World Chess announces plans for ‘hybrid IPO’ featuring a security token offering

World Chess, a London-based media company that holds the commercial rights to the World Chess Championship, has announced plans for a “hybrid initial public offering”. The plan would entail first raising funds through a security token offering before floating on the London Stock Exchanges’ AIM market in 2020. According to World Chess CEO, Ilya Merenzo, the offering is set to launch next week where the company will raise “in the low numbers of millions of dollars” selling around 4 to 6 percent of the company. The security tokens will launch on Algorand ($ALGO) and will be convertible into potentially more liquid shares when the Aim listing has taken place. Merenzon stated that the majority of the funds raised will go towards developing chess as an Esport.

Why it matters:

• Security tokens were all the hype after the collapse of the ICO market in 2018. The idea that the industry would migrate towards more regulatory compliant token offerings appeared obvious. Yet, security tokens have failed to gain any meaningful traction to date. Plans like this, if executed successfully, may be able to provide a counter to this narrative.
• The offering marks the first security token to be issued on the Algorand blockchain. Algorand now joins an emerging competition to become the dominant blockchain for security token offerings. The Tezos Foundation in partnership with Overstock’s tZERO ($TZROP) recently announced a plan to tokenize up to £500 million ($643 million) of U.K. real estate financed by Alliance Investments. The tokens will be issued on the Tezos ($XTZ) blockchain.