Online Retailer Overstock (OSTK) Gambles Its Future on Blockchain Tech
Shares of Overstock.com (OSTK) surged more than 23% on Friday after news dropped that the company is planning to sell its retail business in the next few months to pivot to focus solely on cryptocurrency and blockchain technology.
This news comes several months after we reported that Byrne issued a letter to shareholders explaining that he sold 10% of his stock holdings, roughly equalling $20 million, in an apparent effort to reinvest in blockchain projects.
Byrne revealed that he will be investing a majority of the proceeds alongside Overstock and the firm’s blockchain venture capital firm, Medici Ventures, despite the latter firm burning cash since launching in 2014.
According to Overstock’s filings, Medici lost $39 million in the first three quarters of the year, and roughly $22 million last year. Medici’s most notable investment to date has been tZero, a blockchain platform for capital markets, which currently boasts a $1.5 billion implied valuation, a significant monthly burn rate and no token.
“I don’t care whether tZero is losing $2 million a month,” Byrne told the Journal last week. “We think we’ve got cold fusion on the blockchain side.”
Despite the jump to $20.93 on Friday, Overstock shares are still down over 67% this year, leaving the online retailer with a $664 million market cap.
More: Overstock surges 26% after CEO says it will sell retail business by February to focus on crypto
Disclaimer: This article’s author has cryptocurrency holdings that can be tracked here. This article is for informational purposes only and should not be taken as investment advice. Always conduct your own due diligence before making investments.