Overstock.com, Inc. (NASDAQ: OSTK) subsidiary tZero announced that it has raised USD 134 Million in its security token offering as part of its second-quarter results. The announcement was paired with disclosure of an investment worth up to USD 400 Million from Hong Kong equity firm GSR Capital. Although the Company had an initial goal of raising USD 250 Million through the offering, TZero said it completed its token sale earlier in the week.
CEO Patrick Byrne reiterated a claim that tZero received USD 100 Million in commitments when it first opened the token sale in an earnings call saying, “In Asia it was quite different. The first three people we met … all said ‘we’d take USD 60 Million’ [but] it proved extremely difficult to get money out of Asia for many different reasons. That’s what slowed things down so much,” referencing the several extensions to the Company’s token sale.
The deal would see GSR acquire up to USD 270 Million in tZero equity of a valuation of USD 1.5 Billion and up to about USD 104 Million in Overstock shares. GSR agreed to buy USD 30 Million worth of tZero Security Tokens from Overstock according to the statements.
Overstock first announced GSR’s intent to purchase equity in June 2018 in a press release, revealing GSR would purchase USD 160 Million in tZero security tokens. The Company said it ended the sale “raising USD 134 Million in aggregate consideration” and that “this sum includes USD 30 Million from repayment of intercompany debt between tZero and Overstock.” GSR will purchase the same security tokens from Overstock that it bought from tZero as a repurchase agreement according to the PR.
Byrne wrote in a statement, “When GSR completes its planned investments, we should have over half-a-billion dollars. We believe this will provide ample capitalization with which to build a company that can upend global capital markets.”