Overstock.com Q2
(Source: cnbc.com)

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(Original link: cnbc.com)

Consolidated revenue of $483 million (12% growth) and pre-tax loss of ($65.9) million
SALT LAKE CITY, Overstock.com, Inc. (NASDAQ:OSTK) , a tech-driven online retailer and advancer of blockchain technology, today reported financial results for the quarter ended June 30, 2018.
Dear Owners,
Recently an investor lamented to me that Overstock is among the most difficult-to-value stocks on Wall Street. While that is regrettable, I have always tended to be less concerned with making valuation easy and more concerned with building value in the firm for you, its owners. However, we have reached a crucial juncture in our firm’s history and it is becoming increasingly important to elucidate the different parts of our business and their potential value. As a result, this letter and the accompanying earnings webcast will be unusually informative (I encourage watching the webcast over just reading the transcript because of the numerous visual aids therein).
In preparation for that call, here are a few highlights on tZERO, Other Medici, and Retail, before I dive deeper on each of these in the letter that follows:
tZERO (owned 80% by our blockchain subsidiary Medici Ventures) has: closed out its Security Token offering raising $134 million in aggregate consideration (this sum includes $30 million from repayment of intercompany debt between tZERO and Overstock: GSR has signed a repurchase agreement to acquire these tokens) obtained a term sheet agreement from GSR to purchase from tZERO up to $270 million in tZERO equity at a $1.5 billion post-money valuation; and secured a term sheet agreement from GSR to purchase up to 3.1 million shares of OSTK for $104 million ($33.72/share August 1 st closing price less 5%)
We will provide thorough descriptions of these agreements in our 10Q.
Other Medici Ventures : We are increasingly enthusiastic about blockchain and Medici Ventures’ unique position in the field. In addition to tZERO, we have funded 13 blockchain projects within Medici Ventures, with Jonathan Johnson ably overseeing their build-out. We believe at least one or two of those companies (perhaps more) have tZERO-like potential. Beyond that, we have accumulated a valuable core blockchain development group of approximately 30 (this is in addition to the 11 that Medici recently transferred to tZERO, and to the many dozens who create within the firms which we have helped fund). When it comes to the world of crypto, I am well-traveled, and can assure you that it is an unusually large, strong group of blockchain talent in and around Medici Ventures.
Retail : The strategy adopted earlier this year of running our retail site like a conventional internet firm has produced a 25% revenue acceleration (from -13% in Q4 to +12% in Q2). Yet the marketing and price testing that fueled that growth has come at a significant cost ($57 million in Q2). Significant dilution always accompanies a growth ecommerce strategy, and, given the rapidly growing value of our non-retail assets, we think shareholders are better served now by a cash-conservative strategy. I believe Overstock can focus on developing more non-traditional means of growth and profitability, something that has been a hallmark of our success over the years. As a result, we recently reverted to a retail strategy that has narrowed these losses significantly in the month of July and will narrow them further this quarter and again next.
I once worked as an equity analyst at First Manhattan under the tutelage of two wonderful gentlemen, Sandy Gottesman and Arthur Zankel (RIP). I often think of, given my current bird’s-eye view of what is going on within Overstock, what I as an analyst looking at Overstock might have expected by way of disclosure. As I indicated above, now is a particularly appropriate time to be sure that all cards are laid on the table. So, I will expand on each of the preceding points at length.
I. tZERO:
tZERO is a leader in the emerging field of Security Tokens. Briefly, Security Tokens are smart contracts embedded within blockchains that represent fractional ownership of assets. Collectively, there is the better part of a quadrillion dollars of fractional ownership around the globe represented in various securities instruments: approximately $73 trillion in stocks, $215 trillion in debt, and $217 trillion in real estate, for example. In the eyes of an increasing number of people, Security Tokens are disruptive to all these instruments and the ecosystems around them because the technology of Security Tokens provides a more secure, efficient, and transparent way to represent fractional ownership in assets. However large proves the disruption that Security Tokens brings to those instruments, such tokens are going to need a vehicle for issuance and a place to trade. That is what we have built in tZERO. We believe tZERO is the best positioned firm on the planet to serve as a marketplace for this coming wave of Security Tokens for the following reasons:
Regulatory adva...

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