In an obvious act of desperation, Overstock will sell its retail business to launch a crypto business called tZero.
Overstock CEO Patrick Byrne is so certain about blockchain technology that he’s planning to sell Overstock’s retail business to launch tZero.
Byrne announced tZero in 2015 and it has been losing money ever since, along with everything else Overstock does.
> Overstock has invested $175 million in a fully owned unit called Medici Ventures Inc. that houses tZero and a collection of startups developing new uses for blockchain technology a method of recording, sharing and securing data over public computer networks that underpins bitcoin and other cryptocurrencies.
> One startup is working with the Rwandan government to develop a digital property-rights platform. Another, Voatz, ran a blockchain-based pilot with West Virginia that allowed military personnel serving overseas to cast their votes in the midterm elections through a smartphone app.
> Mr. Byrne’s quest has been costly for Overstock. Medici lost $39 million through the first nine months of 2018, following a $22 million loss in 2017. (All told, Overstock lost $163.7 million through the first nine months of 2018.)
> Overstock shares also have suffered. In 2017, the company’s stock traced bitcoin’s mania, rising from $15 in the summer to nearly $87 by January 2018
Overstock Losses
Cold Fusion
“I don’t care whether tZero is losing $2 million a month,” Mr. Byrne said in an interview. “We think we’ve got cold fusion on the blockchain side.”
Byrne declined to name potential suitors, but expects to wrap up a deal by February.
> He envisions a platform that would trade assets that could be easily traced and tracked. Initially, it would trade security tokens—a combination of a bitcoin-like digital token and a traditional bond or stock. It is also developing a product called digital locate receipt, a way of tracking equities borrowed for short selling.
