Overstock CEO to Sell or Reorganize Business to Focus on Blockchain
Patrick Byrne, Overstock.com’s CEO and founder, last week announced a joint venture to launch a global property registry system, based on blockchain technology, and added that he will either privatize or sell his e-commerce business within the next 90 days. "My goal is [within] 60 to 90 days we walk away from this," Byrne told CNBC Wednesday in reference to the plan. He said he has an "ethical obligation" to focus for the next five years on his newly announced De Soto joint venture for a blockchain-based global property registry. "We think we can change the world for 5 billion people." The three parties forming the joint venture, named De Soto Inc., are Peruvian economist Hernando de Soto, Byrne and Medici Ventures, Overstock.com’s blockchain subsidiary. In a Dec. 13 press release, Overstock.com said the joint venture “is developing a blockchain-based system using mobile applications and social media integration” to “create a global repository” of property records. Blockchain eliminates the need for a third-party intermediary by creating a rapid, permanent record of transactions in a network.
Byrne said the company is looking at three options for its home goods e-commerce business:
- First, a traditional brick-and-mortar business could buy the operations.
- Second, a "strategic investor, probably a guy out of Asia" could invest in the business.
- Third, the company could "go private" with a private equity company such as Bain, Carlyle or KKR and "go off the market for two years" to integrate Overstock's blockchain work with the retail arm.
Total Retail's Take: While Byrne's announcement may come as a surprise to many, Overstock watchers know that Byrne has indicated repeatedly over the past few months that developing the potential of blockchain technology was his true passion. For example, during the company's Q3 conference call a month ago, Byrne talked at length about the potential of blockchain and Medici Ventures. During its Q2 call in August, Byrne said he might take the e-commerce business private, partly out of frustration that the stock market seemed oblivious to the value of blockchain technology. Bitcoin and blockchain technology have been hot topics of late, so it's interesting to see it seep into the retail space.