Overstock Shares Dive 10 Percent On Stock Offering

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Overstock.com saw its shares plunge more than 10 percent on Tuesday after the company announced it was planning to offer 4 million shares of new stock.

On Monday, Overstock revealed that it intends to offer 4 million shares of its common stock in an underwritten public offering.

Guggenheim is the sole underwriter, and can buy up to 600,000 additional shares in the offering within 30 days. D.A. Davidson & Co. is acting as co-manager.

“All of the shares will be offered and sold by Overstock,” the company said in a press release. “The offering is subject to market and other conditions, and there can be no assurance as to whether or when the offering may be completed, or as to the actual size or terms of the offering.”

According to CNBC, Overstock.com was trading at $39.75 on Tuesday morning, bringing the total stock offering to about $158.8 million. Shares are down by more than 37 percent this year.

This is the second time this month that the Salt Lake City-based online retailer’s shares have fallen more than 10 percent. The last time was due to a U.S. regulator requesting information related to Overstock’s planned sale of digital tokens through its subsidiary, tZERO.

Through a regulatory filing, Overstock disclosed that the Securities and Exchange Commission (SEC) asked the company in February to provide information on its token sale. The company seeks to offer tZERO tokens, which buyers and sellers may be able to trade on Overstock’s exchange platform.

The premiere of tZERO marks the first regulator-approved way for U.S. investors to trade cryptocurrency.

“I think it’s an historic event,” Patrick Byrne, chief executive of Overstock.com, has said. “We’re opening a new type of capital market.”

Late last year, the company even indicated it might sell its eCommerce home business to focus on blockchain.

“We now see the possibility of unlocking value in its two most significant assets – its home eCommerce effort and Medici Ventures (portfolio of nine companies that, to varying degrees, leverage the blockchain),” said D.A. Davidson analyst Tom Forte.

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