kaal:claim:3606663-007

Once the staggered private sale discounts of up to fifty percent are counted as a cost of capital, the cost structure of an ICO is arguably significantly higher than that of an IPO, notwithstanding the ICO's lower legal and offering expenses.

Source quote, verbatim

Considering these steep discounts to incentivize earliest possible investments, the cost structure of ICOs is arguably significantly higher than the cost structure of an IPO.

From

Kaal, Digital Asset Market Evolution (2020), 2. Initial Coin Offerings, p. 16
https://ssrn.com/abstract=3606663 · source PDF

Cite as

Kaal, Digital Asset Market Evolution (2020). SSRN: https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3606663

Holds when

ICOs conducted in 2017 and 2018 with staggered discount structures
comparison against average IPO underwriting fees of four to seven percent

Classification

failuresupport: arguedfailure: hidden discount cost exceeds underwriting feesfamily: valuation-and-pricing-failuresecurities-law

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