Kevin O’Leary, one of the sharks on Sharktank who calls himself Mr. Wonderful, was visiting with the team at CNBC Squawk Box yesterday when he discussed a forthcoming initial coin offering for a “very prestigious hotel brand” with the security being offered to global investors. Apparently the hotel chain in question is going to issue an “asset based coin” with token purchasers getting 1/3 ownership in the hotel that is ostensibly valued at $1.2 billion.
O’Leary is of the opinion that ICOs may replace shares in small cap stocks. This specific offering is something he has been working on for over 2 months.
This “big deal in New York” is something O’Leary is involved with. The real estate based token is for a brand we are certain to all know and is expected to be announced within the next few weeks.
“If this works, it will be the first of its kind. I am very excited about it,” said O’Leary. “And it is SEC approved..”
Cutting Out the Investment Bankers
O’Leary says the cost of issuance is very low – in contrast to existing investment banking operations. O’Leary says there may be many small investors buying these tokens but he did not disclose which exemption the ICO would be utilizing. Theoretically, to offer the security to US investors, including smaller ones (non-accredited) the Hotel ICO would most likely leverage a Reg D 506c and a Reg A+ offering. A Reg CF offering could be used as well but the cap on this exemption is crippling.
“If this works, you are going to see tremors across Wall Street,” added Becky Quick.
And she could be right.
O’Leary counsel’s aspiring ICO issuers to speak to the regulators first. In fact, this is the path most compliant ICOs are taking right now so he is correct in this statement.
This story is developing…
ICO: Asset-based coins will eventually replace small cap stocks, says Kevin O’Leary from CNBC.
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