Shares of retailer-turned-cryptocurrency company Overstock.com Inc. (OSTK) continue their sharp downturn this year, dropping 15% to close at $37.92 on Tuesday after the firm announced plans to offer 4 million shares of new stock. (See also: Overstock Suffers From SEC Probe into ICO, Q1 Woes.)

The Salt Lake City-based retailer has seen its stock sink over 40% year-to-date (YTD) as investors see risks facing the company from a probe by the Securities and Exchange Commission (SEC) into its cryptocurrency-focused subsidiary's digital token offering. The sell-off reflects investors' growing impatience with the company as it fails to make progress on a potential sale of its retail arm in efforts to double down on its digital currency-related businesses. 

Subsidiary tZero Faces SEC Investigation 

Overstock, which is best known for selling products such as homes goods and jewelry, has been raising funds for its tZero subsidiary, which it calls "the application of blockchain to capital markets or Wall Street." The segment is under investigation by SEC into its initial coin offering (ICO). ICOs raked in over $6 billion in 2017, according to data from financial research firm Autonomous Next, and while some were legitimate, many simply benefited from a worldwide cryptomania that led investors to make ill-informed decisions based on fear of missing out (FOMO). 

Last year, tZero said it would form a joint venture to start a digital currency exchange, while indicating that it had a license for an alternative trading system through another acquisition. Earlier this month, OSTK fell 15% after the firm reported a sales decline and no update on the an alternative for its e-commerce business.

The online retail company said its new common stock would be issued after market closed on Monday. Guggenheim, the sole underwriter, has the option to buy up to 600,000 additional shares in the offering within 30 days, according to Overstock.com. (See also: Bitcoin: Overstock Surges on Morgan Stanley Stake.)

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