Justin Sun, the founder of the Tron platform, has confirmed in a tweet that his company is in preparations to go public on the United States stock exchange. The public listing of Tron will happen through a reverse merger with SRM Entertainment.
Tron To Go Public With a Reverse Merger
Justin Sun has confirmed Tron’s intention to go public on the United States stock market. Tron’s public listing will happen through a reverse merger with SRM Entertainment, a Toy and Souvenir manufacturing company based in Florida.
The deal will be facilitated by Dominari Securities, a New York-based investment boutique firm. SRM Entertainment will be renamed Tron Inc. and purchase the Tron coin, TRX, as part of the reverse merger.
A reverse merger is a process in which a privately held company can go public through the acquisition of an existing company that is publicly traded. It enables the private entity to avoid the customary, cumbersome and costly conventional Initial Public Offering (IPO) procedure.
SRM will issue 100,000 New Shares of Series B Convertible Preferred Stocks according to the terms of the agreement. These are exchangeable into 200 million common shares of 50 cents each. The company will also provide 220 million warrants.
These will enable SRM to purchase another 220 million common shares at the same price of 50 cents/share. In the event that all warrants are used, this will result in a total investment value of $210 million. These funds are expected to be used for TRX purchases to create a large Tron-based treasury.
The merger with SRM Entertainment gives Tron instant access to the market and added credibility, which will further give it immediate access to a wider audience of institutional and retail investors who might not be willing to trade directly on cryptocurrency exchanges.
The news of Tron going public comes four months after the SEC and Sun filed a court motion to pause the lawsuit to explore a potential resolution. The reverse merger is a great way for Tron to go public.
Eric Trump Denies Participation in IPO
Even though it has previously been reported that Eric Trump would be joining Tron as a lead advisor, the former has denied the claims. Eric tweeted saying that in as much as he is the greatest fan of Tron and loves Justin Sun, he has no association with the company.
Tron (TRX) Reacts To the News
The Tron coin, TRX, reacted positively to the news, gaining more than 3% on Monday, per CoinMarketCap. As a result, the price of TRX has climbed above $0.28. This is remarkable, as TRX is the only top 10 crypto with gains this week.
SRM shares reacted more explosively to the news. Monday saw the stock jump over 500 percent to close at $9.19 on a day it started at $1.45.
What This Move Means To the Rest of the Crypto Market
For Tron, its route to going public via a merger with SRM Entertainment could help the company onboard new investors and increase its adoption. However, it is a historic point for the crypto industry.
This step is an indicator of a larger pattern of crypto projects attempting to connect the worlds of decentralized finance and the traditional financial sector. By entering the U.S. public markets, Tron Inc. could pave the way for more projects to enter the traditional finance space and give more exposure to the digital asset space.
