Overstock Successfully Issues Shares Over the Blockchain
Overstock has always had a forward stance when it came to Bitcoin, being one of the first major retailers to accept the cryptocurrency. Now they have taken it a step further, making history by issuing shares by leveraging the Bitcoin Blockchain.
This was accomplished through Overstock’s subsidiary Medici, which owns 81 percent of tØ, or ‘T Zero.’ T Zero is touted as the world’s first blockchain-based trading platform. The modular and adaptable platform creates an “authenticated, immutable ledger,” and Patrick Byrne hopes to license it to not only other businesses, but use T Zero’s platform to revolutionize stock exchanges, banks, and other financial institutions.
“This offering is historic in that we have successfully issued public securities that exist only on a blockchain,” said Overstock CEO Patrick Byrne.
“In doing so, we have demonstrated to the world that there is indeed a path toward applying blockchain technology to capital markets in a way that complies with regulatory requirements and is accessible and practical for both issuers and investors. In the process, we raised a meaningful amount of capital, which Overstock can use to continue fueling our growth.”
Byrne calls the issuing of shares on the blockchain a “Sputnik Moment.” Not only is it a historical first, but “it demonstrates that we are live.” After having the operation approved by the SEC last December with as much as $6 million spent in legal fees just to make sure it was fully compliant with both the SEC and FINRA, investors are now able to trade the 126,565 shares that were issued over tØ’s blockchain.
With that being said, stock prices for Overstock have been relatively undisturbed, with Overstock shares closing at $17.95 at the time of writing. The news has had a definite positive impact on share prices, especially from the $13.00 low Overstock witnessed in November.
Byrne claims Overstock and its subsidiary are in talks with foreign governments discussing the possibility of launching exchanges using the technology as well. This comes at a time where financial heavyweights such as Goldman Sachs and Banco Santander are withdrawing from R3. Over time, more firms are expected to join the T Zero platform, creating a small but growing ecosystem of stocks that provide transparency for regulators.