Overstock.com Inc. OSTK shares jumped 13% in the after-hours session on Monday.
The surge came as the company announced a partnership with Pelion Venture Partners to oversee the blockchain assets of its subsidiary Medici Ventures.
What Happened: The subsidiary will be converted into a fund, on a limited partnership basis, with Overstock becoming the limited partner.
The fund is expected to have a total capital commitment of $45 million and a life of eight years. Pelion will be responsible for all investment decisions, the appointment of board members of the portfolio companies, and also have the sole authority to exercise all shareholder rights currently held by Medici.
Medici will no longer provide software development and design services to the portfolio companies, Overstock said.
Why It Matters: Overstock CEO Jonathan Johnson said the online retailer remains “bullish on blockchain technology” but is simply changing the way it interacts with such assets.
“As we evaluated how to create the highest return for our shareholders, we determined it is time to partner with a seasoned venture capital firm to oversee the portfolio and make follow-on investment decisions. Pelion is the perfect firm to do this,” Johnson said.
The e-commerce company has long been a proponent of decentralized ledger technology. It started accepting Bitcoin (BTC) as a form of payment on its platform in 2014.
Price Action: Overstock shares traded 12.85% higher at $76.06 in the after-hours session after closing the regular session 0.75% lower.
Photo by Overstock Coleiseum on Wikimedia
© 2024 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
Comments
Trade confidently with insights and alerts from analyst ratings, free reports and breaking news that affects the stocks you care about.
