Sillerman’s Foolish Valentine

The Motley Fool gave Robert Sillerman a valentine he probably could have done without. The financial tip sheet ran a story headlined “The Stock That Could Ruin Your Life” Feb. 14 taking aim at his latest investment in Gateway Industries.

The venture is a nonoperating shell company that the onetime concert promoter rollup king and CKX founder recently bought into to the tune of 120 million shares at 3 cents apiece. Gateway is to be renamed Function (X) and used to acquire and develop new-media businesses, according to the Fool.

The company’s shares surged as much as 27,000 percent between Feb. 8 and Feb. 10 with the investment, but Motley Fool points out that it has little more than $3.6 million Sillerman paid for the shares, and some $12.6 million in accumulated losses.

With shares currently trading at around $2, the tip sheet says, it already has a market cap of about $250 million making for “a recipe for disaster.”

“It’s a stock that could ruin your life,” the Fool reported. “You have no idea how the company will make money or what assets it has. You’re handing money over to an unknown management team, and you’re just hoping for the best. Plenty of other public companies could ruin your life, despite their SEC filings. Enron? Worldcom?”

Sillerman, unsurprisingly, sees it differently.

“Function (X) dwarfs the CKX opportunity by an order of magnitude,” he told the Fool.