Hello ! I'm a newbie, but I am currently seeking informations about ICOs and, more precisely, how a company could make an ICO.
I am not talking about an ICO based on a new tech', or whatever. I'm talking about a company that, instead of doing the standard IPO on the "real" market, would create a coin, and sell it as a share. There would be no value, nor any use of the coin, except that it would literally be a percentage of the company's marketcap (a share, in a nutshell)
The thing is: what if I had a very healthy company, that could make a 10-fold turnover increase in a 3-year lifespan? Would you buy their coins if it was just an asset, and not a tech ? In which extent ? How should I define the numbers of coins / ICO prices ? That's be a shame to fail on that part if everything else is fine.
Something like this. I am really bad with how cryptocurrencies works, and more especially, on what ICO are based off.
Please, enlighten me
Depends on the country, if its US based - Best of luck to you.
Also there are several coins like this that essentially do a buyback of their coins which is equivalent to x percent of their profits.
France-based, even though we already entered the market of nearly 30 countries.
They do a buy-back ? Like, they buy all the coins back from investors ? What do they do, then ?
Please develop
I'm not on a personal computer to find the actual tokens/token names but for example:
Selling 1,000,000 tokens for $10 each (Usually much cheaper per token, just an example). Lets say they raise $7,000,000 - 300,000 tokens are burnt.
The company has a buyback policy that 25% of their profits every 3 months will be used to buy back the outstanding 700,000 tokens at 5% below market price.
So 3 months rolls around and 25% of their profit is 1.5 million, enough to buy back 150,000 tokens at ICO price; However the stipulation is market price - 5%. Market price in this scenario is $15 per token, so they place an order for $14.25 or approximately 100,000 tokens this allows people that would like to sell to take their profit and also lets the company honor its buyback policy.
Another example of this is a direct exchange option on the company's website:
Same ICO information as above.
Except in this scenario the company after x period of time buys back all tokens at a fixed rate (I'm thinking of the plastic company ICO) where its a specified buyback rate. Creating a permanent floor for the lowest possible point the tokens would rationally ever be sold at, but they make no effort to personally go and buy off exchanges.
Scenario A) could lead to a token valuation of 10,000 each as the supply dries up
Scenario B) leads to a fixed cost where a company can factor this all in as a future expense.
