Ambisafe’s Orderbook is democratizing financial markets by issuing on-chain fractional shares of SpaceX with the goal to make traditional financial instruments more accessible to people globally.
Let’s talk about SpaceX.
We’re sure you have heard about the company’s success, from launching cargo to the International Space Station to their upcoming manned mission on 7th May 2020, as well as their announcement of a flight to the moon.
Want to be a part of this story? We don’t mean writing your name on a rocket or volunteering to go to Mars. We offer to become a shareholder of a fund that owns shares of a legendary company founded by Elon Musk.
It’s an exciting possibility. Everyone could have their reasons for investing in SpaceX, whether it be faith in Elon Musk’s success, the prospect of space travel, the colonization of Mars, or excitement about the company’s financial success (SpaceX valuation has grown to <a href="https://edition.cnn.com/2019/01/03/business/spacex-valuation-500-million-fundraising-round/index.html" target="_blank" rel="noopener">31 billion dollars</a> since 2002).
Many investors are already engaged in private equity investing - shares of companies that are not publicly traded on the stock exchanges.
According to Robert Himler, head of business development for Equidate, “almost everyone” wants to invest in Elon Musk’s company. “Wherever I travel around the world, investors of all types — individual, family funds, hedge funds, government funds, and investment companies — everyone wants to get into SpaceX” he says.
Let’s imagine for a moment that you want to buy shares of SpaceX. It seems like it should be easy: register on a stock exchange, buy the stock and watch as it trends upwards. It’s not so simple.
The problem is that SpaceX is a private company, meaning that its shares are not publicly traded on the public stock exchanges, such as NYSE or NASDAQ. There are actually only a few ways to buy SpaceX shares:
Wait for the next round of investment. During its next investment round, SpaceX will choose new investors. However, it will most likely select only large funds that are ready to invest more than $10 million.
Buy SpaceX shares in the secondary market, from those who were able to buy shares earlier. But minimal investments usually range from around $200,000 and require a lot of time and paperwork.
Wait until SpaceX goes public (through an IPO), and its shares become available on major stock exchanges.
So what should ordinary people do? That question was asked recently by discussion participants on Reddit after SpaceX attracted another round of investment and its valuation went up from $24 to $31 billion.
Maybe the first thing that comes to mind is: why not let one large investor buy a block of shares, and then resell them, even with a surcharge, to everyone? Other hurdles exist with this option:
Legislative restrictions. In jurisdictions such as, for example, the United States and the European Union, only qualified investors can acquire company securities. In the US, these are people with income of $200,000+ per year or owners of assets starting at $1 million.
The complexity of administration. When there are a couple of dozens of huge volume buyers, it is still possible to cope with tracking documentation and processing transactions. But when there are hundreds of thousands of buyers, the cost of processing smaller transactions will exceed the profit for the intermediary. That is why investment banks require a minimum investment fo $200,000 to get down to business
Pricing. Some companies do not want to be public for objective reasons. Elon Musk regretted that he had made Tesla public, and even thought about making it private again. When a company's shares are freely traded between a large number of participants, speculative interest arises, and this creates additional difficulties for the company itself in work, communications, and attracting new investments. One cannot force a large number of participants not to speculate and not to resell stocks at a volatile price.
What’s the solution?
This is where the blockchain comes into play. Ambisafe has already conducted more than 30 successful tokenization of assets. And we wondered why tokens don’t represent an economic interest in pre-IPO companies like SpaceX.
What we did?
In partnership with Raison Asset Management, Ambisafe created a separate fund - Unicorn Tokenization Corp. The memorandum of the fund states that the shares of fund in form of USPX tokens will be issued on the Ethereum blockchain. With funds raised from the sale of tokens, the fund bought SpaceX shares with the help of Raison Asset Management. Thus, the owners of the USPX token own a part of the fund that owns the shares of SpaceX. If SpaceX’s value increases, token owners will be able to sell their tokens at a new price. And when SpaceX goes public, the fund will sell the underlying shares and distribute the income between the holders of USPX tokens.
The blockchain simplifies and automates the fund administration. Ambisafe has developed a Regulation Aware Protocol (RAP) to comply with legislation in various jurisdictions, and configure in which countries and to whom the token can and cannot be sold.
Out of all the potential options to purchase SpaceX, we believe fractionalized shares on the blockchain is now the best option to allow retail investors globally to own economic interest in SpaceX.
Lowering the costs of processing the transactions using blockchain technology, we can make SpaceX fractional shares available for a minimum purchase amount of $100. Compared to the minimum $50,000 investment required on the private equity market.
The democratization of access to SpaceX shares is only the first step. Next, we plan to fractionalize the shares of other pre-IPO companies, such as Airbnb and Reddit.
So what’s next?
To date, we have completed legal preparations, sold USPX tokens for $250,000 and purchased the underlying SpaceX shares. You can read all the details, check legal documents and learn more about USPX at https://spacex.orderbook.io/
We also will be happy to answer questions in our chat in Telegram.