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Should Overstock now start focusing on its Blockchain businesses?

Overstock can be an online store with Blockchain investments, but the market seems to be considering it as a Blockchain company.

13.Nov.17 12:10 AM
By Daria Zaytseva


Should Overstock now start focusing on its Blockchain businesses?

The performance of the company Overstock in 2017 is truly fantastic. The stock price has increased from $17.70 at the beginning of the year to $53.15 on November 10, a gain of 200%. The stock price rose by 30% on Thursday, after the company reported a pre-tax loss of $6.5 million in the third quarter of 2017. The base income does not seem to correlate with how the market estimates Overstock. The optimism is explained by the fact that the investments that Overstock has implemented in Blockchain technology will ultimately pay off. ICO Overstock's plans also seem to have sparked enthusiasm in the markets.

With regard to valuations, the stock market seems to be ignoring the main business of Overstock selling goods for home and clothes The entire focus seems to be related to the proposed ICO and its investments in the Blockchain space. The market seems to really reassure Overstock's testimony that it can sell its home e-commerce business.

While the main task of the company's management is to increase shareholder value (and increase market capitalization), they should remember that the market is a non-permanent. Earlier this month, the company's share price increased by 400% when it changed its name from On-line Plc to On-line Blockchain Plc. Therefore, a change in the Company's strategy based on the latest enthusiasm may not be a good driver for the long-term value of shares. Overstock may decide to turn itself into a Blockchain company, but that should not be because the market values Blockchain companies at a premium.

If Overstock concentrates on its Blockchain business and is successful, not many people will remember that it started as an online retailer.

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