Overstock’s tZERO Security Token Trading Project Misses Mark of $100 Million Capital Injection

In what has come as a complete surprise for many, Overstock’s blockchain subsidiary TZERO has “missed” its mid-April goal for raising $100 Million from China-based GSR Capital and Singaporean PE venture Makara Capital.

As per a letter issued by Patrick Byrne — CEO of Overstock — late yesterday afternoon, he noted that while all of the required diligence processes were being carried out by the involved parties as planned, no definitive deal had been set-in-motion as of yet.

Byrne then went on to add:

“The parties will not have a definitive deal in place by the mid-April target. tZERO plans to continue facilitating Makara’s diligence, but is not under any exclusivity with Makara or GSR and has retained advisors to pursue parallel alternatives.”

More On The Matter

As mentioned earlier, Overstock’s plan to raise a total of $100 million comprises of a $30 million tZERO security token purchase agreement between GSR and Overstock (the MoU for which was signed between the two entities last month).

Also, it should be pointed out that the investment agreement in question was first announced back in August 2018 — a time when GSR’s executive brass had intended to invest up to $404 million in Overstock’s much-hyped project.

The breakdown of the deal was as follows:

• $270 million in tZERO’s equity
• $30 million in tZERO security tokens
• $104.55 million in shares of Overstock common stock

“I remind shareholders of the $30 million binding tZERO security token purchase agreement between Overstock and GSR…. Under that agreement, GSR has a binding $30 million funding obligation for May 6.”

Final Take

In closing out this piece, it should be mentioned that during the first couple of weeks of 2019, tZERO’s security-token exchange platform went live for all ‘secondary trading purposes’. To facilitate these complex tx’s, the firm hired the services of a broker-dealer firm called

‘ Dinosaur Financial Group’.

Last but not least, during the latter half of 2018, Byrne was quoted as saying that the tZERO project was going to be making use of

“some of the world’s most significant and cutting edge crypto technologies, as a result of which, the platform would be able to capture the attention of the crypto industry at large (within a span of around 12-16 months)”.