Shares of Overstock.com (NASDAQ:OSTK) fell as much as 12.8% lower on Monday. As of 3 p.m. EDT, the stock had stabilized at a slightly milder 12.5% decline. Several lesser-known cryptocurrencies saw their values dipping roughly 10% lower today, undermining the online retailer's blockchain-based business ambitions.
At first blush, you could argue that Overstock's shares should be rising today. This morning, the company announced a shipping partnership with postage-printing specialist Stamps.com (NASDAQ:STMP), adding an innovative boost to Overstock's e-commerce operations. A couple of hours later, Overstock's blockchain division, Medici Ventures, saw one of its financial technology subsidiaries sign a deal with the governments of Caribbean island nations Curacao and Saint Maarten. In this contract, Overstock's Bitt unit will help the nations develop a blockchain-based digital currency meant to facilitate payments on and between the two islands.
The Caribbean deal put a stop to Overstock's share slide, but the sharp haircut remained. And the only reasonable explanation is a broad plunge among second-tier cryptocurrencies.
Digital coin names like Dash, NEO, TRON, and OITA have been trading roughly 10% lower all day. The crypto markets have been choppy and weak all year long, often dragging Overstock down alongside flagging digital coin values. The trigger news today is more of the same-old, same-old: Saudi Arabia reminding its citizens that cryptocurrency trading is illegal in that country, signs of Indian regulators pushing their cryptocurrency regulations further and further back, and internal turmoil in the IOTA steering committee.
For better and for worse, this is the kind of news that can move Overstock's share prices nowadays. Last week's earnings report showed massive losses, but the stock surged 18% higher anyway thanks to encouraging blockchain news. Today, those gains are all gone. This sword is indeed double-edged.
Anders Bylund has no position in any of the stocks or cryptocurrencies mentioned. The Motley Fool owns shares of and recommends Stamps.com but holds no position in any other stocks or cryptocurrencies mentioned. The Motley Fool has a disclosure policy.