Overstock Blockchain Unit Sees $270M Investment

Private-equity firm GSR Capital is investing up to $270 million in Overstock.com’s (OSTK) blockchain subsidiary tZero.

Shares of the e-commerce retailer were up more than 20% in pre-market trade Friday.

Hong-Kong-based GSR Capital is also buying $30 million in tZero security tokens. tZero is 80% owned by Overstock’s Medici Ventures. Overstock launched tZero digital currency through an initial coin offering (ICO) late last year. (See also: Overstock Goes ‘All In’ on Bitcoin.)

"We are honored to have GSR Capital as a strategic investor," said tZERO CEO Saum Noursalehi in a statement. "The tokenization of securities has the potential to disrupt global capital markets responsible for moving hundreds of trillions of dollars. Together with our partners, we will globalize our blockchain-based platform, bringing more efficiency, liquidity, and trust to capital markets."

tZero plans to use the investment funds to complete its blockchain platform and construct similar platforms around the world. (See also: Overstock Shares Tank on ICO Probe, Stock Offering.)

Overstock Q2 Results

Late Thursday, Overstock reported second-quarter revenue of $483.1 million, up 12% from a year prior. Gross profit was $91.7 million, up 9% from the second quarter in 2017. The net loss was $64.9 million versus $7.5 million last year. Diluted net loss per share was $2.20 versus $0.29 last year.

In the past year, shares of Overstock have surged 112%.