Aug 11, 2019 19:48 UTC
Aug 11, 2019 at 19:48 UTC
Despite Overall Losses Overstock Insists Its Blockchain Business Is Strong
Retail giant and cryptocurrency promoter Overstock inc recently published its Q2 2019 earnings report which has revealed a 23% decrease in revenue and a 19% loss in gross profit.
On the other hand, the report also showed a positive adjusted Earnings Before Interest, Taxes, Depreciation and Amortization for the first time since the second quarter of 2017.
The company was also able to cut down their sales and marketing expenses by 63% in the quarter.
Moreover, its blockchain division is going stronger than ever. On August 8, the company announced that its blockchain project tZERO has already achieved many of its goals. It will soon be opened to the public and is expecting as many as 50,000 new investors among its existing Overstock shareholders to begin trading its security tokens.
However achieving these goals came at a great expense to the company. Reports showed that tZERO incurred a massive $10 million in pre tax losses. These losses impacted its parent firm’s general and administrative (G&A) expenses.
The reports said,
“G&A expenses totaled $32.0 million and $31.4 million in Q2 2019 and 2018, respectively, a 2% increase […] The increase was primarily due to a $6.0 million decrease in cryptocurrency gains from our Q2 2018 sale of cryptocurrency received during the tZERO security token offering, with no similar activity in Q2 2019.”
A detailed analysis of various segments of the company showed that, tZERO accounted for just over $4.1 million of its roughly $373 million net revenue for Q2 2019.
Last month, Overstock had announced that it will pay shareholders a sort of dividend in the form of shares of Overstock.com Inc.’s Digital Voting Series A-1 Preferred Stock (OSTKO). This news came just days after the company launched a cryptocurrency wallet and exchange application for Android devices.
In 2014, Overstock was one of the first major retailers to accept cryptocurrency, and they have since branched out with a variety of different associated projects. One can hope that their faith in blockchain and cryptocurrency shall bring them more gain than pain.