Monster Products Inc the first year incurs losses. However, the ICO declared $300 million can radically change the situation.
Founded in 1978 Monster — producer of headphones and Bluetooth speakers, mostly still relied on retailers to distribute their products. Now the company is going to change that.
According to the application submitted to the Commission on securities and exchange Commission (SEC), Monster plans to launch one of the largest to date, ICO, selling tokens to create «Money Monster Network» — a new e-Commerce site to sell their products (and possibly products of other companies) via the Internet.
In case of successful Assembly the target amount of Monster uses the funds to create a Monster Money Network platform, where the company’s products will be sold for tokens in the network Ethereum.
ICO it fits in with the trend for the production of tokens among the long-existing companies that have tried to implement blockchain to change the principles of income. In the past, such companies, such as Listia and YouNow has already been launched ICO. However, the case with Monster, the first precedent among companies that are existing for so long.
In the framework of its plan Monster will create 500 million tokens and sell 300 million through the placement. ICO will be held for one year, if the tokens cannot be sold quickly or the company does not decide to stop. The firm also will issue 75 million ordinary shares. In that case, if the platform cannot be launched, investors will be able to exchange the tokens for the shares at the rate of 4:1 (instead of return on investment).
Monster has also filed an application to take advantage of the «growing company» in accordance with the Law on startups, which provides less stringent requirements for information disclosure and greater rights for attracting investors.
In the application, the company revealed many details about the launch of the network. For example, it States that Monster Money Network will be used for «payment processing, market analysis, accounting, auditing and payroll, inventory management, and operations to deliver» against Monster products sold on the Internet. In addition, the company hopes to be able to attract other sites on their platform.
Product development will occur in three stages. In the first stage it will just be a payment system using tokens ERC-20. In the next stage it will reduce or eliminate transaction costs by switching to microtransactions offline. In the third stage it is planned to move to their own blockchain.
More than half of the collected money will be intended for technical network development, about a third will be spent on marketing (as the Protocol and products) and development of relations with partners who will sell the products Monster.
In General, it does not seem that the tokens will be the only possible way to purchase headphones and other Monster products. However, it is clear that ICO is one of the main strategies through which the company plans to increase profitability.
While we have not seen any example of how regular the company began to move to decentralized technology. And it seems that Monster is no exception. The company is suffering losses for at least the last seven years.
At the end of last year, the firm showed a net loss of $26.7 million, and has already lost $19.6 million in the first quarter of 2018. From this we can conclude that the Affairs of the company are getting worse and worse.
ICO is not the first step, which went to Monster to change the situation. She reduced States, discontinues unprofitable products, reduced marketing budget and even shut down a plant in Mexico.
Instead of giving up, the firm decided to collect $ 300 million and try to compete with the major online retailers. Crowned the efforts of the firm’s success, it will become clear in the coming year, and while we can only hope that the ICO will not be the Swan song of one of the oldest manufacturers in the world.