Overstock Shares Zoom, Blockchain tZero Subsidiary Soars After $375M Investment

Blockchain, Investing, News | August 9, 2018 By:

Online retailer Overstock will get a $375 million investment from Hong Kong’s GSR Capital. In exchange, GSR will get equity in Overstock and its tZero blockchain subsidiary.

Overstock stock’s soared in after-hours trading when the news broke.  GSR agreed to buy 30 million in tZero tokens; buy up to 3.1 million shares of Overstock for $104 million; and invest as much as $270 million for up to 18% of tZero’s equity.

The investment means that tZero is worth more than the entire parent company.

“Having concluded its Security Token offering, tZERO has raised aggregate consideration of $134 million,” said CEO Patrick Byrne. “This figured includes $30 million from repayment of intercompany debt between tZERO and Overstock. GSR has signed a repurchase agreement to acquire these tokens. As I will diagram in our earnings call, we have designed quite an ecosystem with a scale that matches the enormous opportunity in front of it. When GSR completes its planned investments, we should have over half-a-billion dollars. We believe this will provide ample capitalization with which to build a company that can upend global capital markets.”

Overstock was an early advocate of cryptocurrency as a retail payment tool.