It was too good to be true.
Soulja Boy’s reported $400 million deal with “in-flight gaming” company World Poker Fund is, in all likelihood, not actually worth $400 million. The deal was originally met with incredulity until World Poker Fund confirmed the deal last week. How could a company valued at $52 million that lost over $400,000 last year commit to paying a rapper of Soulja Boy’s $80 million a year for five years? The answer: the company paid the rapper in stock, the value of which was capped at $400 million.
Furthermore, as DJBooth points out, World Poker Fund’s main shareholders are Floyd Mayweather, Disney star Kyle Massey, Tyga,Justin Bieber, and Bieber’s go-to songwriter Poo Bear. In exchange for promoting the company’s product, Soulja Boy has received 1.5 million shares. World Poker Fund is publically traded; one share is currently worth $1.70, which puts Soulja’s holdings around $2.5 million. Not bad… but it’s not $400 million.
“He really kind of jumped the gun” by using the $400 million figure, World Poker Fund spokesperson Matthew Bird told Forbes. “The deal is capped at $400 million, and it’s based on a forward-thinking valuation of the company. He’s young, he’s 25 years old. He got really excited, and he tweeted something he probably shouldn’t have tweeted. He was getting a lot of pressure from within the entertainment community, so he wanted to put a statement out. Obviously, the company’s market cap is at $51.8 million. There’s no way they could cut a $400 million deal. Endorsement deals are calculated on a lot of different factors. This is not a fully cash transaction.”
The party who should be held accountable for this huge misunderstanding is not Soulja Boy, but World Poker Fund. Their press release confirming the deal HEAVILY implied that Soulja Boy would indeed be making the full $400 million. Which leads one to believe that this was all a publicity stunt.
