Investors downsize investment in Overstock's tZERO from $404M to $100M

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Patrick Byrne, CEO of online retailer Overstock and security token trading platform tZERO, issued a statement regarding the status of the firms' equity investments. GSR Capital, a Hong Kong-based private equity firm, was supposed to close a $404 million investment in Overstock and tZERO on Feb. 28. The investment firm, however, now appears to have had second thoughts.

In Byrne's statement issued Friday, he states that "the previously-announced GSR equity investment in Overstock and tZERO has not been completed" and that Overstock is in "discussions with GSR Capital and Makara Capital, a key partner of GSR Capital regarding a potential transaction."

Both of these firms have signed a memorandum of understanding outlining an investment of up to $100 million in tZERO common stock. This investment is set to close in April after due diligence and regulatory approval. A $100 million investment is a significant drop from Overstock's initial $404 million investment announcement in which GSP Capital would purchase up to $270 million in tZERO equity, $30 million in tZERO security tokens, and up to $104.55 million in shares of Overstock.com.

Overstock officially launched tZERO on Jan. 24 for security token trading.

AUTHOR

Steven Zheng is a researcher for The Block. He joined The Block in August 2018. Steven graduated from St. John’s University with a degree in economics. Previously, he covered blockchain and crypto at Radicle, a startup analytics firm. He also had brief stints at Cheddar, a media startup, and Bowery Capital, a venture capital firm. He owns bitcoin. Follow Steven on Twitter at: @Dogetoshi

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