Overstock’s Shares Surge After Chinese Firm Announces $270 Million Investment in Its tZERO Subsidiary

Elikem Kofi Attah
  • A Chinese firm has recently revealed it's set to invest $270 million in Overstock's tZERO subsidiary.
  • Reacting to the development, traders helped Overstock's shares surge to over $40.

Overstock (OSTK), a popular online retailer, saw its stock price rise over 20% on August 9. This upward movement was the result of an announcement  from Hong Kong-based GSR Capital’s plans to invest about $270 million in tZERO, a subsidiary of Overstock. Additionally, the investment firm is expected to acquire $30 million worth of tZERO security tokens from Overstock.

tZERO was valued at $1.5 billion, which means the $270 million investment will give GSR Capital ownership of 18% of the Overstock subsidiary. Reacting to the news investors helped Overstock’s stock price go up 4.47%. The stock closed at $41.6 per share on the Nasdaq, according to Yahoo Finance data.

Both parties appear to be satisfied with the incoming investment. Saum Noursalehi, CEO of tZERO, was confident that with its new partners, they will successfully take tZERO and use it to improve capital markets’ efficiency, liquidity, and trust with blockchain technology.

Overstock’s Crypto-Related Strategies

In January, 2014 Overstock became one of the first major companies to accept cryptocurrency payments for its products. In 2017, unlike other businesses accepting bitcoin and other cryptocurrencies as a payment method, Overstock revealed it planned to hold up to 50% of the cryptocurrencies it received.

In a bid to get more involved with cryptocurrencies, the company decided to focus more on its blockchain subsidiaries. Medici Ventures, one of the subsidiaries, is focused on investing in blockchain businesses.

tZERO itself was funded through an initial coin offering (ICO) that raised $134 million from last December to August 6. The goal of the tZERO subsidiary is to create a platform for trading security tokens in an easy and regulatory-compliant manner. With the US Securities and Exchange Commission (SEC) continuously closing in on creators of securities tokens, some believe tZERO’s services will be in high demand.