Quote from: seejeffrun on March 01, 2014, 07:21:30 PM

I'm just trying to understand how cryptostocks work, as the website sure doesn't seem to explain much.

This is an old post (refers to GLBSE, a "cryptostocks predecessor") but the message is the same:

Quote

Investors seem to proceed with the belief that these asset listings closely resemble the concept of stocks or other security investments made in the regulated world. We might blame Kickstarter for that.

Kickstarter in its initial form is a platform that simply allows a donation towards a project where the donation earns some type of reward. Without there being equity there need not be the concept of a corporation or LLC as issuer. Equity markets are not equity markets without the concept of a corporation or LLC where ownership can be shared by its equity investors.

Without this concept of a corporate entity or LLC there is then little parallel between an asset listed with GLBSE and a company that trades on a regulated exchange. But when a GLBSE asset fails financially or the issuer defrauds, some investors feel the issuer has responsibility for the capital invested into the cyber-equity. These investors may believe that there is responsibility that extends to the real world. Already occurring is evidence of pressure by investors being applied against individuals who had been issuers of assets where financial losses were the result.

- http://bitcoinmoney.com/post/23499116232/glbse-stock-market