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Overstock.com Inc (OSTK) Loses Even More in Value; Ghost of SEC Investigation Could Haunt tZero Initial Coin Offering


Overstock.com Inc (NASDAQ:OSTK) shares are facing a 10% beating in trading today following news of heat from the SEC- along with a less-than-stellar fourth quarter earnings show delivered just yesterday evening. For a company that has benefited from crypto buzz, the online retailer’s team now fears the threat of a U.S. SEC probe that could put a dent in business dealings- while delaying the initial coin offering for tZero.

“The investigation could result in a delay of the tZero security token offering, negative publicity for tZero or us, and may have a material adverse effect on us or on the current and future business ventures of tZero,” the company said in a filing late Thursday. Likewise, the company revealed the SEC is conducting an examination of advisers at the firm’s blockchain subsidiary tZero- the very team in charge of the ICO.

Ever since September’s reveal that OSTK was eyeing a digital-token exchange, the company has drawn quite a rising bearish camp circling shares. Close to 45% of the company’s shares available for trading are thanks to short seller interest, by the estimation of financial analytics firm S3 Partners. Considering that the first of September this number was merely roughly 13%, this marks a substantial jump in short interest.

At the start of this month, the tech player first revealed this SEC probe was at play, explaining it had been requested to voluntarily offer details behind its plan to offer tZero tokens. Ever since, OSTK has plunged roughly 25% in valuation, with investors continuing to run for the hills.

Chief Executive Officer Patrick Byrne likewise captivated attention yesterday after vying to follow what he deems a “classic internet” model of growth with Machiavellian-fervor- no matter the cost. Considering OSTK posted $456 million in its fourth quarter, a noted 13% fall from the same time in 2016, it is no wonder Byrne is ready to do whatever it takes to get his company back on track.

“We have already turned on the jets, and will demonstrate this year that our growth engine is far more efficient,” concluded Byrne in a press statement, in regards to rivals.

Analyst Ratings

According to TipRanks analytics, early word in the last 12-months points to the bulls on OSTK’s market opportunity. Tom Forte of D.A. Davidson rates a Buy on OSTK with a $100 price target and Anthony Vendetti of Maxim likewise rates a Buy on the stock with a $25 price target.