The Securities and Exchange Commission today sued ICOBox and its founder Nikolay Evdokimov for conducting an illegal $14 million securities offering of ICOBox’s digital tokens and for acting as unregistered brokers for other digital asset offerings.
According to the SEC’s complaint, ICOBox raised funds in 2017 to develop a platform …
Image: GettyZen master goblin Steven Seagal, last seen promoting a straight-to-DVD action flick for fans such as Vladimir Putin–and also in sexual abuse allegations–has agreed to pay the SEC a total of $330,448.76 for failing to disclose the details of his financial relationship with the intriguingly-named cryptocurrency “Bitcoiin2Gen.” …
ICO (Initial Coin Offering) projects have been struggling hard over the recent years to achieve their ultimate business objectives due to various issues like scams, lack of transparency and lack of awareness about crypto market values. This gives rise to the birth of innovative trends in crypto regulations in the …
The IPO will be open for subscription from March 2 to 5.
Under normal circumstances, an IPO is open for subscription for a minimum period of three and a maximum of 10 working days under certain circumstances.
The Rs 10,352 crore SBI Card IPO ((including a fresh issue of Rs 500 crore) will be India’s fifth biggest issuances after Coal India (Rs 15,100 crore), Reliance Power (Rs 11,563 crore), GIC RE (Rs 11,370 crore), ONGC (Rs 10,543 crore).
The Coal India issue was open for four days. The biggest issue was sold from October 18 to 20, 2010, for qualified institutional bidders, and from October 18 to 21 for retail and HNI investors.
With SBI as its parent and 35 per cent of the issue reserved for retail investors, the SBI Card issue is expected to see huge demand. This has led iBankers to seek an extra day to ensure that retail investors get to file their applications on time and no extension is required.
“To ensure smooth conduct of the application process and accommodate retail investors from remote locations, we, on behalf of the promoter and company, requested the market regulator to give one more day so that exchanges can accept all applications up to 5 pm on the fourth day, exchange personnel need not work late on closing day and it becomes a win-win situation for everyone,” representatives of the book running lead managers (BRLM) told ETMarkets.com.
Generally, retail and HNI investors take cue from QIB subscription, which closes by 3:30 pm and retail and HNI applications keep coming in till late on the last day.
In the case of SBI Card IPO, the portion reserved for retail investors is worth around Rs 3,200 crore.
If the retail quota is fully subscribed, based on the lot size of 19 equity shares, 22.5 lakh forms would be needed for one-time subscription.
SBI Card IPO: Why is it being seen as a hot cake?
New kid in town
26 Feb, 2020
SBI Cards and Payment Services, a subsidiary of the State Bank of India (SBI), will hit the primary market with a Rs 10,350 crore initial public offering on March 2. The IPO will be the fifth biggest in India so far. With investor interest already high in the IPO, we bring you all the details you need to know before hitting ‘subscribe’ on the issue:(With inputs from Yes Securities and Axis Capital)
“Considering the initial feedback on demand and investor interest, we are expecting a huge number of applications as was witnessed in all the successful mega IPOs in the past,” the BRLM representative said.
Under normal circumstances, an IPO is kept open for a minimum of three days, which can then get extended by at least three more working days if the issuer decides to revise the price band.
In case of force majeure (unforeseeable circumstances that prevent someone from fulfilling a contract), banking strike or similar circumstances, the issuer can extend the bidding period for a minimum of three working days.
On receiving strong bids, the issuer can even close the offer period for QIBs a day prior to closing date.
In the SBI Card IPO, about 1.31 crore shares have been reserved for investors, who were State Bank of India shareholders as on February 20. They can apply in both retail and shareholders categories if the application amount falls within the limit of Rs 2 lakh.
The SBI arm has fixed the IPO price band in the Rs 750-755 range. The IPO, which will include the issue of Rs 500 crore worth fresh shares and an offer for sale (OFS) of up to 13.05 crore shares, may fetch about Rs 10,350 crore at the upper limit of the price range.
ET Intelligence Group: SBI Cards & Payment Services (SBI Cards), a credit card subsidiary of SBI will raise Rs 500 crore through fresh issue of shares and up to Rs 9,854 crore through offer for sale of existing shares. After the IPO, SBI’s shareholding will fall to 70 per cent from 74 per cent and that of CA Rover Holdings will reduce to 16 per cent from 26 per cent. Given its dominant position in the domestic credit cards market and strong parentage of SBI, the company is well-positioned to take advantage of the rising trend of digital payments. Investors with a longterm horizon and wanting an exposure to growing consumerism may consider the IPO.
BUSINESS AND FINANCIALS The company is the largest pure play credit card issuer in India. Considering the card services of banks, it is the second largest after HDFC Bank. With 10 million cards in force and Rs 98,500 crore in card spends in the nine months to December 2019, SBI Cards had 18 per cent market share. Nearly half the cards are issued using distribution channels of SBI and other banks while the remaining are through its customer acquisition network across 145 Indian cities.
Credit card spends in the country increased by 32 per cent annually to Rs 6.1 trillion between FY15 and FY19 according to RBI and CRISIL following rising awareness of digital payments. The proportion of digital transactions increased to 62 per cent in FY19 from 25 per cent in FY14. These factors augur well for SBI Cards.
The company’s revenue and net profit doubled to Rs 7,286.8 crore and Rs 862.7 crore respectively between FY17 and FY19. In the nine months to December 2019, net profit crossed the FY19 level to reach Rs 1,161.2 crore while revenue was Rs 7,240.1 crore. Its return on equity (RoE) has remained above 28 per cent since FY17.
RISKS Competition from prepaid instruments such as e-wallets and UPI service is rising though they are mainly used for small transactions and do not offer credit period or benefit of reward points unlike credit cards. In addition, SBI Cards has adopted technologies to offer virtual cards on various mobile platforms thereby improving its appeal to tech savvy young generation.
Economic slowdown affecting discretionary spend is another major risk. However, so far, the company has not experienced any slowdown in either card issuance or card spending.
VALUATION Considering the equity after IPO and annualising the net profit in the nine-month to December 2019, the company demands price-earnings multiple (P/E) of nearly 46. It has no listed peers in India. A look at more mature markets such as the US reveals that American Express, which derives over half of the revenue from consumer services including credit cards, trades at a trailing P/E of around 17 with RoE of nearly 30 per cent. Another US company Capital One, which earns nearly two-third revenue from the card business, trades at a P/E of 9.2 and has an RoE of 10 per cent.
While SBI Cards’ valuation looks aggressive, it reflects the faster growth in the Indian market as well as the company’s growth momentum.
The firm develops and markets medical devices to treat patients with venous conditions.
NARI is growing rapidly and nearing breakeven. I’ll provide an update when we learn more about pricing and valuation from management.
Company & Technology
Irvine, California-based Inari was founded to develop two catheter-based thrombectomy FDA-approved devices to treat patients with deep vein thrombosis and pulmonary embolism.
Management is headed by President and CEO William Hoffman, who has been with the firm since 2015 and was previously CEO of Visualase, an MRI-guided laser company acquired by Medtronic.
Below is a brief overview video of Inari’s ClotTriever system:
Source: Inari Medical
The company’s primary offerings include:
Inari has received at least $54 million from investors including U.S. Venture Partners, Cooperatieve Gilde Healthcare, Versant Ventures, Milder Community Property Trust, and CVF.
The company introduces its products to relevant practicing physicians through a dedicated, direct sales force of 63 reps as of December 31, 2019 and continues to add sales personnel.
Selling, G&A expenses as a percentage of total revenue have dropped as revenues have increased, as the figures below indicate:
Expenses vs. Revenue
Source: Company registration statement
The selling, G&A efficiency rate, defined as how many dollars of additional new revenue are generated by each dollar of selling, G&A spend, was 1.2x in the most recent reporting period.
Market & Competition
According to a 2016 market research report by MarketsandMarkets, the global market for thrombectomy devices is expected to reach $1.45 billion by 2022.
This represents a forecast CAGR of 6.7% from 2017 to 2022.
The main drivers for this expected growth are a growing number of minimally invasive procedures, an increasing target patient population, ample medical reimbursements and continuing technological innovation.
Inari’s recent financial results can be summarized as follows:
Dramatic growth in topline revenue
Similarly high growth in gross profit
High and increasing gross margin
Swing to operating profit
Swing to negative cash flow from operations
Below are relevant financial metrics derived from the firm’s registration statement:
% Variance vs. Prior
Gross Profit (Loss)
Gross Profit (Loss)
% Variance vs. Prior
Operating Profit (Loss)
Operating Profit (Loss)
Net Income (Loss)
Net Income (Loss)
Cash Flow From Operations
Cash Flow From Operations
Source: Company registration statement
As of December 31, 2019, Inari had $23.6 million in cash and $29.5 million in total liabilities.
Free cash flow during the twelve months ended December 31, 2019, was a negative ($8.1 million).
Inari intends to raise $100 million in gross proceeds from an IPO of its common stock, although the final amount may differ.
Management says it will use the net proceeds from the IPO as follows:
to expand our commercial activities, including marketing personnel and programs; to fund product development, research activities, and clinical development activities; and the remainder for working capital and general corporate purposes.
Management’s presentation of the company roadshow is not yet available.
Listed bookrunners of the IPO are BofA Securities, Morgan Stanley, Canaccord Genuity and Wells Fargo Securities.
Inari is seeking U.S. capital market funding to further commercialize its approved devices and continue research for development of new venous treatment devices.
The company’s financials show a firm that is growing revenue and gross profit rapidly and is just passing through operating breakeven.
Selling, G&A expenses as a percentage of total revenue have dropped significantly as sales have ramped; its sales & marketing efficiency rate is a still reasonable 1.2x.
The market opportunity for thrombectomy devices is moderately large but features significant competition.
The fact that NARI has grown so quickly in a crowded market means they have taken market share from some of the other players, so that is a positive sign.
Management’s valuation assumptions will be an important aspect of the desirability of the IPO.
I’ll provide a final opinion when we learn more details from management.
Expected IPO Pricing Date: To be announced.
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There are a number of rumoured UK initial public offerings (IPOs) planned for 2020 and beyond. Darktrace, a cybersecurity startup, let its investors know last year that an IPO was its goal. Film buffs might like the idea of acquiring shares in Vue Cinemas and its 200 screen worldwide if it goes public. McLaren’s CEO has expressed a desire to take the company public.
Being among the first shareholders in a hot, newly public company and potentially making a mint has an undeniable allure. Some IPOs have indeed made shareholders incredibly wealthy, but many others have left investors with nothing. On average, IPO investors could have probably done better.
What Jay R. Ritter found in his study of 1,526 IPOs from 1975 to 1984 was that a strategy of investing at the end of the first day of trading and holding for three years was inferior to investing in matching firms that were already listed. The IPO investors ended up with 83p relative to each £1 invested in the comparable firms.
Ritter identified over-optimism in the prospects of the debutant firms as the chief cause of the underperformance in IPO investing, particularly when there are many IPOs happening in the latest hot topic – think dot.com companies at the turn of the millennium, or ride-hailing apps now. Investors end up paying too high a price.
Maybe it’s the fear of missing out on the next big thing that makes any price seem like the right price for IPO investors, or perhaps it’s because the price was never right to begin with.
Making it public
There are more rules and requirements to comply with as a public company compared to a private one, and more people to keep happy. So, why would a company go public?
Access to public markets for capital to expand is a good reason. Introducing the company to new customers through the publicity of the IPO process and a listing on an exchange is another.
New rules for IPOs were established in July 2018. Potential investors now get to see an FCA-approved prospectus before any research from banks that are involved in the actual IPO. Those banks also have to allow unconnected researchers the same level of access to information that their in-house research teams get.
Investors need to be cynical when reviewing material published by the company and its backers. Naturally, the company will present as rosy a picture of its prospects as possible because it wants to sell for as much as possible. Well-informed independent research will provide balance, but investors still need to do their homework.
Perhaps a private equity firm has squeezed every last drop out of the company’s margins and wants to cash in now. Only careful scrutiny of the financial performance might reveal darker motivations for going public. Keep in mind that companies going for IPOs are typically younger and have short track records.
Are IPOs right for me?
Investing in IPOs is riskier than investing in the market in general. An investor looking for growth would probably be better off investing in existing growth companies. For income investors, IPO investing will rarely make sense.
Any amounts committed to IPOs should be small, and you should be able to lose your stake without it affecting your long-term investing goals.
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Any new blockchain startup needs funding, but where does that all-important juice come from? While venerable entities (let’s not list them, presumably, you know what and who they are) certainly have the means to plank billions into their chosen ventures, they can’t be expected to finance the entire ecosystem. So, what are the alternatives?
Whatever sense you put into the term “Initial exchange offering,” they became somewhat popular in 2019 with Binance listing several big ones. The actual difference between IEO and ICO is rather opaque. Still, May alone has brought us eight IEOs launched on Binance, Okex, Huobi, Bittrex and Kucoin raising collectively over $1.5 billion. Further down the road, though, things got a bit dicey with just one IEO left standing by the end of the year.
However, at this point, saying farewell to IEOs is a bit premature. There may be fewer of them in 2020, but with more pressure for profit on exchanges, we can hope for the “less is more” paradigm coming into play. This month we’re looking at several offerings on Coinsbit including Wolfs Group, a consulting service specializing in investments in strategic technologies including paytech.
Saying farewell to IEOs is a bit premature. There may be fewer of them in 2020 but with more pressure for profit, we can hope for the less is more paradigm coming into play
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Also, quantum-proof enterprise-grade blockchain QAN will run an IEO on Bitbay on January 20, distributing 88,888,800 QARK tokens on its platform that utilizes a Proof-of-Randomness (PoR) protocol and is able to run smart contracts in all major programming languages. No new IEOs on Binance or other tier-one exchanges, though, but we can probably write off the apparent slow-down to the holiday season during which crowdfunding efforts cool down dramatically.
At any rate, research published on December 23, incidentally, shows that IEOs lost investors up to 98% of their money in 2019, which could be a pretty firm basis for thinking that IEOs have peaked, and expecting something exciting from them in 2020 is pointless.
Ah, the IPOs…
Will there be an IPO a renaissance after some astoundingly scandalous offerings of 2019? I guess. It’s conceivable that a hybrid crypto fundraising model resembling IPOs could gain traction in 2020. The online gaming and media platform World Chess has recently touted a hybrid IPO for 2020, wherein crypto tokens will be distributed before shares are floated on the stock market. MERJ, the national stock exchange of Seychelles, also announced an IPO of its tokenized shares back in September with a bold claim of being the first fully regulated stock exchange to list tokenized securities worldwide.
It’s conceivable that a hybrid crypto fundraising model resembling IPOs could gain traction in 2020
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Crowdfunding Equity via STOs
Equity crowdfunding via Security Token Offerings (STOs) will play a major role in 2020 and the coming years with angel investors seeking to finally capitalize on crypto businesses they’ve been bootstrapping. For instance, the online investment platform BnkToTheFuture that launched its STO recently saw a 61% increase in crypto investments. Sony Financial Ventures contributed to Bitwala funding round of a $14.5 million. Coinbase Ventures claim they’ve invested in 60 crypto startups over the last few years.
In 2019 Binance was on an acquisition streak promising several more in 2020. In other words, raising capital via regulated hybrid equity sales is fast becoming the norm for a reason: it’s fast, secure, highly transparent, thus infinitely convenient for all involved.
BnkToTheFuture that launched its #STO recently saw a 61% increase in crypto investments. Sony Financial Ventures contributed to Bitwala funding round of a $14.5 million
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More and more seasoned investors choose strong economic models, experienced teams and viable roadmaps over the hype and hyperbole ICOs and IEOs used to offer. Serious venture funding is no longer about VC blockchains foisting heavily-discounted tokens on unassuming retail investors. If anyone, Hedera Hashgraph and Blockstack can testify to that!
As a strong economic model, Security Token Offering gained heavily in 2019. As a regulated fundraising model, STOs are deployed across various sectors of the economy, including financial services, greentech, agriculture, the energy sector, commercial and residential real estate, and many others. To date, we’ve witnessed 64 successful STOs, which have collectively raised close to $1 billion. No doubt, this trend will continue eventually leading to mass adoption of this mode of crowdfunding on a global scale.
Raising capital via regulated hybrid equity sales is fast becoming the norm for a reason: it’s fast, secure, highly transparent, thus infinitely convenient for all involved
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Funding equities of tomorrow is not going to be easy. The prerequisites of successfully raising capital are going to coincide more with common sense and be less prone to hyped-up marketing pitches. Whatever mode of crowdfunding works for you and your business, demonstrating real-world utility, earning potential, and presenting multiple avenues for rapid growth are going to be essential.
Also, let’s not get over-excited and make grand claims that in 2020 startups will surpass the 2018’s record of $21.6 billion in venture funding. At the very least, that would be too optimistic. Still, news editors for the industry press are not about to see their workload diminish: in 2020 we will see more intriguing projects roll off the whatever assembly lines they get put together on, but the real question we’ll need to find the answer for is which one of the future startups we’ll be hearing about in 2021.
Whatever mode of #crowdfunding works for you and your business, demonstrating real-world utility, earning potential, and presenting multiple avenues for rapid growth are going to be essential
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Ilia Obraztsov is an experienced technologist, visioner and business leader skilled to deliver efficient and robust proprietary solutions that rapidly facilitate the transformation from the startup phase to a fully-funded global enterprise. Over his 10-year career in the technology sphere, Ilia has quickly moved through the ranks of the IT sector growing from a backend engineer in a Russia-based machine learning company to CTO of multiple California-based fintech startups. In this role, he specialized primarily in full-cycle product development – cloud solutions, storage design, fault-tolerant and high-load systems, security, event-driven architectures, distributed and scalable apps, blockchain, smart-contract and distributed ledger technologies. He is now CEO of Smartlands, a global digital securities issuance and investment platform headquartered in London, UK. Smartlands is a worldwide platform for the tokenisation of real economy assets by issuing security tokens. Founded in 2017, Smartlands is based in London, UK. The platform was the first in the UK to tokenize a real estate investment offering.