Crushpad sells wine futures against economic crisis
December 11, 2008
By Tim Teichgraeber in San Francisco
A San Francisco cooperative is selling futures in a new wine called 'Bailout' - inspired by the economic crisis.
Crushpad, a custom crush facility, will sell the Napa Valley Cabernet Sauvignon at US$39 per bottle.
There is a potential discount: for every 100-point drop in the Dow Jones from the date of purchase to the projected bottling date of 14August 2009, the final price will be discounted $2 per bottle.
If the Dow is higher on the bottling date, the price is still $39 a bottle, making Bailout futures a minor hedge against crumbling stocks and hemorrhaging retirement plans.
If the NYSE rebounds, $39 for a Napa Cabernet from pedigreed vineyards is still a good deal.
'Like most people, we've been watching the gyrations of the stock market, and it's easy to get caught up in it,' says Crushpad president and CEO Michael Brill. 'The idea was just to have fun, and also to show people what's going on at Crushpad.'
Crushpad is an urban winemaking facility that enables budding entrepreneurs make their own wine with expert help from staff. The facility has been a launching pad for over 100 high-end small brands.
Only 500 cases of Bailout will be produced, but Brill says that if the market hasn't yet bottomed out, his company could still take a significant loss on the project.
He says he may insure Crushpad with a modest wager on the Dow Jones, hedging the company against the risk of Bailout, and neatly completing the circle of risk.
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