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]