What happened
Shares of Overstock.com (BYON 0.35%) rose just over 13% at one point during trading on Nov. 17. By 3:30pm EST or so they had given back a little of that gain but were still holding on to an advance of roughly 10.5%. And it had nothing to do with this online retailer's retail business.
So what
Although best known for selling discount products like furniture on the internet, Overstock has branched out into a number of different areas through its Medici Ventures division. While this business isn't the driving force at Overstock, its tZERO and bitt investments have taken a more prominent role at the company in 2020. Management even features these two investments prominently in quarterly earnings updates. Both bitt and tZERO are involved in cryptocurrencies and, for some investors, that has made Overstock something of a play on the cryptocurrency space.
Image source: Getty Images.
Cryptocurrency bitcoin rose past the key price level of $17,000, putting cryptocurrency investors in a broadly positive mood. Some industry watchers have suggested that it could make a run for its all time highs around $20,000. The enthusiasm over this advance spread to related companies, which includes Overstock through the above noted Medici investments.
What now
Long-term investors shouldn't read too much into Wall Street's enthusiasm for Overstock shares today. Cryptocurrencies, notably bitcoin, have been notoriously volatile in their short existence. In fact, the last time bitcoin was up in the $20,000 space in December of 2017 it quickly turned around and lost 70% of its value. Additionally, while Overstock's Medici investments are interesting, at the end of the day they are really just a side business and not the core of the company's operations.
