Overstock.com Shares Plummet Following SEC Cryptocurrency Investigation
Shares of e-commerce company Overstock.com have fallen significantly as the US Securities and Exchange Commission (SEC) investigates the company’s sale of digital tokens through its subsidiary.
Overstock.com shares fell more than 10 percent Tuesday, following the e-commerce company’s announcement that it intends to offer 4 million shares of new stock in an underwritten public offering. As the lone underwriter, Guggenheim will have the option to purchase as many as 600,000 additional shares within a 30 day period.
Overstock.com is based out of Salt Lake City and is most widely known as a seller of furniture, home decor, and jewelry. Like many struggling companies, however, it has decided to venture into the world of cryptocurrency through its subsidiary, tZero.
As noted by CNBC, tZero previously stated it would form a joint venture with its parent company to launch a digital coin exchange, claiming it has acquired a license for an alternative trading system.
However, the Securities and Exchange Commission (SEC) is currently investing the company’s cryptocurrency-focused subsidiary’s sale of digital tokens after requesting “certain documents related to the offering and the tokens in connection with its investigation.” The move illustrates an increased focus on regulating the burgeoning cryptocurrency market by the United States federal government’s independent agency.
March has already been a rough month for Overstock.com. The company’s shares already dropped 15 percent earlier this month as confidence in the company’s newfound cryptocurrency focus is virtually nonexistent.
Overstock.com doesn’t exactly have the soundest history with cryptocurrency to date.
In January, Overstock’s website temporarily afforded customers the ability to pay for products with either Bitcoin or Bitcoin Cash interchangeably — a costly mistake, given the fact that the two cryptocurrencies hold vastly different values. At the time of the error, Bitcoin was valued at approximately $14,000 while Bitcoin Cash sat at a value of about $2,500. Customers taking advantage of this mistake were able to cancel their orders and receive a refund in Bitcoin — making a substantial profit as a result.
What do you think about Overstock.com’s joint venture into the world of digital coin exchanges? Let us know in the comments below!
Images courtesy of Bitcoinist archives, Pexels.
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