That $400 million deal Soulja B
oy bragged about on Twitter earlier this month appears to be extremely exaggerated.
It's been revealed that the rapper was actually talking about an endorsement deal with World Poker Fund Holdings (WPFH), but the numbers he threw out are very off. And, Forbes did some research to get the real story behind Soulja Boy's deal.
Apparently, WPFH has a market capitalization of around just $52 million, reportsCNN, and even reported losses of over $400,000 in 2015 in their own annual report. So, with these numbers, it would be impossible that they would be able to pay out $400 million to a celebrity endorser... and if they could, would Soulja Boy be the celebrity they picked? Probably not.
Company spokesperson Matthew Bird tells Forbes that the rapper's deal is for both stock and revenue-sharing, but admits the $400 million number isn't exactly true.
"He really kind of jumped the gun" by using the $400 million figure, Bird says. "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."
Justin Bieber and Floyd Mayweather are also shareholders in the company.
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