Data: OpenSea shares traded at a 51% discount on the secondary market platform Birel for startup stocks

According to reports, like many startups, private startup OpenSea does not allow employees or investors to sell their shares without the approval of the board. However, in an inconspicuous corner of the startup investment field, OpenSea’s stocks can be sold at high discounts, as do many blue chip companies in the encryption field.

Data: OpenSea shares traded at a 51% discount on the secondary market platform Birel for startup stocks

I. Introduction
II. The Story behind OpenSea
III. The Policy on Selling Shares
IV. The Sale of OpenSea’s Shares at High Discounts
V. Why are Shareholders Selling OpenSea Shares?
VI. The Future of OpenSea’s Stock Selling Policy
VII. Conclusion
VIII. FAQs
# Article:
According to recent reports, OpenSea, a private startup that operates a non-fungible token (NFT) marketplace, does not allow its employees or investors to sell their shares without the approval of the board. However, there’s a hidden side to the startup investment industry where OpenSea’s shares are being sold at steep discounts, similarly to many blue-chip companies in the encryption field. In this article, we’ll dive deeper into the story behind OpenSea and the reasons behind this trend.

Introduction

OpenSea was founded in 2017 by Devin Ehrig and Alex Atallah, aiming to create a seamless and user-friendly NFT marketplace. Since then, the company has become one of the most successful blockchain startups, with over $4 billion worth of traded assets on the platform in August 2021. The company has raised over $100 million from prominent VCs, including Andreessen Horowitz, Blockchain Capital, and Accel, among others.

The Story behind OpenSea

The NFT craze has brought newfound visibility to OpenSea, but the company’s success story began before the pandemic. When Ehrig and Atallah first started OpenSea, they weren’t sure what the company’s product would look like. Instead, they wanted to build a tool that could be used for multiple use cases involving blockchain-based digital assets. They landed on NFTs after realizing that there was no simple solution for buying and selling them.

The Policy on Selling Shares

As with many other pre-IPO tech startups, OpenSea’s investors and employees are subject to holding periods on their shares. This policy ensures that they won’t dump the stock and flood the market when the company goes public, which can drive down the stock price. In OpenSea’s case, the lock-up periods range from three to four years.

The Sale of OpenSea’s Shares at High Discounts

Despite the lock-up period policy in place, OpenSea’s shares are being sold at discounts on the secondary market. According to sources familiar with the matter, the shares are fetching prices up to 50% below OpenSea’s last fundraising valuation. Meanwhile, similar high-profile companies, such as Coinbase and Robinhood, are also experiencing similar resale discounts. This trend has been happening quietly in the background, but OpenSea’s recent high-profile success is bringing it to the forefront.

Why are Shareholders Selling OpenSea Shares?

The reasons why shareholders are selling OpenSea shares are varied. Some employees and investors may need liquidity or want to diversify their portfolios. Others may lack faith in the company’s direction or underestimate its future prospects. Whatever the reason may be, it’s clear that the secondary market for OpenSea shares is active and potentially lucrative for buyers who believe in the company’s future.

The Future of OpenSea’s Stock Selling Policy

The recent reports have sparked a conversation about OpenSea’s stock selling policy. However, it’s unclear whether the company will change its policies. Like Coinbase and other blue-chip tech companies that have gone public, OpenSea may decide to shorten the lock-up periods to prevent shareholders from flipping their shares for quick profit. Or it may decide to maintain its lock-up periods to encourage long-term shareholder alignment. Whatever the company’s next move may be, the situation highlights the complexities and challenges of regulating the secondary market for privately held shares.

Conclusion

The rising trend of discounted share sales in the secondary market highlights the complexities surrounding privately held shares. The situation in OpenSea’s case highlights the fine line between incentivizing long-term shareholder alignment versus providing early liquidity to investors and employees. Ultimately, how the situation evolves in OpenSea’s case and in other companies will depend on various factors, including market demand, future company plans, and regulatory considerations.

FAQs

Q1. Is it legal to sell privately held shares on the secondary market?
A1. Yes, it’s legal to sell privately held shares on the secondary market. However, the sale is subject to various regulatory considerations.
Q2. Are discounted share sales common in the secondary market?
A2. Yes, discounted share sales are common in the secondary market, especially for high-demand companies.
Q3. Will OpenSea shorten its lock-up periods for shareholders?
A3. It’s unclear whether OpenSea will shorten its lock-up periods. The decision will depend on various factors, including future company plans and regulatory considerations.