On January 25, Overstock (OSTK) stock rose 16.3%. The company announced that the secondary market went live for tZERO security tokens. Overstock added that Dinosaur Financial Group will be the introducing broker-dealer.
tZERO CEO Patrick Byrne said, “tZERO is working toward a world where security tokens revolutionize traditional capital markets, and companies achieve trust through cryptographically-protected algorithms rather than through rent-seeking middlemen.”
Overstock’s blockchain initiatives
Overstock is focused on becoming a blockchain company. Blockchain is the underlying technology for all of the cryptocurrencies. Blockchain is a decentralized ledger system where data are visible to the public. As a result, the chances of data tampering are minimal.
Overstock aims to create a blockchain-based capital market. In August, Overstock secured an ~$375 million investment from GSR Capital. In December 2016, Overstock unveiled its first blockchain security offering—OSTKP. In January 2018, tZERO picked KodakCoin as the first offering for its security token platform.
Overstock is trying to sell its retail unit to fund its blockchain efforts through its subsidiaries tZero and Medici Ventures. According to the Wall Street Journal in November, Byrne said that he was looking to sell the retail operations by February 2019.
However, Overstock’s blockchain efforts have raised eyebrows because they aren’t profitable. The Wall Street Journal report on November 23 said that tZero and Medici Ventures were losing money despite being in existence for three years. However, Byrne sounded unperturbed. Byrne said, “I don’t care whether tZero is losing $2 million a month. We think we’ve got cold fusion on the blockchain side.”