Overstock Abandons Share Offering after Price Slump
Overstock.com (NASDAQ:) gave up on Monday its secondary stock offering after the share price lost about 10% for the day to close at $32.85. On January 8, the stock price hit a record high of $86.90, driven by a positive sentiment on cryptocurrencies and blockchain technology. Since then, the value has declined by about 60% after going through several massive sell-offs.
Overstock president Saum Noursalehi said in a statement:
“While we were pleased with the high level of interest shown in our offering, it was intended to be an opportunistic financing. Given the market volatility and price we are terminating the offering. We continue to pursue other strategic options.”
Overstock, which has been betting heavily on crypto assets and blockchain technology in general, saw its stock price fall on March 1 after the company received a subpoena from the Securities and Exchange Commission for its tZero initial coin offering (ICO). The shares lost another 15% two weeks later, when the company reported disappointing earnings for the fourth quarter and the full year.
Last week, Overstock’s share price declined by another 10% after the secondary offering announcement. The plan envisioned the company selling four million new shares, which would have diluted the current outstanding pool of 29 million shares.
The offering was promoted as one of the strategic options considered by Overstock. Given that the company recorded lower retail revenue and losses related to cryptocurrency investments, CEO Patrick Byrne hired Guggenheim Securities to assess options and potential strategies, one of them being the sale of the e-commerce business. Byrne revealed last year that the retail business might be sold to a brick-and-mortar company looking to get visible online. However, Overstock went for a secondary offering.This article appeared first on Cryptovest
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