Ever since Dr. Dre forgot about Monster and walked into the loving arms of Apple, the overpriced cable manufacturer has struggled to keep its head above water. But it’s 2018 and every failing company has one ace up its sleeve when it needs to save itself: Pivot to blockchain. Say hello to “Monster Money.”
Coindesk was the first to spot Monster’s recent SEC filing to start its own initial coin offering. The documents outline a plan to create Monster Money Tokens (“MMNY”), a cryptocurrency that will be used to buy the company’s “high-end” cables online. Does anybody need a cryptocurrency to buy Monster cables? Absolutely not. Should people buy Monster Cables at all? It’s your life, buddy. Will this scheme save the company from utter collapse? ¯\_(ツ)_/¯
From Coindesk’s report:
As part of the plan, Monster will create 500 million tokens and sell as many as 300 million in its offering. The offering will run for one year, unless it sells out sooner or it decides to cancel the sale early. The company is also issuing 75 million shares of common stock so that, if the network fails to launch, it can exchange every four tokens for one share of stock (in lieu of returning the money).
Notably, the token does not come with equity or voting rights. Instead, it’s designed as a payment method for the e-commerce website (under construction), one with faster settlement and lower fees than existing payments rails. (Still, the filing acknowledges that this might not be enough to prevent it from running afoul of securities law.)
Monster is a privately held company but it opened itself up to outside investors for the first time last year. The fact that it’s offering any kind of real-world backing for its ICO token is a bit surprising considering how many other offerings just take the easy money and run. But according to the SEC filing, a stake in Monster might not be worth much at all. As of December 2017, it had $7.8 million in cash and $75.9 million in negative working capital. It posted a net loss of $26.7 million in 2017 and has already lost $19.6 million this year. “Our independent auditors have indicated ... that there is substantial doubt about our ability to continue as a going concern,” the company wrote.
The plan outlined in the filings starts with building its e-commerce system on top of the Ether network using the ERC20 token protocol before migrating to its own blockchain... eventually. The claim that blockchain tech will be used for “payment processing, market analysis, accounting, audit and payroll services, inventory management, and shipping operation,” is the kind of thing a lot of ICOs say, but it’s a dubious prediction at best. Obviously Monster digging itself out of a massive financial hole would be a necessary first step before innovating the shit out of supply chains.
If all goes to plan, you’ll be able to pick up a Monster Money token for $1 each. Traditionally, private investors get the first crack at an ICO and often receive a discounted price. Telegram recently raised $1.7 billion for its ICO before it ever made it to the public stage. According to the tracking service Coinist, Monster’s offering will be the biggest public ICO of all time if it pulls it off.
Having firmly lost the audio wars, Monster sets itself up to face off against a new set of competitors in the filing. It absurdly claims that it will now be competing with Amazon, E-bay, and Alibaba.
Maybe Monster really will build a big blockchain e-commerce site, the likes of which the world has never seen. For now, it appears this is more of an iced tea kind of thing than a Kodak situation. At least Kodak wants to use blockchain for something that’s kind of in its wheelhouse—photographic rights management. Monster knows nothing about e-commerce and it’s clearly shown it’s not even great at running a cable business. But we’re still in the blockchain gold rush despite the stagnant cryptocurrency market and a sucker’s born every day.