Synthasite has a free stock offering? Is there such a thing as a free lunch?

According to Synthasite, the company offers "a browser based AJAXified website construction / mashup tool that allows you to assemble your website from any PC." I'm not sure what this means but it sounds cool.

The company's team is also a "smiley / fun / quirky bunch" (that is, according to the website). But, maybe the team is too quirky. If you check out their latest blog post, the company is planning to give away shares to its "community."

Huh? That's right. Basically, for those users that have helped test the product, they may be eligible for a grant of shares.

And, yes, you can participate as well.

Hey, the value of the shares are about $250,000 (this is according to Synthasite's own valuation). If the company sells out or goes public, you are likely to get a windfall, right?

I wouldn't be so sure.

If the company is so good, why aren't they paying people in cash? Why give away valuable stock?

Another issue: buyers don't like companies with lots of shareholders. It can be an administrative nightmare.

How about the securities laws? While it's true the company is based in South Africa, I still think there is potential liability. The reason is that the stock offer is available to US citizens.

Interestingly enough, the offer does have a disclaimer. For example, the shareholder will be responsible for "ensuring compliance." In other words, the free offer may not be so free.

Tom Taulli is the author of various books, including The Complete M&A Handbook and The Edgar Online Guide to Decoding Financial Statements.