SEC Investigation of Overstock Crypto Exchange Grows; Stocks Decline
Stock shares for online retailer Overstock.com have fallen by roughly 30 percent this year. Its subsidiary, tZero, recently announced plans to open a new digital currency exchange, but these plans have attracted some unwanted attention, and an investigation by the Securities and Exchange Commission (SEC) into the blockchain firm is currently underway.
Ongoing Financial Flops
Just last Tuesday, shares in Overstock fell by approximately ten percent, taking its struggles to new levels. The company recently explained that it would be releasing four million new shares for investors to purchase, and that they would be offered through an “underwritten public offering.”
Currently, stocks are trading for just over $39 USD, a drop of nearly five dollars from where they stood just 24 hours ago. Prices are down roughly 37 percent since last October after the company announced further deals in the cryptocurrency and blockchain spaces.
Overstock.com was one of the first companies to officially accept bitcoin as a method of payment. In addition, the online enterprise added more cryptocurrencies to its list of “accepted forms of payments” last September, making it one of the most crypto-friendly major retailers operating today.
Friendship Towards Bitcoin Isn’t Always Rewarded
But it hasn’t all been champagne and caviar. Overstock has been under scrutiny for its recent plans to open a digital currency exchange through its secondary branch tZero. Executives also claimed they hold “a license for an alternative trading system through another acquisition,” though further details have not yet been released.
An investigation by the SEC was launched in late February regarding the company’s sale of digital tokens, and has been underway for the last four weeks. Overstock stated the SEC has requested various “documents relating to the offerings and tokens connected with its investigation” per a recent 8-K filing with the commission.
Is the Future Looking Bleak?
The company has been in a slump since early March. Many speculated the depth and validity of its token offerings, though general interest in cryptocurrencies also seem to be on the decline.
The online business reported that “no significant progress on a potential sale of its retail arm” occurred, which ultimately prevented executives from focusing more on the cryptocurrency-related side of Overstock.
Additionally, Overstock has reported a general decline in sales over the past few months, which may also be contributing to the lack of interest in its blockchain and digital currency ventures.
Do you think Overstock.com will be able to recover? Post your comments below.
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