Overstock's blockchain stock offering was a success, raising $10.9 million

Online retail giant Overstock.com has successfully closed its first round of fundraising via a first-of-its-kind fundraising method: issuing shares on a blockchain.

The stock offering raised a total of 1090万美元, of which $1.9 million came from traders on tØ blockchain platform developed by Overstock subsidiary Medici.

This round of fundraising was divided into two parts: 126,565 shares in the tØ blockchain platform and 569,333 shares in the other platform using traditional technology, both priced at $15.68 per share. Overstock originally planned to issue 2 million shares with a target amount of $30 million.

Stocks traded on a blockchain platform can be settled in real time, while investors who choose traditional exchanges have to wait three days for post-trade processing. Blockchain stocks can also prevent third parties from intervening in transactions, after all, they are not the stock holders.

Johnathan Johnson, President of Medici and Chairman of Overstock’s Board of Directors, said:

Overstock has demonstrated that stocks issued and traded on a blockchain can be settled in real time, so other companies should try this type of system if given the chance.

The tØ blockchain platform’s stock trading hours are aligned with Nasdaq, starting at 9:30 a.m. Eastern Time (ET) and ending at 4 p.m.

This round of financing is the result of years of hard work by the development team, whose persistence has witnessed the first stock transaction on the blockchain platform. But according to an Overstock spokesperson, their real work has just begun.

Currently, tØ can only be used to trade Overstock shares, but Johnson said the platform will soon be able to be “customized” to include stocks of other companies.

If other companies are willing to issue stocks on our platform, we would be happy to work with them.

Blockchain vs. Wall Street

Medici was founded in 2014 by Overstock founder and CEO Patrick Byrne, who hopes to use this distributed cryptographic system to replace specific stock trading functions.

Byrne made it clear that he hopes to use this system to combat illicit practices such as naked short-selling, which is an investment technique in which investors sell stocks that do not exist directly on the market without borrowing them, and then buy them back when the stock price falls further to make a profit.

Issuing financial products in a blockchain system can prevent traders from privately controlling assets that do not belong to them.

During the test, Byrne spent $500,000 on the tØ platform to buy the “first crypto security” in June 2015. A month later, Overstock sold a crypto bond to New York trading firm FNY Accounts for $5 million.

However, the recent $1.9 million raised in the blockchain platform was completed through direct investment, which is the world's first direct investment case. Overstock (NASDAQ: OSTKP) currently has a market value of 4.55亿美元and a share price of $17.95.

TØ officially launched last year, and its co-founder John Tabacco introduced the platform at Nasdaq's New York office and called the platform's fundraising plan Byrne's ultimate goal.

He concluded:

Our team has written this goal into the history of the capital markets.