Overstock.com, which is the first major retail company to accept Bitcoin as a payment may be facing serious problems and its future is uncertain. The company decided to sell to pull out its secondary stock offering due to the constant falling in share price. Overstock.com CEO Mr. Patrick Byrne recently said that he is considering and contemplating selling the retail giant.
Byrne is known for his enthusiasm for cryptocurrencies and blockchain since the initial days of the virtual currencies and has built a strong reputation among crypto members around the world. As a pioneer in such a space, what has led to things to develop in the manner which they have that the future of the company remains unclear.
The relationship that Overstock had with Bitcoin
The partnership that brought together Overstock to accept bitcoins was a partnership that was struck with Coinbase in 2014.
“We were the first. The largest company accepting Bitcoin then was a $800,000 a year restaurant diner in Western Australia. We stepped up and started taking it- we were $1.4 billion. So I like to think we saved that community about five years in their adoption cycle.”
“When I first heard Bitcoin it reminded of my feelings about called,” recalls Byrne.
Due to his popularity since 2014, Byrne became a prominent person in the crypto world and this led to Overstock shares to rise tremendously over a short period of time. A good example is when its stock rose almost four times between July and December of 2017 as a time when bitcoin was growing.
In January 2018 bitcoin shedded 50% of its value in just a period of one month and this affected companies such as Overstock which had its valuation fall to around 11% and ended with a value of around $1.8 billion.
Byrne also admits that bitcoin used only a fifth of 1% of all Overstock sales and never anticipated the share to be significant due to the fact that he wanted his technology team to get familiar with cryptocurrency and technology itself.
In 2014, Byrne launched a venture capital firm within Overstock called Medici Ventures that uses company’s money to invest in startups in the blockchain field. The common Overstock subsidiary is tZero which helps in eliminating brokers and compete with traditional stock exchanges and this is something that Byrne had wished for years back.
“If you have a stock brokerage account and call your broker you’re paying 15 dollars to execute a trade. That 15 dollars is feeding a lot of mouths all through the plumbing can be eliminated and you have a much simpler system that is robust and 80 or 90% cheaper. And, most importantly, all kind of mischief that goes on in Wall Street can’t go on here”
Overstock shares jumped almost 20% last fall when the company announced plans that it was going to develop an Initial Coin Offering (ICO) trading platform. Even though the company has been report some good results in certain sectors, it can now be seen clearly that the giant retail company’s future is unclear.