When this phenomenon was discussed on a radio breakfast show (here in NZ) recently, the host was mocking the idea of trading in things that don't really exist but only had theoretical, notional value on paper... his co-host/producer/side-kick buddy interrupted halfway through and said "sorry Mike, I missed the beginning... what are you talking about ? Wall Street ?"
He had a point.
"Value" is subjective. Anything can have value. "Virtual" is also a bit of a misnomer... a term that get's applied to anything in the digital domain.
If I make some music, record it as an MP3 then destroy the original master recordings, is that MP3 only "virtual music" ? Is it nonesense (as the copyright holder) to charge someone for taking a copy of the MP3 ?
Or if I create a company and then decide to sell "bits" of it by creating 1 billion "shares", that didn't previously exist....
The real problem I have with this story is the idea that some credibility is attributed to the venture on the basis of Sam Morgan getting involved. Sam Morgan got lucky - he created an NZ equivalent to ebay (TradeMe) which if truth be told is a crock of shite in comparison to the service that inspired it. He was then lucky to sell it at a ridiculously inflated price to a company that ought to have known better and has been kicking itself for being so stupid ever since.
He got lucky - he's not some sort of investment genius.
If the headline was "Lotto winner invests $2.5m in firm" we wouldn't be so interested, but that is essentially what happened.
Mines the one with the decent auction/classifieds site for NZ that we all dream might one day be created, in the pocket