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Why Overstock Shares Soared 46% in May

By Demitri Kalogeropoulos – Jun 3, 2020 at 8:26AM

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Investors got a few pieces of good news about the business last month. But can the growth continue?

What happened (OSTK -0.04%) shareholders dramatically outperformed the stock market last month. The stock rose 46% in May compared to a 4.5% increase in the S&P 500, according to data provided by S&P Global Market Intelligence.

The rally erased significant losses in March to push the stock far higher for the year -- up over 200% since the start of 2020.

A delivery man drops off a group of packages at a home.

Image source: Getty Images.

So what

Overstock, which runs both a home-furnishings e-commerce site and a cryptocurrency platform, captured investors' attention on both fronts last month. Its home supplies site saw sharp demand growth thanks to a dramatic shift in consumer spending toward that category amid social distancing orders. Shareholders also applauded a significant dividend distribution through its tZERO cryptocurrency trading platform.

Now what

The stock's long-term returns will depend on management's ability to retain many of the new home furnishings customers it won over the last few months once its physical-store rivals reopen their businesses. Investors will get a better idea about that prospect, and about Overstock's latest growth trends, when the tech company holds its annual shareholder meeting on June 10.

Demitrios Kalogeropoulos has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

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