How OpenSea Stockholders Are Trading Despite Restrictions

Many secondary market platforms are using SPVs to offer OpenSea stock, as well as shares of other blue-chip startups in the crypto sector, at steep discounts while skirting bans on stock sales.

The popular NFT marketplace OpenSea is reportedly planning to allow its shareholders to sell their shares on a secondary market. According to anonymous sources familiar with the matter, OpenSea’s board of directors has approved the plan to establish a secondary market for its shares, which would allow employees and early investors to sell their shares to new investors.

This move is part of a broader trend among startups and other private companies to enable liquidity for their shareholders without having to go public. By allowing shareholders to sell their shares on a secondary market, companies can offer their employees and early investors a way to cash out their equity while also retaining control over their ownership structure.

How is this possible?

Brokerage platforms are using Special Purpose Vehicles (SPVs), which are unique legal companies created solely to enable secondary market transactions, to get around limits on stock trading.

“Even where a private company restricts trading in its stock, it may still be possible for investors to buy and sell indirect interests in that company’s stock by trading the ownership interest of an SPV that, in turn, owns the private company’s stock.”

According to Nick Fusco, founder and CEO of ApeVue, a data provider specializing in pre-IPO companies.

While the details of OpenSea’s secondary market are not yet public, it’s likely that the company will partner with a third-party platform to facilitate the sales. This could potentially create a new market for OpenSea shares, which could be attractive to investors given the company’s position as a leading NFT marketplace.

Overall, this move by OpenSea highlights the growing interest in secondary markets for private company shares, as well as the increasing importance of NFTs and the broader crypto ecosystem in the world of finance and investment.

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