“CNBC – E-commerce company-turned-blockchain play Overstock.com‘s 4 million share offering has been canceled, according to a source familiar with the situation. Underwriter Guggenheim Securities decided late Wednesday night not to proceed due to market conditions, the source said.”
Overstock.com decided to kill it’s 4M share offering late Wednesday evening, as it discovered that while great for business in 2017, trading in lockstep with bitcoin hasn’t quite worked out in 2018. Look, I can see where Overstock is coming from. There is something to be said about first mover advantages and all that, but there’s also that John Henry line from the movie Moneyball: “…the first guy through the wall — he always gets bloody. Always.”
I subscribe to that philosophy. Let someone else innovate and deal with the cash burn. Outsource your R&D to the idealist and improve upon their design (or if they blow up, snatch the remains and run with it). In Overstock’s case, their CEO, Patrick Byrne, is the idealist. He had grandiose visions of transforming his e-commerce platform into a cryptocurrency exchange overnight, so the markets treated it like one. The guy has turned his once stable, discount furniture company into a crypto proxy with the likes of Riot Blockchain and that iced tea company from Long Island. Make no mistake: other large e-commerce and social network platforms would love to develop their own dominant medium of exchange a la crypto, and they’re taking notes on how to avoid the same fate as Overstock in the process.
Always remember: issuing equity can get expensive, especially when you’re planning on generating future cash flows by making markets in pixie dust. My condolences to Overstock shareholders.