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Why Overstock Fell 31% in December

By Demitri Kalogeropoulos – Updated Apr 14, 2019 at 9:49PM

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The stock continued falling along with cryptocurrency prices last month.

What happened

Overstock (OSTK 7.17%) lost to the market by a wide margin last month, plunging 31% compared to a 9% slump in the S&P 500, according to data provided by S&P Global Market Intelligence.

The decline closed out a brutal year for shareholders as the stock shed nearly 80% of its value during 2018.

So what

Overstock's painful year was powered in part by a struggling e-commerce retailing operation that lost ground to established rivals like Amazon and to upstarts including Wayfair. The company attempted a new strategy of cutting prices and boosting advertising spending, but the initiative only resulted in mounting losses while doing little to increase market share.

Chart showing prices of cryptocurrencies.

Image source: Getty Images.

Overstock made increasingly aggressive bets on blockchain technology in the meantime, and collapsing prices for cryptocurrencies added to investors' dour reading on the stock. Bitcoin and other currencies continued their decent last month, pushing shares even lower.

Now what

CEO Patrick Byrne and his team are looking into selling the retailing part of Overstock's business to focus on the blockchain segment through its Medici Ventures subsidiary. That move would free the company of its struggle to regain market share momentum in a brutally competitive industry. It would also ensure much more volatile earnings -- and perhaps significant losses -- in Overstock's business going forward.

Check out the latest Overstock earnings call transcript.

John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool's board of directors. Demitrios Kalogeropoulos owns shares of Amazon. The Motley Fool owns shares of and recommends Amazon and Wayfair. The Motley Fool has a disclosure policy.

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