Overstock To Sell Retail Business As Company Will Become Entirely Blockchain Focused
Overstock will soon be selling its retail business to take a plunge into crypto, despite the digital asset market performing dismally over most of the year.
Though previously mooted by the company’s chief exec, reports indicate that the said sale could materialize as early as February next year. Overstock CEO Patrick Byrne’s latest move further cements his place as one of the biggest supporters of crypto on Wall Street.
Speaking to The Wall Street Journal, Byrne reiterated that whatever happens to its blockchain venture has no impact on their decision to go full throttle into crypto.
Overstock has dabbled in blockchain for a while now, becoming one of the first companies to accept Bitcoin (BTC) in 2014.
At the moment, one of its main projects is blockchain-based tZero, which is unfortunately yet to become commercially available despite burning huge amounts of money.
Developed by Medici Ventures, the blockchain-focused subsidiary of the Salt Lake City-based firm, tZero has cost close to $170 million so far.
On its part, Medici Ventures has also burned hundreds of millions of dollars since its launch in 2014, spending a total of $22 million in 2017 and so far $39 million drained by the third quarter of this year, company’s public filings show.
Overstock, founded by Byrne in 1999, has also been trending in red for much of the year, including suffering a $163 million net loss by September of this year.
Overstock raised about $94 million from its sale of 2.8 million shares in Q3, with each share going for $33. That price has dropped to around $20 from a high of $87 reached in January after rallying over 400 percent from July 2017.
Despite losing millions on the tZero project, Overstock’s financial backup is sufficient enough given it raised over $130 million in their token sale. Byrne believes they are on the right track in efforts to leverage cryptocurrency in the next business phase. He told WSJ:
“I don’t care whether tZero is losing $2 million a month.”We think we’ve got cold fusion on the blockchain side.”
According to Byrne, his company’s move to sell off its retail business and focus on tZero has to do with the belief that the project is a potential “multi-billion dollar” platform.
Overstock’s retail business, including O.co and Worldstock, will be sold in the next two or three months, as revealed by the firm’s chief executive. Although the company has yet to disclose information on potential buyers, the idea is that several mega-businesses would find it profitable to acquire these businesses.
Medici is a critical cog in Overstock’s future blockchain and crypto dealings. At the moment, the investment arm has been busy with a number of partnerships and projects already putting it on the right path.
According to WSJ, Medici supported Voatz, a blockchain-based voting system that was reportedly used in West Virginia to allow overseas military personnel to vote via a mobile app. The firm also backed another project that sought to use blockchain to improve land ownership in Zambia.
While numerous Wall Street CEOs and investors do not have a favorable view of cryptocurrency, quite a good number trust the underlying blockchain technology. Some of the big names that believe blockchain has a future include IBM, Morgan Stanley, Deloitte, Goldman Sachs, and Amazon.
Disclaimer: This is not investment advice. Cryptocurrencies are highly volatile assets and are very risky investments. Do your research and consult an investment professional before investing. Never invest more than you can afford to lose. Never borrow money to invest in cryptocurrencies.