Overstock Loses Investor in tZERO Days After The Departure Of Founder Patrick Byrne
Overstock interim CEO Jonathan Johnson, in an investor call on Monday with shareholders offered an update on the status of Makara Capital's probable investment tZERO, the company's security token exchange, Cointelegraph reports.
As per the interim CEO, Makar has said that it will no longer be investing in tZERO in the near future but it remains optimistic of what tZERO is developing and hopes to revisit its investment decision as tZERO continues with its build-up.
Late in March this year, Overstock revealed that Makara Capital and GSR Capital were set to invest $101 million equity and the deal was set to be inked in April. However, the company issued an update in April saying that negotiations were still ongoing stating that it was not under any exclusivity with Makara or GSR and has retained advisors to pursue parallel alternatives.
The move by Makara Capital comes just days after the departure of Overstock’s long serving CEO Patrick Byrne who resigned citing his admission of a romantic relationship with a Russian informer who is currently in prison.
Makara’s departure after several months of conducting due diligence on tZERO and it appears that the dwindling returns seems to be a major aspect of the company’s departure.
During the investor call, Johnson reteriated Overstock’s commitment to blockchain business. Johnson said that Patrick’s departure will not change the company’s focus on blockchain business. Johnson said that the company’s shareholders and others can be assured that the new management will continue to nurture and grow the blockchain team in the business and the businesses currently in the Medici Ventures family.
On the news that the SEC is investigating tZERO and its potential security token sale, the company’s General Counsel, Glen Nickle, stated that the firm will continue to cooperate with the SEC.
Adding that tZERO is meeting with SEC on a weekly basis and SEC will communicate on its focus and the matter will be resolved amicably. Overstock shares have tumbled by about 10% since the departure of Patrick Byrne.