In March 2018, Kevin O’Leary appeared on CNBC to promote an upcoming ICO that he said would be the first asset-based ICO of its kind. The asset was to be a well-known New York hotel, but an NDA prevented him from disclosing the name of the hotel. O’Leary was expecting to raise $400 million via the ICO, and at the time, Crypto Disrupt made an educated guess as to which hotel it might be.
The article published by Crypto Disrupt stated: “The Plaza was sold by the current US President, Donald Trump when he was close to bankruptcy in 1995 for $325 million. Like many hotels, the Plaza is not owned by a single entity, and in 2017, one owner, who has a 25% stake, said they would not be selling their share.” Following the publication of the article, it was confirmed that it was indeed The Plaza that O’Leary was hoping to sell.
Since the name of the hotel was confirmed, details regarding the status of the ICO have been almost none existent, with the Business Insider suggesting the “deal is falling apart.” The sources that were contacted by Business Insider haven’t given any indication what the problem is other than investors don’t appear to be interested in the deal. There are a couple of possibilities that might be concerning potential investors.
The owners of the 25% stake in the hotel have repeatedly said that they will not sell their minority stake and have a contractual agreement to buy the majority stake if they make a better offer than a potential buyer. The minority stake is currently held by Prince al-Waleed bin Talal of Saudi Arabia and, New York investment and development company, Ashkenazy Acquisition Corporation. The Saudi Prince is said to be worth around $19 billion and one of the world’s greatest philanthropists having donated $3.5 billion to numerous charities. Investors might be concerned that they could spend time and money evaluating the deal and then find that the Prince and Ashkenazy Acquisition Corporation has bought out the 75% stake in the hotel.
The other possibility is that investors are concerned with the mechanics of the ICO and how the SEC might interpret the sale. The SEC considers most ICOs a sale of securities, and it could simply be that O’Leary is still waiting for clearance before he can proceed with the sale.
Financial analyst, smartphone app designer, technical writer, and crypto enthusiast. Blockchain verified graduate of MOOC 9, DFIN-511: Introduction to Digital Currencies, run by the University of Nicosia.