Overstock announced yesterday that it would be doing away with its retail business in early 2019 and pivoting to investing in blockchain-based startups.Overstock’s stock price reacted favorably to the news, jumping by more than 30 percent on the day. The nearly-20-year-old e-commerce giant rose to success in the heyday of the Dotcom boom in the early 2000s and was one of the first major retailers to accept Bitcoin as payment in 2014. CEO and founder Patrick Byrne, an early and open supporter of Bitcoin and blockchain adoption, announced this past Friday the company’s intentions to sell off its existing retail arm. The company will then concentrate its focus and resources on its blockchain advancement subsidiary Medici Ventures — also founded by Byrne. The deal is planned to go through in early 2019 and could happen as soon as February, although no specific information has been released in regard to the sale of the retail company. [bctt tweet=”Overstock has traditionally sold items relative to home decor, jewelry and apparel in its online marketplace, but in the past few years have been shifting its investments heavily into the acquisition and development of blockchain startups like tZERO and Factom. ” username=”beincrypto”]
Overstock shares jump more than 20% after PE firm agrees to invest in blockchain subsidiary. https://t.co/THy73hsuen— CNBC (@CNBC) August 9, 2018
Overstocked and UnderperformingOverstock’s share prices have been suffering in 2018. Since attaining a new all-time high in January of $84, the stock has plummeted to just $17 last week. Interestingly enough, the price of Overstock shares coincides quite closely with the price of Bitcoin since 2013 when using the price history from the Bitfinex exchange. In the past year, the price movements have matched up nearly identically — Bitcoin (BTC) down 78 percent from its January all-time of $20,000 while Overstock lost 80 percent in the same time frame. The Overstock news released yesterday created a surge in its share price which briefly touched $22 — an enormous 33 percent gain for the day. There are some who are questioning Overstock’s decision to abandon retail and enter a super volatile and emerging market — especially in a bear market. It is a decision, however, that could be a positive signal in the cryptocurrency market that the current prices are near bottom levels and that interest from large-scale institutions and investors is growing. What are your thoughts on Overstock’s new plan to focus on blockchain businesses? Do you think Overstock is making its big move into blockchain at the most advantageous time? Let us know in the comments below!
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