By David Kreinces, 7/30/20
Overstock (OSTK) reported strong earnings this morning and the stock is rising extremely fast. At a price of $77.9 per share, the current high for this morning and 2020, OSTK has gained over 1,000% through its peak year-to-date.
So, why is Overstock so hot?
First, their core business is in e-commerce of discount merchandise from third-party sellers which clearly benefits from the current extreme environment for retail. Second, the company’s wholly-owned subsidiary, Medici Ventures, presents a wide range of potential growth opportunities through the application of blockchain technology. Lastly, the company’s tZERO platform works to tokenize and trade securities across a broad spectrum of assets and entities.
Blockchain
At ETF PM, we are most excited about the company’s long-term opportunity in blockchain technology and the tZERO platform through Medici Ventures. Interest in blockchain globally appears to be strong and some believe blockchain is critical to future economic growth. In fact, the global race to engage blockchain and cryptocurrency appears to be a very important trend to understand for all investors. In addition, last month, the company was awarded a U.S. government contract to work with Amazon and Thermo Fisher Scientific in providing business-to-business e-commerce markets for the General Services Administration (GSA).
At ETF PM, we have been cautiously trading Overstock this year, after we were forced to exit our 2017 initial position back in early 2018. Given the material risk and volatility in this stock, our exposure to OSTK is typically well under 3% of our investment portfolios that include stock rotation for growth investors.
ETF PM has long positions in OSTK.
Contact us today to learn more.
