Overstock Issues Digital Dividend of One Share for Every Ten

Blockchain and eCommerce company Overstock (NASDAQ:OSTK) has declared a digital dividend that gives shareholders a single “Digital Voting Series A-1 Preferred Stock” for every ten shares of common stock.

Shareholders of record on September 23, 2019, will receive the shares on November 15, 2019.

Digital Dividend Airdrop

Overstock notes that existing Series A-1 shares currently can be traded on the PRO Securities ATS operated by PRO Securities, LLC. The marketplace is powered by tZero’s tech – an Overstock subsidiary.

Overstock founder and CEO Patrick M. Byrne said that five years ago they set out to create a compliant, clobkchain based capital market platform. “We’ve succeeded,” said Byrne.

“The approximately 40,000 holders of the currently outstanding ≈37 million shares of Overstock will be issued a dividend of ≈3.7 million of these new digital shares to trade in that new capital market. Because the bundle of legal rights represented by each of these new A-1 shares is similar to the bundle of legal rights embodied in shares of our common stock (OSTK) that trades on NASDAQ, I might normally expect these blockchain-based A-1 shares to trade in rough approximation with OSTK. However, our legacy OSTK shares trade in a capital market with trading and settlement mechanisms about which I have long made my criticisms and doubts known to the public, whereas our new blockchain-based A-1 shares trade in a blockchain-based capital market which I believe is resistant to such dynamics. I cannot predict what kind of trading parity, if any, will emerge between the two. Perhaps arbitrageurs will notice and explore such matters, and in the process, punch a wormhole between the universe of legacy NMS and new universe of a blockchain capital market.  I am going to be as interested as anyone else to see what the result of that will be.”

Overstock notes that no secondary trading will be immediately available for the distributed shares until they become elegible under existing securities law. The time period after which the Dividend shares will become eligible for Rule 144 varies depending on individual circumstances.

In general, it is six months from the payment date for non-affiliate investors, subject to the applicable requirements and limitations of Rule 144.

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