What happened

Shares of Overstock (NASDAQ:OSTK) were flying higher once again on Tuesday, after shares of its digital dividend were distributed. As of 1:45 p.m. EDT, shares of its common stock were trading an impressive 19% higher on the Nasdaq exchange.

While the digital dividend is today's news specifically tied to Overstock, it's also possible the stock is moving higher as investors continue to favor e-commerce companies.

The word Dividends is written on a blackboard, surrounded by financial images

Image source: Getty Images.

So what

Overstock is a majority owner of tZero -- a capital market that many use for trading cryptocurrency. However, it's not limited to cryptocurrency; Overstock's Series A-1 preferred stock trades on the platform. These shares were awarded as a digital dividend to shareholders of its common stock, the one that trades on the Nasdaq exchange.

For every 10 shares of Overstock common stock, shareholders were given one share of the Series A-1 preferred stock. It was distributed automatically today to shareholders as of April 27.

As of this writing, the preferred shares were trading at $10 -- down 33%. However, considering shares of common stock opened today at $15.51, and shares of preferred stock opened at $14.50, the dividend payout ratio was around 9%. It's an unusual dividend that makes an apple-to-apples comparison hard, but that's quite a payout.

Now what

It's possible today's move with Overstock has nothing to do with the digital dividend. Walmart (NYSE:WMT) reported earnings for the first quarter of fiscal 2021 today. Of note to Overstock shareholders is that Walmart's quarterly e-commerce sales grew 74% year over year -- a strong reminder of current consumer-discretionary spending trends.

Remember, Overstock's retail sales in April were up 120% from April of 2019. Walmart's strong e-commerce report is no doubt reminding investors of Overstock's likewise impressive numbers. The question for long-term investors, however, is whether these gains are sustainable.