Overstock shares jumped as much as 21 percent after the retailer announced that Hong Kong private equity firm GSR Capital is investing up to $270 million into Overstock’s blockchain subsidiary tZERO.
As part of the deal, GSR Capital will also purchase $30 million in tZERO Security Tokens.
“We are honored to have GSR Capital as a strategic investor,” tZERO CEO Saum Noursalehi said in a press release. “The tokenization of securities has the potential to disrupt global capital markets responsible for moving hundreds of trillions of dollars. Together with our partners, we will globalize our blockchain-based platform, bringing more efficiency, liquidity, and trust to capital markets.”
As part of the term sheet agreement, GSR Capital will purchase up to 3.1 million shares of OSTK common stock at a five percent discount to the closing share price as of August 1. GSR Capital will also invest up to $270 million for up to 18 percent of tZERO’s equity at a valuation of $1.5 billion (post-money).
“GSR Capital has the prescience to understand the disruptive power of blockchain capital markets,” said Patrick M. Byrne, founder and Chairman of tZERO, and founder and CEO of parent company Overstock.com. “They are aligned with our vision for the future of capital markets built upon the speed, trust, and security of the blockchain. And most importantly, they think big, and want to help us scale this vision globally as quickly as possible.”
Overstock became the first major retailer to accept the cryptocurrency in 2014. In June, Overstock CEO Patrick Byrne said that he believes that blockchain might be the world’s greatest hope in ending global poverty, and he is looking for suitors who may be interested in his new venture with world-renowned Peruvian economist Hernando de Soto Polar to end poverty with blockchain technology.
“Hernando and I intend to use blockchain technology to empower and enfranchise the 5 billion people who live outside formal economies within five years,” said Byrne.
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