Online discount retailer Overstock.com (OSTK -5.70%) announced that it has agreed to take a small stake in Kennedy Cabot Acquisition. The 1% stake of the company, which owns the majority of Siebert Financial Corp. (SIEB -2.41%), is being acquired through tZero, Overstock's blockchain subsidiary.
The news pushed shares of Siebert as much as 38% higher before shares gave up some of their knee-jerk reaction. As of 11 a.m. EST, Siebert was trading approximately 18% higher.
This is just the latest in a string of news that has catapulted the stock higher. It was first reported about a week ago that Siebert, tZero, and Overstock had signed a letter of intent to offer discounted online trading, which rocketed the stock higher. Now, the latest news opens up another possibility: using the Overstock brand and Siebert's platform to potentially offer cryptocurrency trading at a lower price than competitors.
According to the press release, Kennedy Cabot Acquisition Holdings CEO Gloria Gebbia said, "It is exciting to team with Overstock/tZERO on connecting the Siebert infrastructure and expertise with the emerging crypto trading ecosystem. We intend to work together with tZERO at the leading edge of the crypto revolution."
In all, Siebert stock has more than tripled in the past week alone, reflecting the excitement surrounding the prospect of offering an ultra-low-cost trading platform, as well as the recently revealed possibility that it could offer cryptocurrency trading at a time when the market for this new asset class is surging.
It remains to be seen whether the Overstock partnership will justify Siebert's stock price jumping so high, but the partnership certainly has the ability to affect the company's revenue in a meaningful way.