Where to even begin. Of all the companies that were doing something unrelated to cryptocurrency mere months ago but now derive nearly all of their market value from their association with the same, Overstock is the one doing so the most believably, and I say this based entirely on views I’m hearing from others—I don’t believe them for a second. Clearly, the internet retailer and its CEO Patrick Byrne gained some cred with the crypto-community by becoming the first major internet retailer to accept Bitcoin, back in 2014. That dazzling bit of market genius increased Overstock’s sales by 4% for a few weeks. That percentage has since fallen to less than 0.1%. Overstock has been busy acquiring “blockchain” companies and making partnerships within the Bitcoin ecosphere. Byrne has done a lot to help popularize Bitcoin, and the community seems to be responding by conferring on his crypto-escapade the mantle of legitimacy. At what point, one wonders, did that become theirs to confer?
I think it’s safe to say that Byrne’s blockchains and partnerships are at least as profitable as the blockchain divisions of any other publicly traded company, meaning that aren’t any. Don’t imagine Overstock won’t make money off of this, however, because the company is about to issue its own cryptocurrency in an Initial Coin Offering (or ICO). Meanwhile, Byrne is making the rounds, explaining why the SEC needs to crack down so as to stop the illegitimate ICO issuers before they fleece investors (Read: my own imaginary money is so very legitimate that I can stand up here and spit down on the others without fear.) Bitcoin is hottest starlet in town, Patrick Byrne is the guy who has her on his arm, and the Street is star-struck—perhaps even a bit cow-eyed. If it sounds as though I’m persuaded that Overstock will fail, that’s not true. If cryptocurrency keeps gaining momentum and prices keep rising, they’ll do fine. But if you think that’s what’s going to happen, why wouldn’t you just buy cryptocurrency yourself and keep the profit, rather than share your winnings with Byrne.
Chart courtesy of www.stockcharts.com