What happened

Shares of Overstock (NASDAQ:OSTK) closed trading on Thursday up by 6%, but they had been up by as much as 12% earlier in the session. The only newsworthy event of the day that could have directly influenced the stock was a statement from the company clarifying its answers to shareholders' questions about shares of its Series A-1 Preferred Stock.

Here's to anyone who had the luck and impeccable timing to buy Overstock stock at its absolute bottom in March and hold on until now. You'd be hard-pressed to find a better three-month return than this.

OSTK Chart

OSTK data by YCharts

So what

On May 19, holders of Overstock's common stock were issued a digital dividend -- shares of its Series A-1 Preferred Stock. These shares trade on a platform called tZero, which is owned by Overstock. Confused? Don't feel bad. Many shareholders have struggled to keep up with what that means, which has compelled Overstock to attempt to clarify things on multiple occasions. 

On Thursday, Overstock issued another statement about the preferred shares, explaining that they have equal weight to common shares in voting. But they're also eligible for a cash dividend, something common shares don't currently get.

So what if you want to trade the preferred shares? To do that, you need to have an account with a broker/dealer that's subscribed to tZero's alternative trading system (ATS), and not all of them are. Last week, Overstock announced two new broker/dealers had subscribed. One was a company called ChoiceTrade.

The other company wasn't mentioned by name. Overstock only said it was "a multinational, publicly traded investment bank and financial services company focused on institutional brokerage." Unsubstantiated rumors are floating around about this company's identity. However, no matter which company it is, a multinational and publicly traded company is likely a prominent brokerage. It subtly suggests tZero is gaining momentum. 

A businessman rides a rocketship expelling cash exhaust over a multi-colored bar chart.

Image source: Getty Images.

Now what

Overstock's tZero platform is interesting, especially for those who are interested in blockchain technology. However, investors should keep things in perspective. tZero  accounted for just 3% of total revenue in the first quarter, and only 2% of gross profit. In short, while it could be an interesting growth avenue, it's still a very small part of the business.

Editor's note: tZero results are reported on their own line. This article has been corrected. 

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis -- even one of our own -- helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.