OpenSea Valuation Declines, Restricts OTC Sales
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In Brief
OpenSea, a leading NFT marketplace, has seen its secondary market valuation plummet from $12 billion to $1.2 billion.
OpenSea, once a soaring star in the NFT marketplace, has recently faced severe setbacks, with its secondary market valuation crashing from a staggering $12 billion to just $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.
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Nik is an accomplished analyst and writer at Metaverse Post, specializing in delivering cutting-edge insights into the fast-paced world of technology, with a particular emphasis on AI/ML, XR, VR, on-chain analytics, and blockchain development. His articles engage and inform a diverse audience, helping them stay ahead of the technological curve. Possessing a Master's degree in Economics and Management, Nik has a solid grasp of the nuances of the business world and its intersection with emergent technologies.
More articlesNik is an accomplished analyst and writer at Metaverse Post, specializing in delivering cutting-edge insights into the fast-paced world of technology, with a particular emphasis on AI/ML, XR, VR, on-chain analytics, and blockchain development. His articles engage and inform a diverse audience, helping them stay ahead of the technological curve. Possessing a Master's degree in Economics and Management, Nik has a solid grasp of the nuances of the business world and its intersection with emergent technologies.
