Overstock shares took off by 21 percent in after hours trading following news that Hong Kong-based private equity firm GSR Capital will put up to $270 million in tZERO, an Overstock blockchain auxiliary, CNBC announced last week.
The two firms reached an arrangement wherein GSR Capital will put up to $374.55 million in return for tZERO and Overstock shares. GSR will purchase $30 million worth of tZERO tokens from the e-commerce retail giant and will also invest up to $270 million in the organization at a valuation of $1.5 billion, giving the investment firm an 18 percent stake in tZERO.
As a result of the announcement, the stock leaped to 4.47 percent during trading hours and closed at $38.60 per share. tZERO CEO Saum Noursalehi said in an announcement:
“We are honored to have GSR Capital as a strategic investor. The tokenization of securities has the potential to disrupt global capital markets responsible for moving hundreds of trillions of dollars. Together with our partners, we will globalize our blockchain-based platform, bringing more efficiency, liquidity, and trust to capital markets.”
A letter of intent was signed by tZERO and GSR Capital for the purchasing of $160 million in tZERO security tokens at a cost of $10.00 per token.
In a statement released on the matter, the company said it “entered into executed SAFEs [Simple Agreements for Future Equity] in excess of $168 million for Security Tokens, of which over $95 million has been already funded.”
On August 6, tZERO declared the end of its Security Token Offering (STO) at 11:59 PM EDT that day the company initially restricted maximum possible tokens to $250 million. The company at first presented the STO as an Initial Coin Offering in December last year, attracting a lot of interests from cryptos and institutional investors. It was rumored then that the company attracted $100 million in investments during just the first 12 hours of its ICO launch.