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Overstock’s Cryptocurrency Subsidiary is Now Worth More than the Entire Company

Last Updated March 4, 2021 3:54 PM
Josiah Wilmoth
Last Updated March 4, 2021 3:54 PM

When you visit Overstock.com, you’ll still be met by advertisements for discounted Martha Stewart Rugs and a coupon for an extra 10 percent off already-clearanced bedroom furniture. However, there’s no longer any denying that the firm is not primarily an e-retailer — it’s a cryptocurrency company now.

Cryptocurrency Startup tZero Now Worth More than Overstock

The firm, as CCN.com reported, was one of the first mainstream companies to embrace cryptocurrency — not just blockchain technology in general — and in addition to accepting bitcoin payments, the company has a venture arm dedicated exclusively to blockchain industry investments.

Now, a single one of those subsidiaries — tZero — is worth more than the entire Overstock company, after Chinese private equity firm GSR Capital invested $270 million to purchase a 15 percent ownership stake in the security token exchange operator at a $1.5 billion valuation.

According to the full term sheet, GSR will also purchase 30 million tZero security tokens for $30 million, as well as 3.1 million shares of Overstock common stock for just under $105 million.

Previously, GSR purchased $160 million worth of tZero tokens in June during the startup’s initial coin offering (ICO), bringing the Hong Kong firm’s total investment in the Overstock network to more than $560 million.

Majority of OSTK Valuation Comes from Blockchain: Analyst

overstock tzero cryptocurrency
Source: Yahoo Finance

Overstock shares soared 15 percent on Friday morning following the Thursday announcement, peaking at an intraday high of $48.00 as of the time of writing.

Following that rally, Overstock — whose shares traded below $20 one year ago and have largely tracked with the trajectory of the cryptocurrency market since — now has a market cap of approximately $1.34 billion, a full $160 million less than tZero, of which Overstock subsidiary Medici Ventures in an 80 percent owner.

It’s not a mistake that Overstock, which originally made its mark by liquidating merchandise from failed dotcom startups, has become a proxy stock for the cryptocurrency market writ-large.

According to CNN , D.A. Davidson analyst Tom Forte has said that Overstock’s blockchain investments now comprise about 60 percent of the firm’s total value and that he believes OSTK shares will rise to $112, an almost 150 percent increase from their current level.

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