Please ensure Javascript is enabled for purposes of website accessibility

Why Shares of Are Up Today

By Lou Whiteman - Apr 24, 2020 at 2:18PM

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

Investors are getting excited about the upcoming digital dividend.

What happened

Shares of (OSTK -3.39%) soared more than 25% on Friday, despite no apparent company news. Such moves are commonplace for, a major battleground stock for shorts and long-term holders, and even with the impressive gains Friday, Overstock shares are still below levels hit earlier in the week.

OSTK Chart

OSTK data by YCharts.

So what has long been a controversial stock, and the company, of late, has been focused on its soon-to-be-issued digital dividend designed to help validate its blockchain technology. Former CEO Patrick Byrne had argued the digital dividend could over time become more valuable than the company's Nasdaq-traded shares because it would be less susceptible to short-seller attacks.

A secure cloud illustration.

Image source: Getty Images.

The merits of the plan are debatable. But for those who do believe in it, the progress toward issuing the dividend, which will be tradable on Overstock's affiliated tZero blockchain platform, is a positive. tZero announced earlier in the week that Hong Kong-based private equity firm GoldenSand Capital has completed a $5 million investment in the platform.

Now what

Overstock investors are focused on the digital dividend in part because the company's core retail business has had its share of troubles in recent quarters. The company also remains the subject of inquiries from the Securities and Exchange Commission.

This is one of the most volatile stocks around, and owners of the shares have grown accustomed to riding the roller coaster. New investors tempted to climb on board based on the impressive Friday gains should be warned that if history is a guide, the turbulence is likely to continue for the foreseeable future.

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.
$29.10 (-3.39%) $-1.02

*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 06/28/2022.

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.