Cryptocurrency, Bitcoin (BTC)–The CEO of Overstock.com, one of the earliest digital storefronts to accept cryptocurrency and still one of the largest to date, sold 10 percent of his stock last week totaling more than $20 million in a report by CNBC earlier today. According to the filing by the SEC, Patrick Byrne sold $20.7 million worth of Overstock share in two lump sums. Stock prices fell sharply in the aftermath of the report, down 12 percent at one point before making a recovery.
Given the relationship between Overstock and the sinking price of cryptocurrency (one that also benefited shareholders last year during Bitcoin’s massive bull run), there was speculation over whether the CEO was reacting to the ongoing bearish cycle that has characterized 2018. Instead, Byrne wrote in an open letter to investors that he does not plan on going anywhere, stating “don’t worry, I’m still in the game.” Byrne also asked investors not to panic or speculate widely over his decision to sell 10 percent of his shares, saying his intention is to re-invest most of the capital back into investments related to Overstock and Medici Ventures (a subsidiary of the parent company Overstock established to pursue blockchain projects),
“Within a matter of days, I will reinvest most of this money into two co-investments with Overstock and Medici Ventures (thus I am eating a double dose of my own cooking, as months ago I promised you I would).”
Despite most of cryptocurrency and Bitcoin’s adoption occurring within the last several years, Overstock has been at the forefront of the industry by accepting the digital asset since 2014, giving holders and investors of crypto a reliable outlet for using their coins outside of the price speculation of exchanges.
While Byrne did not address his own position in relation to cryptocurrency, he did state the decision to sell his stock was in an effort to pay back taxes, joking he needed to “pay Uncle Sam his cut.” Byrne also went on to chide investors, analysts and the broader media that his company should not be beholden to the valuation of cryptocurrency, and that their holding in Bitcoin amounts to a small fraction of their total capital. Despite Byrne’s appeal to differentiation, the stock price of his company has traced closely to the valuation of Bitcoin and the general health of the crypto markets, a feature that has benefited Overstock in the past despite the current bearish trend,
“I needed to sell stock during this quarter to meet such other obligations. I am disappointed that I when the deadline arrived for my sales this quarter, the stock had dropped (I sadly note that over the last 180 days the correlation between OSTK’s and Bitcoin’s daily movements has been 85.5%, and again warn people: we don’t have significant holdings of Bitcoin).”
With speculation over whether Amazon, Facebook or another major online player will take the plunge into cryptocurrency, Overstock has been a pioneer in the field providing a source of commerce for those looking to transact in crypto as opposed to cashing out first for traditional fiat.