Beyond (NYSE: BYON) just made a groundbreaking announcement that could reshape the financial landscape. The announcement, which unfolds in three significant dimensions, includes:
- Acquiring global rights to the Buy Buy Baby brand for $5 million.
- Tokenizing part of the Buy Buy Baby intellectual property (IP).
- Developing LifeChain, a platform to unify consumers' financial and digital assets -- including but not limited to birth, medical, financial, and insurance records -- into one secure digital wallet.
The implications of this announcement are profound.
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And I'm not talking about the enhancement to Beyond's portfolio with the Buy Buy Baby brand, which I think is value accretive to shareholders.
Or even the creation of LifeChain, which I think epitomizes a perfect application of blockchain technology and which Beyond is perfectly positioned to put into reality.
The real significance of this announcement for both blockchain investors in general and Beyond shareholders specifically lies elsewhere.
1. Showcasing the Business Value of Blockchain Technology
Traditionally, companies have had three options to raise capital: issuing stocks, incurring debt, or selling assets. Each comes with its own set of pros and cons, such as shareholder dilution, increased financial risk, or potential loss of revenue capacity.
Now, blockchain introduces a transformative fourth option: asset tokenization.
Beyond will tokenize Buy Buy Baby's IP, which means creating the Buy Buy Baby token. The idea is to then distribute a percentage of this token in the form of a dividend to current Beyond shareholders while offering another percentage to new investors to directly invest in it.
Beyond's plan is to make this token intrinsically valuable by sharing with token holders a part of the revenue this brand will generate and offering them loyalty benefits across the Beyond platform.
This unprecedented usage of blockchain technology could trigger widespread adoption. For the first time, a major business engages in this type of capital formation in a regulatory-compliant manner. Once other companies see how this is possible through this example, I imagine it will trigger them to explore potential tokenization of assets like buildings, power plants, patents, brands, or any other asset with value that "sleeps" on a company's balance sheet at a value far below fair value.
Widespread adoption of blockchain technology by businesses might be just around the corner.
2. tZERO Steps Into the Spotlight
Beyond's Medici Ventures assets have received little to no recognition in the public markets. My opinion is that Beyond's stake in at least two of these assets is worth more than Beyond's market capitalization today.
One of them is tZERO, partly owned by Intercontinental Exchange.
This company will spearhead the Buy Buy Baby IP tokenization, ensuring regulatory compliance. Additionally, the token will be available for trading on the tZERO Alternative Trading System (ATS).
According to Beyond CEO Marcus Lemonis, investors interested in the above-mentioned token-dividend must create tZERO accounts. This has the potential to increase user enrollment on the platform right now.
Long term, this has even more potential for tZERO. I expect other companies to take note of this project. Once successful implementation is behind tZERO and Beyond, I expect tZERO to become busy with consulting other companies that think about similar projects.
Eventually, this market has the potential to grow into the tokenization of trillions of dollars' worth of assets in just a few years.
The Bottom Line
Beyond and tZERO are at the forefront of advancing asset tokenization in public markets. Their efforts demonstrate the novel capital-raising opportunities blockchain presents, such as converting intangible assets into tangible ones, improving financial transparency, and enhancing market efficiency. This is merely the beginning. Much more is likely to unfold, benefiting both tZERO and Beyond in this exciting future.
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Bernd Schmid has positions in Beyond, Inc. The Motley Fool recommends Beyond, Inc. and Intercontinental Exchange. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
