Overstock Inc., the parent company of Salt Lake City’s Overstock.com online retailer and tZERO, a security token trading subsidiary, continues to struggle as an anticipated equity investment in the firm has stalled.
Patrick Byrne, CEO of Overstock, issued a statement recently in which he addressed the status of a $404 million investment he previously announced would be coming from GSR Capital, a Hong Kong-based private equity firm. In Byrne’s statement, he said that “the previously announced GSR equity investment in Overstock and tZERO has not been completed” and that Overstock is in discussions with GSR Capital and Makara Capital, a key partner of GSR Capital, regarding a potential transaction.
According to sources within Overstock, the large investment was contingent, in part, on delivery to GSR Capital of retail product from Overstock for the investor’s online retail operations in the Far East. The deal stalled when the goods were not delivered.
Overstock and the Hong Kong firm did sign a memorandum of understanding outlining an investment of up to $100 million in tZERO common stock. This investment is set to close in April after due diligence and regulatory approval, Byrne said. The investment is a significant drop from Overstock’s initial $404 million investment announcement in which GSP Capital would purchase up to $270 million in tZERO equity, $30 million in tZERO security tokens and up to $104.55 million in shares of Overstock.com.
Meanwhile, Overstock.com has laid off an additional approximately 100 employees, adding to the 100 employees let go earlier this year.