Overstock Brings Blockchain to Wall Street; Acquires SpeedRoute for US$30.3 Million
American online retail giant Overstock has acquired SpeedRoute LLC brokerage firm that currently handles approximately 2.5% of U.S. equity order flow for US$30.3 million, with an aim to disrupt Wall Street with a decentralized settlement system platform called TØ.
The acquisition, which consists of approximately $11 million in cash and 900,000 shares of Overstock’s common stock valued at $19.3 million, was settled directly between SpeedRoute LLC and Overstock’s crypto subsidiary TØ. All related privately held financial technology companies under SpeedRoute LLC are set operate under the management of TØ.
“This collaboration allows Overstock to enter this new financial technology arena with a speed and aggression that I believe will revolutionize Wall Street, while adding an already profitable and cash-flow positive business right to Overstock’s bottom line. The winners are going to be investors and regulators alike,” announced SpeedRoute CEO Joseph Cammarata.
Together, Overstock and SpeedRoute will begin to provide a cryptoledger foundation for its investors, and will revolutionize finance by offering cyrptosecurities or cryptobonds, which Overstock CEO Patrick Byrne has begun to supply since June 6.
“According to Karl Marx, ‘The philosophers have only interpreted the world. The point, however, is to change it.’” said Byrne. “The acquisition of SpeedRoute brings to fruition the idea behind t0.com: making financial markets more fair and efficient through the application of crypto technology. Together, we can revolutionize finance across the globe by providing for it a cryptoledger foundation that is immune to the various forms of risk and mischief that are embedded in our current system.”
Overstock first offered the company’s corporate bond as cryptosecurities on June 6, on their decentralized settlement system TØ. The goal of TØ was to allow investors to purchase shares and bonds instantly, by settling the transactions securely on the same day “as opposed to three days later — or what Wall Street traders refer to as ‘T+3.’”
The advantage of investors trading on a platform like TØ is the transparency of the trades. Investors are given the ability to track down their stocks on the block chain.
At the time, Overstock offered US$25,000,000 TIGRcub bonds, or Top Line Income Generation Rights Certificates, as crypto securities, issuing “25 one-million-dollar digital tokens” that will be traded on the alternative trading system.
This time, Overstock plans to do the same, but on a bigger scale.
“Basically, it’s the wormhole. It’s the connection between the two universes. All the stuff we’ve built can now be accessed directly by people with a Bloomberg terminal, people with an eTrade account,” Byrne told the New York Business Journal.
Cammarata added, “This merger combines vision with market-leading trading technology and infrastructure that is already accepted across the industry, creating the opportunity for a quantum leap in securities trading and settlement processes.”