Losses Due to Change in Strategy, Says Overstock’s CEO
After the disappointing figures reported in their fourth-quarter earnings for 2018 published on March 18 2019, Overstock’s CEO has said that there will be a big change this year, and that the tZero platform is still promising.
Overstock’s foray into blockchain has been a rather impressive one and made headlines when it was announced last year. Since then they have expanded their efforts into projects like land registration.
Its first year of operation wasn’t smooth, despite the fanfares surrounding the tZERO platform. This was recently revealed via Overstock’s earnings report for the last quarter of 2018, published on March 18 2019.
While the earnings report shows significant losses for the Canadian online retail giant, their CEO has stated that this will be corrected in the near future.
Taking Stock of Losses
A quick look at the earnings report shows a revenue of $452.5 million versus the $456.3 million in the fourth quarter of 2017 and representing a 1 percent decrease. They reported a gross profit of $81.6 million versus $85.8 million made in the fourth quarter of 2017, which is a 5 percent decrease. The net loss for their retail arm was $27.7 million, which is an increase of $10.1 million compared to the fourth quarter of 2017.
Their CEO, Patrick M. Byrne, explained the losses in a letter to investors by stating that they were due to a change in company strategy. Overstock decided to take a risk on e-Commerce business but eventually reverted after experiencing the losses.
Promising a positive operating cash flow of at least $10 million in 2019, he said:
“Our retail arm lost money last year because I gunned things in an attempt to create a conventional high-growth/money losing e-commerce business, but the losses were nauseating and we reverted back to the philosophy of profitability on which we built Overstock,”
As for their Blockchain arm tZero, Byrne has stated that he still has faith despite the setbacks. The setbacks included $12.6 million in pre-tax losses.
According to him, tZERO is one of the best platforms in the world with cutting edge projects that are about to be introduced to the public. He also touched on tZERO’s achievements, which includes a security token trading platform.