Time to Stock Up On ElioCoins
Earlier this year, Elio Motors said it would launch its own cryptocurrency as a way of funding its troubled three-wheeler. During the initial ElioCoin announcement in April, Elio also said it partnered with Overstock.com to relieve some of its debt. The website claimed it purchased $2.5 million of the startup’s newly issued shares.
As helpful as a few million dollars would be toward progressing Elio’s goals, the cryptocurrency plan seemed patently ridiculous. We didn’t expect to hear much more about it.
Color us surprised, though. Elio has now formally launched the pre-sale of the ElioCoin Security Token, noting that Patrick M. Byrne — Overstock.com’s founder and CEO — will be the first person to open up his wallet to participate in this strange new offer.
“This is a watershed moment for Elio Motors,” said company founder and CEO Paul Elio. “Our newest partnerships with Dr. Byrne and other major institutional investors have further crystallized our vision of bringing the Elio to production. We look forward to the launch of ElioCoin and offering secondary trading on tZERO’s security token platform.”
Byrne wrote that he was proud to be the first person to contribute toward the cause and claimed Elio’s vehicle was revolutionary. He also claimed the ElioCoin’s design was “groundbreaking” and “may pave a way for a new era in raising funds to pay for public infrastructure (such as bridges and turnpikes), real estate, and even fund pharmaceutical research (regarding which I have already been enthusiastically contacted).”
After publicly debuting its three-wheeled design in 2015, Elio Motors seemed prepared to upset the manufacturing industry by offering something completely different — despite numerous delays. The company attracted paid reservations from over 65,000 customers who were intrigued by the model’s exceptional fuel economy and extremely low price. However, Elio encountered overwhelming difficulties procuring the funding necessary to start production at its leased factory in Shreveport, Louisiana.
As we’re not experts in digital currency, we only have a cursory understanding as to how all of this works. But here’s what we do know. Like stock, cryptocurrencies typically have an initial public offering (IPO) called an initial coin offering (ICO). What Elio is doing now is the preamble to that. The pre-sale takes place before the tokens are finalized and made ready for the public, with coins being sold to basically whoever the seller thinks should have access. At this stage, that’ll mainly be accredited institutional investors and rich folks.
On the sketchy side of things, these types of deals are almost completely unregulated by the U.S. Securities and Exchange Commission. There’s very little protection for the buyer. However, if everything is done in good faith, there is a chance that pre-sales can help stabilize a new currency before it goes public.
JonesTrading Institutional Services LLC is acting as the placement agent for the pre-sale, which continues through October 15th, with the company reserving the right to extend or terminate the pre-sale at its sole discretion. Units in the pre-sale offering are constituted of ElioCoin tokens and Series E preferred equity convertible at $10 per share. Following the pre-sale, Elio plans to launch a more broadly marketed main sale of the ElioCoin.
The public offering is scheduled to occur sometime in 2019, though Elio hasn’t given a strict timeline and could extend the pre-sale indefinitely. If you’re interested in investing, we’d strongly encourage you to read all the fine print before committing to anything.
[Images: Elio Motors]
A staunch consumer advocate tracking industry trends and regulation. Before joining TTAC, Matt spent a decade working for marketing and research firms based in NYC. Clients included several of the world’s largest automakers, global tire brands, and aftermarket part suppliers. Dissatisfied with the corporate world and resentful of having to wear suits everyday, he pivoted to writing about cars. Since then, that man has become an ardent supporter of the right-to-repair movement, been interviewed on the auto industry by national radio broadcasts, driven more rental cars than anyone ever should, participated in amateur rallying events, and received the requisite minimum training as sanctioned by the SCCA. Handy with a wrench, Matt grew up surrounded by Detroit auto workers and managed to get a pizza delivery job before he was legally eligible. He later found himself driving box trucks through Manhattan, guaranteeing future sympathy for actual truckers. He continues to conduct research pertaining to the automotive sector as an independent contractor and has since moved back to his native Michigan, closer to where the cars are born. A contrarian, Matt claims to prefer understeer — stating that front and all-wheel drive vehicles cater best to his driving style.
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Although I usually hate the term "vaporware" when it comes to describing start-up car companies and their concept cars, there seems to more and more vapor swirling around Elio. This whole idea of cryptocurrencies just sets my teeth on edge. "We need funding for our car..." "I know, let's invent a currency!" If I knew it was this easy I would have invented BlackCloudCoin a long time ago.
Is it really difficult to build a 3 wheel vehicle? It's not nearly the level of sophistication of a Tesla. What is the hold up?