EOS price surges as Block.one, the developer behind EOS blockchain, is attempting to buy back 10% of its stock whilst offering backers a significant return on their investment.
According to reports over the weekend, the company which is now said to be worth $2.3 billion is offering investors $1500 per share, for shares that were originally being sold for $22.50. This return of over 6500% is unprecedented and has set tongues wagging as to what could be the motivation behind it.
One of the first big investors to part with his shares was Mike Novogratz who parted ways with his Block.one shares in April of this year. The ex-hedge fund manager must be kicking himself now however as at the time he only received a return of 123%.
Other investors that are set to benefit from the deal include Bitmain co-founder Johan Wu, prominent hedge fund managers Alan Howard and Louis Bacon, and PayPal co-founder Peter Thiel. All of them purchased EOS at the time of its mainnet launch back in July 2018.
According to Bloomberg, Howard, Bacon, Bitmain, and Thiel refused to comment on whether they would be selling their shares.
But this is not the first time that Block.one has tried to buy back its shares. The company previously attempted to purchase 15% of its outstanding shares at a price of $1200, but only managed to buy 13.8% at a price tag of $300 million.
These buybacks have been criticised by some commentators including Noc Carter from Castle Island Ventures. He said in a statement that “private buyback of this sort signals to me that the company believes there are a few growth opportunities in sight”. He added that it could also be because the company wants to consolidate ownership and avoid outside scrutiny.
There is much speculation as to why the second buyback in less than a year is taking place, but it could be to do with an email that was sent out last month. With the hashtag #B1June and the tagline “June is Coming”, the email stated that at an event in Washington DC on June 1st “exciting new updates and announcements” would be made.
Some have suggested that they could be set to launch their own social media platform.
A Block.one spokesperson stated that “buybacks are a normal activity for many companies. Block.one is confident of its growth prospects and industry opportunities.”
Block.one is a private company that developed and published EOS. A blockchain-based smart contracts protocol for developing, hosting, and executing tokens, EOS allows DApp developers to build their projects on it and make use of bandwidth, servers and computational power. The platform was launched back in June 2018 as an open source software.
Notably, Block.one holds the world record for the most amount of funds raised during an ICO with a total of $4.1billion after almost a year of fundraising.
On Monday, May 27, EOS price rose by nearly 10% and is currently trading at $7.45-$7.50 on all major cryptocurrency exchanges.