Overstock.com

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Overstock.com
Overstock.png
Founded 1999
Headquarters Salt Lake City, Utah
Key People Jonathan E. Johnson III, Interim CEO; Patrick M. Byrne, Founder and ex-CEO
Employees 1700
Products Online home goods retailer; TZERO and Medici Ventures
Twitter @Overstock
LinkedIn Profile
Facebook overstock
Website Overstock.com
Releases Company News

Overstock.com is an online business that primarily sells surplus wholesale products to retail customers.

Overview

Under the leadership of its founder, blockchain enthusiast Patrick Byrne, Overstock.com owns and operates tZERO and Medici Ventures in addition to being a tech-focused online retailer. Overstock.com is a publicly-traded company whose largest shareholder is Byrne with a 20.2% holding.[1]

Overstock.com was one of the first retailers to accept bitcoin as payment by customers for goods.[2]

With its focus on blockchain technology and bitcoin, Overstock.com shares suffered as the prices for cryptocurrencies receded throughout 2018 losing 21% of their value by August, well before the markets-wide fourth-quarter share price rout.[3]

In September 2018, Byrne told Forbes in an interview that Overstock.com would begin selling bitcoin on its website early the next year using the new Bitsy wallet. Bitsy, which is designed for easy use by Overstock.com's non-tech-savvy customer base, is owned by Medici Ventures.[4]

In November 2018 Byrne told the Wall Street Journal that he has been planning to sell Overstock's retail business, leaving the company with Medici Ventures and tZERO.[5]

On January 3, 2019, the company announced to its investors that it would pay some of its ongoing business taxes in Ohio through that state's first in the nation crypto-payments service, OhioCrypto.com.[6]

Byrne steps down

Byrne stepped down from his roles as CEO and board member of Overstock.com in August 2019 after confirming that he had been in an at times romantic relationship with Maria Butina, a Russian national accused of spying but convicted of a lesser crime.[7]

Byrne's successor, Jonathan Johnson, said publicly that he intended to continue Byrne's pursuit of furthering the blockchain arm of his business. When asked about his attitude towards cryptocurrency, Johnson said, "not only have I drunk the Kool-Aid, I'm drunk on the Kool-Aid."[8]

In late September 2019, after Byrne's departure from the company, Overstock.com was sued by an investor in a Utah federal court for several of its business practices, including CEO Byrne's extensive travel schedule which according to the suit entailed his "spreading his blockchain gospel, despite the fact that Overstock was hemorrhaging cash."[9]

Federal subpoenas

Overstock received two subpoenas from the U.S. Securities and Exchange Commission in December 2019. The first one, dated December 9, ostensibly concerned a deal for Chinese private equity firm GSR to invest in tZERO. In August 2018, Chinese private equity firm GSR Capital announced its plans to invest $270 million in tZERO, giving it an 18% stake in the company. The announcement also said that GSR Capital plans to invest approximately $104.55 million into shares of Overstock.com, which would give the firm a 10% stake in the online retailer.[10] Overstock.com announced, however, on March 1, 2019, that the investment had been delayed until mid-April 2019. The company reported that Makara Capital of Singapore will join the transaction as GSR's partner.[11] Finally, GSR reportedly invested only $5 million[12] According to pres reports, even that amount was not fully paid in by the end of 2019. [13]

The second subpoena from the SEC, dated December 19, asked for information about Overstock.com's insider trading policies. Byrne sold all of his holdings after he stepped down in August and the company publicly reported worse than expected results shortly thereafter.[14]

References