American internet retailer Overstock told Wall Street Journal (WSJ) they would be selling their retail business to focus on blockchain full-time, which made their shares price surge by 26% last week. There’s only one caveat: this was already announced, almost word for word, in December 2017 in an interview with CNBC.
Overstock founder and CEO Patrick Byrne told WSJ that he expects to sell the retail business by February 2019, around three months from now. Last December, he said something similar to CNBC (the next day, the stock price was up by 11%): “My goal is [within] 60 to 90 days we walk away from this [retail business],” which would mean that the initial plan was to sell by February 2018. Following these repeated news, shares of Overstock surged as much as 26% on Friday, but the stock is down 66% this year.
Overstock price chart:
However, Byrne quickly backpedaled on the February 2019 prediction as well. In a statement to FOX Business, he said, “While it is possible that I could ‘wrap up a deal by February,’ I believe that the following is a more precise and accurate statement of my beliefs and intentions. I believe that the right thing to do for shareholders is to separate the value of the retail and blockchain companies (particularly tZERO), and I believe I can do that through a tax free spin off of tZERO in 13 months (which is to say, December, 2019) at the outside.”
tZERO is a blockchain subsidiary of Overstock that was unveiled back in August 2015, and is still not in commercial use. However, it does seem to swallow money, according to Byrne. “I don’t care whether tZero is losing USD 2 million a month,” he said. “We think we’ve got cold fusion on the blockchain side.”
The original WSJ article was written by journalist Paul Vigna, and journalist Gary Weiss quickly pointed out to him that this is old news.
True, but I wonder if Byrne may have exposure over his clearly false comment re sale of the $OSTK e-business. He pulled it back because it was inaccurate but not before the stock climbed 23%! Over sheer bullshit. Hey Paul, do you give a damn that you were used like this by Byrne?
— Gary Weiss (@gary_weiss) November 25, 2018