The two-decade-old e-commerce company, Overstock, indicated that it would focus on cryptocurrency and the underlying blockchain technology. The retailer’s CEO, Patrick Byrne, indicated that it is ready to divest its retail subsidiary by February next and will focus on the emerging technology. The company is already having a subsidiary known as Medici Ventures focusing on several startups based on distributed ledger technology (DLT). Incidentally, the announcement got the investors approval with the stock jumping more than 23 percent.
No Potential Buyers
The e-commerce firm has already declared its intention of selling the retail unit and believes that it could go as planned. As far as the possible buyers, Byrne, who is a strong supporter of DLT, refused to indicate any names. The Salt Lake City-based firm is placing its bet on the emerging technology, and asset class as the company has already invested $175 million in Medici. However, it is a different issue that it has been burning cash on the venture since 2014.
After losing approximately $22 million in 2017, Medici has lost another $39 million in the first six-month period. This included tZero, which is best-known startups, offering a trading system though it is yet to be launched for commercial purposes. However, this does not deter Byrne and said that he is not worried about the venture losing $2 million per month. He added,
“We think we’ve got cold fusion on the blockchain side.”
Significantly, Medici is looking beyond the cryptocurrencies since another firm Voatz manages DLT-based voting with a smartphone app. Similarly, there is one more firm that is developing a program on digital property rights in Rwanda. Interestingly, the CEO told investors a few months ago that the company is not having any considerable holdings of bitcoin. However, the price movement is mostly correlated. For instance, the company’s stock surged over 400 percent between July and December 2017.
Currently, it is trading just above $21 levels though it traded more than $80 in January this year. While there are supporters for cryptocurrencies, there are also opponents in the Wall Street like Warren Buffett or Jamie Dimon of JPMorgan Chase. Still, the DLT is extensively accepted by companies like Amazon, Facebook, IBM, Deloitte and J.P. Morgan as they are exploring it for one or the other way.