Please ensure Javascript is enabled for purposes of website accessibility

Why Overstock Jumped More Than 20% Today

By Howard Smith – Sep 10, 2020 at 4:05PM

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

People may be surprised to hear the reason doesn't have anything to do with home furnishings.

What happened

Shares of Overstock.com (OSTK 1.33%) jumped 25% this morning and remain up 9% as of 3:55 p.m. EDT. The gain is related to news on a cryptocurrency subsidiary of the online retailer. 

So what

Overstock has its well-known online retail business, but it also has blockchain and cryptocurrency subsidiaries. 

Computer chip with bitcoin symbol for blockchain technology.

Image source: Getty Images.

Medici Ventures is its blockchain-technology subsidiary with the goal to leverage the technology "to generate efficiencies and increase security and control." Medici has its own subsidiaries, including one called tZero that was set up to trade cryptocurrencies.

tZERO mainly works to promote the development and adoption of digital securities. It announced today that the Financial Industry Regulatory Authority (FINRA) has approved the membership application of tZero Markets to be a retail broker-dealer.

Now what 

The approval allows tZero Markets to become a retail brokerage for cryptocurrencies, as well as allowing for capital-raising services. tZero CEO Saum Noursalehi said in a statement that he expects tZero Markets to begin its services within a couple of months. The company added that "tZERO is a technology firm with the goal of democratizing access to private capital markets."

Medici and tZero aren't yet big contributors for Overstock. The retailer had revenue of $767 million in the latest quarter ending June 30. In that quarter, tZero and Medici contributed additional revenue of $12.7 million and $2.9 million, respectively. 

But adding blockchain technology and cryptocurrency markets to its portfolio has investors thinking that there may be more upside to come. 

Howard Smith 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.

Stocks Mentioned

Overstock.com Stock Quote
Overstock.com
OSTK
$26.59 (1.33%) $0.35

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.