Overstock, an online retail store with more than twenty years of operation, will be sold in order to focus the company's business in the cryptoactive sector. This was reported by its CEO Patrick Byrne, in an interview with The Wall Street Journal.
The sale process of the retail store, based in Utah, United States, could be completed in February 2019. In the report, Byrne describes himself as a “true blockchain believer”, with the conviction that at some point technology of cryptoactives will be fully integrated into commerce.
In 2015 Overstock.com launched a startup that would function as a trading system based on distributed accounting technology, called tZero. The company would be responsible for integrating accounting books distributed with existing processes in the market to reduce time and settlement costs. According to the information on its website, the platform would use a security token to facilitate exchanges and correct the inefficiencies inherent in Wall Street.
However, the report notes that after three years, tZero has not yet launched commercially and is losing millions of dollars a month. Even so, Byrne would be betting on the future of this company and other startups based on cryptoactive technology.
“I do not care if tZero is losing 2 million [dollars] a month,” Byrne told TWSJ. “We think we have a cold fusion on the blockchain side.”
The Initial Offer of Currency (ICO) of tZero, which closed in August of this year, managed to raise 134 million dollars, out of the 250 million that initially aspired to collect. The ICO was under strict supervision of the Securities and Exchange Commission of the United States (SEC), which initiated a review of the process since March.
After the announcement of Byrne, this Friday Overstock shares soared 29%, going from 16.89 to 21.85 dollars. At the time of writing this article, the shares are located at 20.96 dollars, which represents an increase of 23.26% according to the Nasdaq index.
Patrick Byrne founded Overstock in 1997 and started operations in 1999. Initially he sold exclusively surpluses, liquidating the inventories of at least 18 failed “dotcom” companies. Currently, he continues to sell products such as furniture and jewelry on the Internet. In 2014 Overstock.com became the first major retailer to accept bitcoins as a payment method.
Since 2014, Overstock has been investing in its subsidiary Medici Ventures, a wholly-owned company that brings together several startups focused on the development of blockchain projects, including tZero. The report indicates that they have invested 175 million dollars in Medici, a company that reflected losses in the last three quarters for a total of 39 million dollars. The report indicates that the behavior of Overstock shares in the stock market has followed the same trend as the bitcoin price in the crypto market.
Although cryptocurrencies have their detractors, the technology that supports bitcoin seems to have greater acceptance in the world. This week the European Union announced the creation of the International Association for Applications of Trusted Block Chains (International Association for Trusted Blockchain Applications or IATBA). The association will work with organizations willing to develop projects based on blockchain technology.
Likewise, projects based on cryptoactive technology in government services are being implemented, as in the case of Federal Revenue of Brazil. This institution, in charge of taxes in that country, will begin to share tax information with other state institutions, through a platform based on this technology.