A Look at Overstock’s Initial Coin Offering Efforts


Dec. 22 2017, Updated 1:26 p.m. ET

tZERO floats ICO

On December 18, 2017, Overstock’s (OSTK) blockchain subsidiary, tZERO, announced a $250 million ICO (initial coin offering). The company is offering SAFEs (simple agreements for future equity) exclusively to company-accredited investors in the pre-sale period (December 18, 2017, to January 18, 2018). In the subsequent sale period (January 18, 2017 to February 16, 2018), other certified investors will be eligible to participate. The security tokens offered will be treated as preferred equity in the company. According to the company, the ICO saw a strong start, as it received more than $100 million from investors in the first 12 hours.

ICOs are unconventional means of raising funds by offering a sale of new digital coins. ICOs have become quite popular with cryptocurrencies’ entry into the spotlight. However, the rapidly growing ICO market has prompted higher scrutiny by regulatory authorities.

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What’s tZERO all about?

Overstock holds a majority stake in tZERO, which has a SEC[1.US Securities and Exchange Commission]-compliant ATS (alternative trading system) for security tokens. The subsidiary focuses on the development of blockchain solutions that aim to bring down financial transaction costs and boost transparency in capital markets.

Overstock retaining 50% of bitcoin earnings

Since August this year, for investment purposes, Overstock has been retaining 50% of its bitcoin earnings, compared with 10% earlier. This change in strategy was a masterstroke, as bitcoin has seen a meteoric rise this year.

With the bitcoin frenzy refusing to die down, many retailers have started to accept bitcoin and other cryptocurrencies as payment. However, major players Amazon (AMZN), Walmart (WMT), and Costco Wholesale (COST) continue to be aloof. If rumors are to be believed, Amazon has bought several cryptocurrency domains, which could mean that the giant is prepping for a foray into the cryptocurrency arena. In the next part of this series, we’ll discuss Overstock’s partnership with Siebert Financial and acquisition of a 1% stake in Siebert Financial’s parent company, Kennedy Cabot.


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