Overstock.com, Inc. (OSTK) has reached a new milestone in its efforts to bring Wall Street and bitcoin pioneered crypto-revolution closer. The world’s first trading portal for the exchange of securities on blockchain technology is ready and has been built by Overtstock.com’s majority-owned fintech subsidiary t0. Overstock.com recently announced approval of a non-transferable rights offering by its board of directors which allows its stockholders of record to purchase shares of its preferred stock, including preferred shares to be issued and traded exclusively on a registered alternative trading system using the t0 issuance and trading platform.
Patrick M. Byrne can be called a bitcoin enthusiast. Back in 2014, when no major revenue generators were accepting bitcoin as payment, he decided that Overstock.com, with $1.3 billion in revenue then, would accept bitcoins. Overstock became the first large retailer to accept Bitcoin, going live in January of 2014. While some speculated that the move was merely a publicity stunt, Byrne's keynote address at the Bitcoin2014 conference in Amsterdam revealed that Bitcoin resonated deeply with his philosophical outlook. Subsequently, “Byrne created Medici, a subsidiary within Overstock.com building blockchain-based financial technology solutions. In 2015, Byrne used Medici's t0.com securities trading platform to become the first person in history to purchase a digital bond entirely on the bitcoin blockchain.” (See also, Top 5 US Cities That Accept Bitcoin)
The rights offering by Overstock is primarily to enable t0 to demonstrate its operation, while giving stockholders of record the opportunity to participate. It states, “Overstock intends to offer up to one million shares of its preferred stock, and will give stockholders the opportunity to subscribe for shares of its Blockchain Series A Preferred, which will trade exclusively on the alternative trading system. Stockholders will also have an opportunity to subscribe for an alternative series of its voting preferred stock, which will be economically identical to the Blockchain shares but will trade in the over-the-counter market.” (See also, Could Bitcoin Triumph in a Mr. Robot-like World?)
Investors must own the common stock in their brokerage account as of 4:00 PM ET on Monday, November 7, 2016, which is three trading days before the record date of November 10, 2016 based on T+3 settlement, to be considered for subscription. The press note mentions that “basic and over-subscription privileges may be exercised during the subscription period of November 15, 2016 through 5:00 PM ET on December 6, 2016, subject to proration.”
The t0 technology aims to reduce friction and improve security and ownership rights. “This is the culmination of over two years of true innovation and hard work,” said Overstock CEO Patrick M. Byrne. “Through this public issuance of blockchain-based securities the history of capital markets is entering a new era, the era of blockchain-based securities.”
Overtsock.com reported a revenue of $1.65 billion during FY2015; its shares are up by 19.71% year to date and it has a market capitalization of $372.66 million.
(Market capitalization and year-to-date returns as of October 27, 2016)