Every now and then a company comes along that wants to raise a whole whack of cash from you so they can do what you could just do yourself if you weren’t so freaking lazy.
“We’re going to invest in cryptocurrencies!” is a new one, and it’s as dumb an ideas it sounds. Mostly because you can invest in cryptocurrencies all by your own damn self.
Ether Capital (ETHC.E) has delisted its shares, rolled into an RTO, and announced it will sink its financing dollars into crypto.
No purchase. No business. No grand plan. Just a wallet.
Still – people have given it money. And now it’s a public company, if only on the Aequitas NEO exchange, home to Nobilis Health (HLTH.E) and a few hundred ETFs, and no other actual business-doing companies at all.
When I was a kid, my grandma came home one day with a product from the supermarket called ‘Instant Omelette’. The deal was, you could just crack the plastic egg-shaped container open and mix the powder inside with water, pour it into a pan, and you’d have an omelette.
“So… it’s an egg?” I asked.
“No, it’s instant omelette!” she said.
It was an egg.
A few days ago, Ethereum Capital merged with the shell that was Movit Media Corp (MV.E) to become a thing. It’s plan is to take the money it raised in its go-public round to buy the Ethereum cryptocurrency. And maybe some associated Ethereum businesses. But mostly (90% reportedly) just Ethereum.
Immediately following the commencement of trading, Ether Capital will begin implementing its business plan which will initially involve investing the majority of its available funds into Ether, the crypto asset native to the Ethereum ecosystem.
They raised $45 million on the back of this strategy.
Jesus Christ on a kegstand.
The CEO, Michael Conn, says, “We are effectively creating a pool of publicly traded permanent capital. The level of regulatory scrutiny we will be subject to such as quarterly investment calls, quarterly financials, etc., will provide cover to those businesses underneath us. They won’t need to face regulations head on, as they would have if they had raised capital via an ICO.”
So, basically, we’re going to use public money to help ICOs avoid following regulations?
If you kind of like the idea of a company bossing the Ethereum table with $40 million, and think it could be a market mover with that much cash hitting the ETH, got news for you.
ETH is down since the transaction closed. Obvs.
Look, you could make a case for saying HIVE Blockchain (HIVE.V), which has been getting hammered on the exchange despite having massive amounts of Ethereum mining capabilities, isn’t much different to what Ether Capital is doing. They mine Ethereum almost exclusively, and they’re holding it for the long term because they believe having a massive amount of virgin ETH will be something big financial institutions will need going forward.
HIVE’s business is not to ride the rise and fall of Ethereum as much as it is to create ETH at a 50% margin. Whatever benefit ETHC draws from owning Ethereum, HIVE draws the same benefit – with the added advantage that they didn’t buy it, they built it, and they own enough of it that they’re actually able to boss the table.
“At least it’s an ethos.”
Now, sure, ETHC might have some massive transaction planned that all those people who dished tens of millions to them were let in on, while you schmucks in the public markets weren’t, but you know who I think sinks everything they’ve raised into something you or I could buy ourselves if we wanted, and does so on an exchange nobody trades on?
Someone who has quit. Someone who loves the money they’ve received and will be able to draw a salary from that money for a long time, but somebody who thinks the hey days have passed for blockchain and if they actually went public in a meaningful way and tried to do business right now, they’d get punished for it.
Or they think they couldn’t have got their deal past a real exchange in due diligence.
Either way, ETHC is hiding. It’s camped out in the woods. It lives in a van down by the river. It’s a survival nut with a basement filled with bullion.
Also: This, sent by a reader.
See SEDAR filing statement, January 27, 2018: 22,222,222 Ethereum
Capital Shares issued at $0.0001
Tomorrow, let’s go out and raise $45 million and use it to go public on the Argentinian Exchange, and we’ll spend the money buying baseball cards.
Can’t lose. Email me for the sub docs.
— Chris Parry