The market for digital IPOs hardly exists. When Security Token Offerings (STO) take place, they are primarily for real estate projects, but not for companies. Only very few companies have carried out publicly accessible securities issues using the block chain. One of them is tZERO.
The largest digital IPO to date was carried out by the e-commerce company Overstock, or more precisely by its subsidiary, the trading platform tZERO, from the USA. At that time, STO had collected 134 million US dollars through security tokens. However, this record was no accident: After all, Overstock is an absolutely established company. Otherwise, it tended to be start-ups that tried their hand at STO financing.
tZERO and OSTKO
It is therefore all the more gratifying that tZERO is now doing the same thing as many traditional listed companies: it is paying a dividend. For example, a document issued by the US Securities and Exchange Commission (SEC) on April 7 shows that the company has planned to pay a dividend to its security token investors on May 19.
From a technical point of view, the dividend payment is similar to an airdrop in which shareholders are credited with another unit of security tokens called OSTKO in a ratio of 10:1 (effective date 27 April). However, the OSTK tokens can only be traded on the company's own trading platform tZERO.
Profit distribution with calculation
So far, there is a lack of comparable companies with security tokens that pay dividends. Overstock therefore benefits from increased attention, which in turn should attract new investors.
With a current market capitalization of around USD 26 million, it is nevertheless a very small fish compared to traditional public limited companies. If you compare the traditional shares of Overstock - the STO was only for the Overstock subsidiary tZERO - you realize the dimension. The market capitalization of the overstock shares is almost ten times as high. In the past, however, the shares of Overstock were able to profit from the innovative IPO of the subsidiary tZERO and rose after the announcement of the STO.
Euphemism dividend
As pleasing as the mini-dividend payout is, the investment can be described as a failure. The expectations for the tZERO trading platform were high and have been disappointed so far. Instead of finding many listed security tokens from other companies and high trading volumes, one finds only the security tokens from tZERO.
The disappointment is also reflected in the share price development: a minus of about 90 percent since the issue. The funding of 134 million US dollars seems very exaggerated, especially since the competition in security token trading is not exactly going to be minimal. The example of tZERO shows that even an established company like Overstock cannot generate a token adaptation at the push of a button.
Establishing digital IPOs at companies requires more time and regulatory clarity than was assumed a year or two ago. Like all other market pioneers, tZERO must now stay on the ball to benefit from the transformation process to digital assets.
To describe OSTK's current distribution as a dividend payment is somewhat euphemistic. After all, there is hardly any trading of one's own tokens on tZERO and if there is, then only a few thousand US dollars on some days. The payout is more like a marketing campaign in the form of an aid drop than a dividend payment in the classic sense.
