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Online Retailer Overstock.com (OSTK) Stock Increased 8X This Year, Not Because Of Its Core Business

Online retailer Overstock.com Inc. (OSTK) increased more than 14 percent in past week after news of the rise in the bitcoin exchange rate on November 17. As the cryptocurrency activities are just a side business of Overstock.com. On November 24, the stock ended at $66.86.


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Given the fact that Overstock.com is regarded as an online retailer, it also has a division namely Medici Ventures, which has recently invested in tZERO and bitt. Both businesses work in the market for cryptocurrencies, so Overstock.com has also become one of the players in this market.

Bitcoin has risen steadily in price over the last few days, and was surpassing $19 thousand at the November 24 trading. This has raised the interest in sites offering bitcoin transaction, which is also expressed in Overstock.com stocks. This surge, which is not linked to the core business of the firm, is likely to be emotional, and the stock will change again in the near future. It is critical, however that investors view Overstock.com as a diversified portfolio business.

Medici Ventures, or rather its tZero subsidiary, was recently licensed by the Financial Industry Regulatory Authority (FINRA) to operate as a retail broker-dealer focused on the trading of cryptocurrencies, as well as the production and implementation of digital securities. The approval enables tZero to become a retail broker for cryptocurrencies as well as offering capital raising services.

Medici Ventures and tZero have not made a significant contribution to the overall sales of Overstock so far. Although the overall revenue of the company reached $767 million in the past year, tZero and Medici revenues were $12.7 million and $2.9 million respectively.

Overstock.com Inc. (OSTK) mainly operates the business of selling furniture and interior pieces, children’s toys, accessories, etc. In recent years, the business has expanded steadily due to the momentum in e-Commerce and increased interest in home improvement. In the third quarter, revenue from Overstock.com rose by 111 percent year on year. Compared with a loss of $0.89 last year, earnings were $0.5 per share.

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