GLOBE AND MAIL
Friday, May 2, 2003
Australian brothel hits the markets
The world's first publicly traded brothel opened with a bang yesterday in its stock market debut, as investors plunged into what may be the sole industry capable of withstanding a global economic slowdown.
The Daily Planet, which bills itself as the only "six-star" hotel in Australia, offers sex on its room service menu. It celebrated its listing with a promotional appearance by Heidi Fleiss, the notorious Hollywood madam who once served a jail sentence for tax evasion.
Ms. Fleiss, who was hired as a consultant and given the title of "international ambassador," accurately predicted the public's appetite for mixing business with pleasure.
"Obviously, the price is going to go up," she told reporters before the stock began trading on the Australian Stock Exchange in Melbourne. "It's sex and everyone knows sex is a smart investment."
Almost 1.4 million shares of the company changed hands as investors pushed the stock to a close of $1.09 (all figures in Australian dollars), more than double its initial public offering price of 50 cents.
Given the horrid state of international markets, analysts said small investors may have been lured by the staying power of the world's oldest profession: After all, how often do investors get to make money each time someone loses his shirt?
"It is fairly defensive isn't it? Come rain or shine, I guess the more stress one has, the more one is going to use it," said Lucinda Chan, a director at Macquarie Equities.
The bordello "which first opened illegally in the mid 1970s" is located on the outskirts of Melbourne, and features 18 rooms, each appointed with different themes, including the Grecian and the Roman. Rooms are available with two- or four-person showers, eight-person hot tubs, and beds "large enough to accommodate a small group."
Named after the newspaper where Superman worked, all the hotel receptionists go by the name Lois Lane and the lobby features a telephone booth.
And best of all for investors, the visits aren't cheap. Room fees, which are payable directly to the Daily Planet, are $115 an hour, and the company has forecast it will reap about $460,000 in rent revenue over the next year.
Another charge of $115, called a "ladies fee," goes directly to the individual sex worker. The company boasts that its hygiene levels are comparable to those of most hospitals, and that the staff are tested for various sexually transmitted diseases on a monthly basis.
This isn't the first time the Daily Planet tried to bring its wares to market. The company's initial attempt in 1994 was thwarted by antiprostitution laws, but this time around its owners devised a clever solution: they incorporated the premises separately from the sex operations. The Daily Planet simply rents out its rooms to the sex workers and allows them to carry on business independently — hence the double rate structure.
Andrew Harris, chief executive officer of Daily Planet, has sweeping visions for the bordello enterprise and sees it as the first step in creating a "Sex Disneyland" with operations around the globe.
North American brothel operators have tried similar moves, and failed. Mustang Ranch Inc. tried to mount an IPO on the Nasdaq Stock Market in 1990, but was unable to get necessary regulatory approval from the various states, many of which recoiled at the notion of sanctioning the sex trade.
It is not clear whether they would have better luck in Canada.
Steve Kee, a spokesman for the Toronto Stock Exchange, said Canada has never received a listing request from a brothel, but he admitted the possibility raises an intriguing question.
"Do you make a listing decision based on ethics, or do you make a decision based on fundamentals?" he said. "I guess we would have to look at the company if a company like that did apply."
With reports from Reuters, AP
Created: May 2, 2003
Last modified: May 2, 2003
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