I made a trip to Illinois recently and had a very interesting discussion with a professor at SIUE (Southern Illinois University Edwardsville) about the risk involved with technology companies.
Expensive development costs, pattent protections, and sufficient market demand are all key contributors to the risks faced by technoligcal development companies. However, not many people look at the risk of fraud.
A company in the St. Louis area claimed to be developing a new surgical dental device which would be groundbreaking in the field. Investors went crazy for it. One problem... the product never worked. Behind the guise of "top-secret development" other such things, investors were never given the correct information and were thus led astray.
The tech company filed for bankruptcy last month and no product will be released. Investors will lose everything.
The question I feell that this raises... How much should comapnies be required to share with investors about new technology which they are developing? Should they be required to disclose anything at all?
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There are too many unknowns. There are too many information. Whether it is a technology company or a company produce traditional products, there is no guarantee for success. As "What" and "how much" information should be disclosed, it all depends on the government, the company, and the shareholders.
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