8I Holdings Limited (ASX:8IH)

[jaco]

They managed to somehow get a pte entity listed at a ridiculous valuation, aka sold out to the dumb public at IPO.

In principle, you are right. One is free to offer a company for IPO at a ridiculous valuation. The market is free to accept or reject that valuation and in this case there were apparently some buyers initially.

However, there are still rules and regulations pertaining to the IPO process and a lot of those concern full disclosure of the facts by the sellers in order to protect the buyers. In the Digimatic prospectus two companies with non-descriptive names (Champion Star United Inc and Aden Ventures Limited) are listed as large pre-ipo shareholders. There is no explanation of who these parties are and what their intentions are. From various sources, we now suspect that former students of 8I's investing courses are behind these entities. If true, it seems to me that this is material information that should have been mentioned in the prospectus. Any reasonable, prospective buyer of Digimatic shares, would want to know this.