NEO BitTorrent Acquisition For $170 Million Failed Before Tron’s Successful Purchase
The BitTorrent acquisition by Justin Sun, the Tron founder, was one of the newsworthy tech acquisitions this year. However, recent reports now show that the Tron bid was not even the highest one, yet he still won the purchase away from his closest competitor, the billion-dollar blockchain venture Neo.
NGC had submitted a much higher offer of $170 million, which was much higher than Tron’s $120 million bid.
Sun announced that he had purchased BitTorrent for Tron, a blockchain project that he created in 2017 upon leaving Ripple. This purchase marked a significant moment as it was the first time a new crypto firm had successfully bought a well-established company, which was very exciting for Tron investors. Many skeptics at that time speculated that one of the reasons Sun bought BitTorrent was for its massive user base.
History of Competition
While the two companies have explicitly different goals, Neo and Tron have faced off numerous times. Both projects are seeking the chance of staking their claim and becoming the leader in the blockchain market by creating more scalable and faster blockchains. Similarly, both are also competing against Ethereum, which is one of the largest blockchains in the world.
Tron aims to distribute and decentralize internet services. The platform had positioned itself strategically as Ethereum’s alternative, with Sun courting controversy when he tweeted back in April that he had a “better” blockchain project. Similarly, Neo is described as “China’s Ethereum,” and it focuses on digital identity, digital assets, and smart contracts. Tron has a $1.6 billion market cap compared to Neo’s $1.5 billion.
Two Different Bids
Despite their similarities, however, the two blockchain projects didn’t offer BitTorrent a similar deal. Even though Neo put in a higher bid that was higher by up to $50 million as compared to what Tron was providing, the company and shareholders did not find it favorable and therefore accepted Justin Sun’s offer.
A further notable feature helps to shed more light on this peculiar purchase, which is the fact that both of these projects are Chinese-based, which means they also have to face the capital limitations. However, so far, Justin Sun enjoys the support of the Chinese government as the state is pleased for domestic firms to buy Western companies, even though the acquisition process is very long and tedious.
History of the Bids
Sun’s move for BitTorrent was initially to get the controlling stake, but the venture capital company that controlled BitTorrent’s equity, DCM, insisted that Sun buys both the preferred and common stocks. Neo’s NGC firm entered the bidding picture four weeks later and conducted several meetings with BitTorrent and DCM. However, unlike Sun’s approach, Neo sought to be the sole owner of BitTorrent from the onset.