Headphone and speaker maker Monster, perhaps most notable for losing the Beats by Dre product line to Apple via an acquisition that the company dismissed as ‘fraudulent,’ now has plans to conduct an Initial Coin Offering (ICO) to raise $300 million dollars.
This ICO comes at a crucial stage for the company, which has suffered losses over the last few years. In 2016, these losses totaled more than $29 million followed by a $27 million loss in 2017. With the new capital and token-driven system, Monster aims to attract other e-commerce platforms onto its networks and eventually compete with the sales of Amazon, eBay or Alibaba.
Details of the ICO
According to Monster’s recent filing with the U.S Securities and Exchange Commission (SEC), the company is planning to offer 300 million Monster Money Tokens (MMNY), which will be priced at $1.00 per token.
“We plan to integrate the Ethereum blockchain technology to our E-commerce website to create the new ecosystem, namely Monster Money Network where consumers may use either MMNY Tokens or fiat currencies to purchase Monster products and services.”
Failure to complete the ICO will result in the conversion of MMNY Tokens to company stocks. As there is almost the same number of common stock outstanding at the time of the offering, each MMNY will amount to one share of the company.
The token does not come with equity or voting rights. Instead, it’s designed as a payment method for the e-commerce website, one with a faster settlement and lower fees than existing payments options.
The sale of MMNY token will begin 2 days following the declaration of effectiveness of their Registration Statement by the SEC. The ICO can only be terminated at the company’s discretion or when the company sells all the tokens, provided it happens within a year from the start of the sale.
Planned Use of Funds
According to the SEC filing:
“We intend to use the net proceeds of this Offering for the research and development of Monster Money Network, an E-commerce platform for Monster products, marketing Monster products and Monster Money Network, establishing partnerships with our strategic partners, and general working capital.”
The company has planned to work with the capital raised in 3 stages:
- Stage 1: They intend to initiate the process by establishing Monster Money Network to provide the basic transactional functions, such as Monster Money Wallets and processing transactions in MMNY.
- Stage 2: Establish a private off-chain platform where micro-transactions can be completed without or with very limited transaction costs caused by mining activities.
- Stage 3: Complete Monster’s blockchain and integrate such blockchain into the operating systems of the Company, such as marketing, accounting and auditing, payroll services, inventory control and shipping management.
This ICO is not Monster’s first attempt to turn things around. In the past, the company has dropped products, shrunk its workforce, significantly cut its marketing budget and even moved its manufacturing unit closer to Mexico. The lingering issues have led Monster to the brink of failure, forcing the company to the unproven world of cryptocurrencies to survive.
If successful, Monster’s ICO will be the largest of all time. Filecoin currently holds the record for most money raised in an ICO at $257 million USD. Tezos closely follows it with a total fundraising of $232 million and the third spot is held by EOS at $180 million.