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Yeah the article describes this a bit confusingly. They do have access to the capital they raised, they just don't have control over the subsequent flow of capi
by lacker 8y ago
Yeah the article describes this a bit confusingly. They do have access to the capital they raised, they just don't have control over the subsequent flow of capital in and out of these tokens. For example:
One source said an early investor who acquired a tranche of tokens at a price of $0.37 is actively seeking to sell for $1.30 — potentially a 3.5-fold increase for a token that hasn’t left the gate yet.
That sort of flipping (or "capital flow") isn't typically possible in startup fundraising because investors are restricted from selling their stock.
For a normal startup it would look bad if your investors wanted to sell their stock immediately because they would be signaling a lack of confidence in the future. For this Telegram ICO, it isn't quite the same, but some people might look at it as a bad sign in a similar way. To me, it is hard to tell what the underlying basis for any valuation of this ICO is.
- gowld 8y agoIf investors sell at a loss, that shows a lack of confidence. Selling at a gain means the investor thinks the stock is plateauing (not growing as quickly as before), not necessarily bad if the stock already has a $billion valuation and other investors are looking for a lower return (lower risk?) investment than the the original investor. An ICO is more like an IPO than a seed round, in terms of who buys in. And early investors / insiders quite commonly sell fine stocks shortly after IPO. None of this is a comment on the quality of Telegram in particular.
- cwkoss 8y agoCould also mean that investors are covering cost, but still keeping part of their position. Ex buy at 0.30. Price goes to 1.2, sell 25% of holdings to cover cost, but let profit ride. As the saying goes, "Can't lose money by taking profits".
- deleted 8y ago[deleted]