Please ensure Javascript is enabled for purposes of website accessibility

Why, Inc. Surged 35% in September

By Joe Tenebruso - Oct 6, 2017 at 9:30PM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

The online retailer is launching a game-changing new trading platform.

What happened

Shares of (OSTK -8.02%) soared 35.3% last month, according to data provided by S&P Global Market Intelligence. Investors cheered the online retailer's new joint venture, which aims to create a trading market for blockchain-based digital tokens.

So what

Overstock's tZERO subsidiary will partner with investment bank Argon Group and financial services firm RenGen LLC on the venture. Together, they plan to launch the first SEC- and FINRA-compliant Alternative Trading System for security tokens issued in Initial Coin Offerings (ICOs).

In its press release, Overstock noted that ICOs have raised more than $2 billion so far this year, demonstrating the rapid growth of this emerging asset class.

"With ICO blockchain offerings surpassing traditional early-stage VC funding and U.S. regulators seeking legitimate venues to support security token offerings ... JV tZERO continues to maintain its leading edge in blockchain financial technology," said Overstock CEO Patrick Byrne.

A metal chain with one flattened link displaying digital address codes

Image source: Getty Images.

Now what

Byrne is an ardent proponent of blockchain technology and the "cryptorevolution," as he calls it. The company began accepting bitcoin in 2014, making it the first major online retailer to do so. Overstock also conducted the first private blockchain bond offering and the first public blockchain stock offering. It recently expanded its accepted payment methods to include all of the major cryptocurrencies.

Yet blockchain-based trading platforms are quite different than Overstock's core online retail operations -- so much so that the company is considering divesting its blockchain businesses, according to Bloomberg. Moreover, Byrne mentioned on the company's second-quarter earnings call that he is open to a merger or buyout of Overstock itself. Thus, investors may not have much of an opportunity to invest in Overstock for long, at least as it stands today. With the stock now up more than 70% on the year, investors may wish to consider booking some gains.

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned, Inc. Stock Quote, Inc.
$25.01 (-8.02%) $-2.18

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning analyst team.

Stock Advisor Returns
S&P 500 Returns

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 07/01/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.