Mirabile Dictu! “Common Stock Does not Constitute an Investment in ‘Stock’”

Anyone who has picked up a prospectus or a private placement memorandum has undoubtedly seen, if not read, various legends and other warnings. Recently, I came across the following legend in an offering document:

Common stock does not constitute an investment in “stock” in the common sense of the term. Purchasers should not purchase common stock with the purpose of making a profit. Particularity in light of the transfer restrictions and redemption rights of the corporation described in this offering document, it is virtually impossible for anyone to realize a profit on a purchase of common stock or even to recoup the amount initially paid to acquire such common stock.

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