Neo (NEO) Bid Higher for BitTorrent but Lost to Tron (TRX)

3 min read

Tron’s Chinese competitor NEO was also keen on acquiring the torrent giant, BitTorrent. Neo Global Capital (NGC) which is the branch of venture capital for Neo even placed a higher bid of $170 million compared to Justin Sun’s Tron offering $120 million to buy BitTorrent. However, Tron outshined BitTorrent’s trust and gained ownership of it.

According to BitTorrent’s board, they found Justin Sun’s offer more favourable to the company compared to Neo’s outshining offer of extra bucks.

Documents showed that Justin Sun was approached BitTorrent’s main equity controller which was venture capital firm DCM. Justin Sun offered to buy DCM’s preferred stock which was worth 99% of the total store. A total of $90 million to $100 million was offered for DCM’s stake.

Neo went forward a month later and tried to purchase BitTorrent and become the sole owner. $115 million for preferred stock and $55 million for common stock of BitTorrent was offered.

However, NGC was refuted the deal when they revised the offer to exclude a provision that nullified acquisition of BitTorrent if it was not completed in six months. BitTorrent’s board explained the reasons at that time saying, “the risk of the transaction not being consummated due to the projected closing of such proposed transaction being late in 2018 and [NGC’s] primary assets being cryptocurrency holdings, which required an additional foreign currency conversion before the closing of the proposed transaction.”

NGC did not agree to BitTorrent’s version but instead drew on the reason of walking out from buying BitTorrent as BitTorrent was not as advanced for the planned decentralised project.

Justin Sun finally purchased BitTorrent with DCM accepting the offer of $90 million for it’s preferred stock and $30 million on the common stock.

Twitter user, ‘Noble Financial Investment Inc’ simplified the strategy used by Tron in this case scenario by suggesting it’s always better to work with the people who operate the company instead.

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