having sold 200 time-shared units, to date. Each unit is one eighth of a time-shared house so Pacaso’s nationwide internet startup time-share real estate brokerage has sold the equivalent of 25 houses, so far.

Much more than I would have guessed, for what that’s worth. But even assuming I am wrong about all known organisms and their unwillingness to share with strangers, Pacaso’s total market consists of a fraction of the one-percent. Even if people actually liked sharing intimate things, Pacaso’s pitch is to a niche of a niche.

Not that they pitch well, anyway. Using CEO Austin Allison as TV spokesmodel was a mistake. His arguments are defensive – sharing time in a home with strangers is definitely not time-sharing! – and his affect autistic. Nerds are impressed by nerds. Everyone else can change a tire and get a date without staff support.

The internet angle seems specious to me, too. No form of real estate flipping requires the internet – as the other iBuyers have already discovered. Accordingly, Pacaso’s web site and smartphone app end up being a national wishbook for underfunded looky-loos – which is exactly what they brag about in their statistics, web site visitors, not sales.

The big lawsuits won’t be over neighborhood concerns – nor over the use of the term “time-share” to describe Pacaso’s time-share business model – but over the vigorish – the secret sauce in the management contracts that makes investors think their ninety bucks can be traded for a thousand of your dollars.

Pacaso’s time-shares sell for about double what they should – good luck getting that equity back, suckers – but my guess is that the real money is in the recurring fees. In other words, as with any time-share, you won’t be able to sell your “share” – and the ever-so-humble servants managing your “property” will milk you to death in perpetuity.

So what can one can conclude but this? Pacaso is definitely not a time-share swindle – and it is totally not a watered-stock scam:

If you buy an eighth of a house from them, you’ll only have to pay a quarter of its value to get it – and there will never, ever be conflicts with the neighbors or the other seven time-share “owners” enmired in your self-inflicted tragedy of the commons.

And if you give Pacaso a thousand bucks as an IPO investor, they will be delighted to deliver as much as ninety dollars worth of rock-solid value in return.

In other news:

The Daily Mail: Angry Napa Valley residents go to war with Pacaso, a startup that is buying luxury homes in exclusive neighborhoods across US to sell as timeshares and enraging wealthy neighbors.

The Hill: Why cities can expect 2020’s violent crime spike to last.

American Thinker: Following the Scientists Who Were Destroying America Just to Spite Trump.