on the crypto
Online retailer Overstock has finally distributed the digital dividend to shareholders. The digital security was issued as Series A-1 shares on a 1:10 basis to all Overstock shareholders on April 27, 2020 with a record lag, according to a press release this week.
The dividend is distributed, but only valid on the tZERO platform
Called OSKTO, the dividend can now be negotiated freely, but only on Overstock's blockchain-based platform, tZERO. Shareholders will need to open a brokerage account with a broker-dealer who subscribes to ATZ tZERO to trade the stocks, the company said.
"I am delighted that we have distributed this innovative dividend to our shareholders," said Overstock CEO Jonathan Johnson. "These preferred shares have real value and have paid off [the shareholders] with a cash dividend for each of the past three years."
Byrne's idea of the digital dividend
The digital dividend concept was devised by former Overstock CEO Patrick Byrne, who has long been a fan of cryptocurrencies and blockchains, and started accepting bitcoins for retail sales as early as January 2014.
Apparently, Byrne had conceived OSKTO as a way to support tZERO and hinder short sellers on whose business strategies he had long opposed. In this week's announcement, Johnson said: “We believe that [the digital dividend] will increase long-term participation and liquidity on the tZERO ATS platform. I appreciate the support and cooperation of the community of Investors and regulators for our efforts to bring innovation to capital markets through new technologies. "
OSKTO was first announced in July 2019, with the company predicting a record launch date for September 23, 2019. After Byrne's departure, however, Overstock paused this effort in an attempt to restructure the dividend project. , making the shares freely negotiable and eliminating a previously planned six-month block.
The legal battle of investors
A report from the time suggested that Byrne had structured the digital dividend specifically to block short selling. This mechanism did not work well with some investors, who filed a collective lawsuit against Overstock in September, claiming that the company had violated the securities rules by making false statements to manipulate the company's share price.
Last week, Overstock filed an action to close the lawsuit "without merit", saying that no one had actually provided any evidence of wrongdoing. Byrne left the company in August and discharged his shares after revealing that he had a three-year relationship with a Russian agent and claiming to have acted as a confidential police officer.
And what do you think of Overstock? Have you ever heard of it? Let us know in the comments what your opinion is regarding his social trading and all this story.
