OpenSea Valuation Declines, Restricts OTC Sales
OpenSea, a leading NFT marketplace, has seen its secondary market valuation plummet from $12 billion to $1.2 billion.
The company is now putting brakes on over-the-counter (OTC) equity sales as it seeks new rounds of investment.
A Blocked OpenSea Sale
Dovey Wan, a prominent figure from Primitive Ventures, has brought to light a critical development within OpenSea’s management. She revealed that the company blocked the sale of its equity to an investor who was looking to purchase at a 90% discount from the last investment round.
The move appears to aim at keeping the reduced valuation confidential to avoid impacting ongoing fundraising efforts.
Wan highlighted the pitfalls of permissioned liquidity in a tweet where she shared the situation. “Equity is really worse than NFT… permissioned liquidity is the worst,” she tweeted.
Was offered a secondary of one big crypto unicorn a year ago at 12B val and now was offered again at sub 1.2B, and the co is blocking that sales so on paper it won't be valued at 90% discount 😹— Dovey "Rug the fiat" Wan (@DoveyWan) September 19, 2023
Equity is really worse than nft … permissioned liquidity is the worst
OpenSea’s current actions underscore the company’s desperate move to uphold its market image while it seeks new investments. Blocking equity sales at a discounted rate, especially at a 90% markdown from the last round, may create a sense of false security among existing and potential investors.
However, this strategy could backfire in the long run as it questions the company’s transparency and might make investors hesitant to participate in future fundraising rounds.
Reputation Damage or a Smart Move?
While it’s too early to pass a definitive judgment, OpenSea’s tactic to block OTC sales and mask its plunging valuation will have significant consequences for its image and future fundraising efforts. If the company successfully navigates through this challenging period and lands substantial investments, it may manage to turn the tide.
On the other hand, the company risks further damaging its reputation if it fails to convince investors of its worth, especially amid such bold moves to control the narrative.
Any data, text, or other content on this page is provided as general market information and not as investment advice. Past performance is not necessarily an indicator of future results.
The Trust Project is a worldwide group of news organizations working to establish transparency standards.