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Online retailer Overstock has decided to restructure its planned cryptocurrency dividend plans, according to media reports. The plan had been devised by former CEO and co-founder Patrick Byrne who resigned from his post in August. The company attributed the restructure to market feedback as well as to provide greater liquidity.
Before his two-decade tenure at the top of the firm came to an abrupt end, Byrne had structured the company’s next investor dividend to be paid out in a digital token listed on the tZero security token trading platform.
Byrne’s plan, which had been approved by Overstock’s board of directors, also specified that the digital tokens could only be accessed through a Dinosaur Financial Group brokerage account. The dividends weren’t to be payable until November 25, and even then, the investors had to wait for six months before they can trade the tokens.
The plan by Byrne had reportedly been to thwart short sellers, a report by The New York Post revealed. Byrne has had a long history with short sellers whom he has previously described as being part of a conspiracy against Overstock.
However, Overstock has decided to restructure the dividends rollout which will allow the investors to immediately trade the tokens once they receive them. In a statement, the company stated, “In view of the feedback we received from industry participants, investors, and regulators with respect to the Series A-1 stock dividend, and in order to provide greater liquidity, we are working with the appropriate regulatory authorities to structure the issuance of the dividend shares so they would be freely tradable by non-affiliates immediately upon distribution.”
Byrne’s plan to thwart the short sellers, who place trades on a company’s stock price going down, had briefly worked. Overstock’s price had surged 60% over the last two weeks to hit a 52-week high at $29.75. However, Morgan Stanley and JP Morgan’s brokerage firms announced that they would take the cash equivalent value to the digital dividend when the short sellers returned their borrowed shares. The news led to a surge in the short positions, pushing the price of Overstock’s stocks down 40% from Friday’s peak.
Byrne has been a vocal crypto supporter for several years, leading Overstock to become one of the earliest companies to accept crypto payments. And while he may have left the company, his influence has outlived him, with the company stating last month that it will remain committed to its crypto and blockchain projects.
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