NBA’s Spencer Dinwiddie Gathers $1.35 Million in Tokenized Contract Sale; Fails to Meet $13.5 Million Target
NBA's Spencer Dinwiddie has managed to sell 10% of his target STO token sale that was set at $13.5 million. The Nets point guard kicked off this sale earlier in the year following the tokenization of his $34 million NBA contract, a process that had initially caused problems with the NBA. With the token sale closing this month, 9 out of the intended 90 tokens have been sold at a value of $150,000 each according to data from Etherscan and Form D regulatory filings.
The NBA star will not get the intended $13.5 million in capital from this token sale, but its mere success to gather $1.35 million. However, the COVID-19 pandemic places Dinwiddie in a better position in new crypto assets within the basketball arena. His first suggestion to tokenize the contract came back in September 2019, a decision that was met with much opposition. It was not until January this year that the Nets guard was able to issue the SD26 Professional Athlete token in collaboration with Tritaurian Capital, which acted as a broker.
As per Dinwiddie's STO framework, he would be able to raise $13.5 million in the capital and, in turn, use it as a business loan. Investors, on the other hand, who are the token holders would, in turn, receive payouts as the season continued. The initiative had since gained traction amongst stakeholders in the crypto and sports world. It, however, did not play out as expected after the COVID-19 pandemic disrupted all games. With only a few games left before the modified playoff, Dinwiddie's token cannot yield as much as anticipated.
Notably, Dinwiddie himself has previously tested positive for the novel coronavirus; in fact, he is not on the restart schedule of the NBA, which is set to resume later in the month. With so much unforeseen risk, the Nets guard token sale seems to have succumbed to the market pressure, hence little activity and capital injection as well. Going forward, more sports STO tokens might debut as reg-d securities, although with the changing dynamics, they may be highly volatile as well.