Overstock plans to sell its decades-old retail business in the next few months to make way for a full-blown bet on blockchain.
The previously announced sale plans could go through as soon as February, the company's CEO told the Wall Street Journal in a report published Friday. Overstock founder and CEO Patrick Byrne — an ardent believer in the technology that underpins bitcoin and other cryptocurrencies — declined to name any of those potential buyers.
Byrne founded Overstock in 1999 to sell goods like furniture and jewelry on the internet. He's now betting the future of that brand on multiple blockchain start-ups through its fully owned subsidiary called Medici Ventures.
The Salt Lake City-based company has invested $175 million in Medici, which has been burning money since its 2014 inception: It lost lost $39 million in the first three quarters of the year, and roughly $22 million last year, according to the company's public filings. Overstock itself is in the red, with a net loss of $163 million in the first three quarters of this year.
One of its best-known start-ups tZero, a trading system which hasn't launched commercially, is also burning money.
"I don't care whether tZero is losing $2 million a month," Byrne told the journal in an interview. "We think we've got cold fusion on the blockchain side."
Medici houses start-ups that go well beyond the scope of just cryptocurrencies. One company Voatz, runs blockchain-based voting through a smartphone app while another is working on digital property rights in Rwanda.
Shares of Overstock surged 5 percent in pre-market trading Friday but the stock is down 72 percent so far this year.
While Byrne told investors in a September shareholder letter that Overstock does not "have significant holdings of bitcoin," the share price moves have been tightly correlated. During the cryptocurrency's rise to nearly $20,000 last year, Overstock shares surged more than 400 percent from July through the end of 2018. After trading above $80 in January, the stock is down to just under $18 as of Friday.
Bitcoin itself was trading near $4,200 on Friday, down roughly 80 percent since its high reached in December 2017.
Multiple Wall Street CEOs have denounced bitcoin as a scam or bubble, while Berkshire Hathaway's Warren Buffett famously likened it to rat poison. But its underlying technology is more widely accepted among public companies. IBM, J.P. Morgan, Deloitte, Amazon and Facebook are among those implementing the technology in some way.
Still, skeptics abound on the blockchain side. Global economist Nouriel Roubini, one of the few who predicted the 2008 financial crisis, recently called the technology the most "over-hyped — and least useful — technology in human history."
Read again Overstock to sell retail unit and reportedly go all in on money-losing crypto business by February : https://ift.tt/2DTNs9VBagikan Berita Ini
0 Response to "Overstock to sell retail unit and reportedly go all in on money-losing crypto business by February"
Post a Comment