What happened
Shares of Overstock.com Inc. (OSTK +1.66%) jumped 11.1% on Friday, continuing a multi-day ascent on momentum surrounding businesses related to the cryptocurrency market. Note that bitcoin, arguably the most well-known cryptocurrency, popped as much as 9% today, setting a new all-time high of almost $18,000.
Overstock has also skyrocketed in recent months -- including a more than 50% jump over the last five trading days -- thanks to excitement surrounding the involvement of its Medici Ventures subsidiary with advancing blockchain, the digital decentralized ledger underlying most cryptocurrencies.
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So what
More specifically, earlier this week, Overstock CEO Patrick Byrne revealed that the company hopes to sell or restructure its e-commerce business within the next two to three months to focus on blockchain technology. In a related CNBC interview, Byrne further insisted he has an "ethical obligation" to shift the company's direction toward a new for-profit joint venture with economist Hernando de Soto, which aims to create a blockchain-based global property registry. In doing so, he says they could change the world for the roughly 5 billion people who are "unable to enter the modern global economy due to lack of visible and standardized property records."
But in the process, Overstock will sell its e-commerce business to either another large retailer, or a private equity investor. At least one multibillion-dollar investment fund has already expressed interest in a deal, according to CNBC.
Now what
Overstock.com has embraced the cryptocurrency market in a way that few other reputable publicly traded companies have. And by effectively distancing itself from the e-commerce retail business for which it was formerly known, it will offer one of the few ways retail investors can take advantage of a possibly massive disruptive financial trend.
At the same time, given the meteoric rise of both cryptocurrency prices and Overstock's shares, investors should be comfortable with outsized volatility -- both up and down -- as the situation evolves in the months ahead.
