Overstock chief Patrick Byrne looks to sell online retailer whose stock has climbed amid this year’s cryptocurrency mania
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Patrick Byrne, the controversial entrepreneur who runs Overstock.com, is exploring options to sell the online retailer, whose stock has soared amid this year’s cryptocurrency mania, to fund an ambitious attempt to make a global property registry on blockchain.
Hernando de Soto, a well-known Peruvian economist who argues that formalising land rights is key to alleviating poverty, has joined forces with Mr Byrne in the latest attempt to leverage the distributed ledger technology to tackle social problems.
Mr de Soto and Mr Byrne, a long-term cryptocurrency and blockchain enthusiast who waged a campaign against short selling, have formed a non-profit venture called De Soto, Inc. that intends to gather local informal ownership records into a blockchain database. A pilot is expected early 2018.
“One of the possibilities is I sell the [Overstock] business and we have all the capital we need” to fund the new venture, Mr Byrne told the Financial Times on Tuesday, adding that he would cherry-pick a dozen of Overstock’s top talent to take over to De Soto by late January.
“I feel a great moral obligation to refocus my life around this,” he added.
To fund the scheme to which he says he has committed himself for five years, Mr Byrne says he is looking at options to sell Utah-based Overstock, which has some 2,000 employees and whose stock price has soared 219 per cent amid blockchain mania this year, giving it a market capitalisation of about $1.4bn.
Overstock comprises two companies — the retail business Overstock.com, which accepts both fiat and cryptocurrency payments and sells everything from discount furniture to watches; and Medici Ventures, which invests in blockchain technology companies.
Medici’s most closely watched bet is tZERO, a regulation compliant exchange geared towards initial coin offerings, which has been touted as Wall St meets blockchain. It will launch its own much-hyped initial coin offering to raise funds next week.
Mr Byrne, whose family owns 40 per cent of Overstock, said in its third-quarter earnings call in early November that he had hired Guggenheim Partners to look at three potential options to put Overstock on the block.
One option is selling Overstock’s retail business to a bricks and mortar company seeking a strong online presence, to avoid disruption by Amazon. “Really, since this summer there’s a mass freak-out in corporate America,” Mr Byrne observed.
The second is for the entire company to be bought by or take a large investment from a multibillion-dollar investment fund that does not “want to cede the earth to Amazon”. Mr Byrne claimed that one such fund had approached the company two months ago. He would not name the fund, but hinted that interest from Asia was especially strong.
The third option is to be bought out by a large private equity firm, which would allow Mr Byrne to step away from Overstock to pursue the De Soto project.
Mr de Soto, a recipient of the $500,000 Milton Friedman Prize from the Cato Institute, a conservative think-tank, was linked to a land registry blockchain project with the Republic of Georgia in April 2016. But he says that after the inauguration ceremony, he was not consulted further.