- Overstock is finally ready to distribute shareholders’ long-overdue ‘digital seurity dividends.’
- Dividends becomes firm's strategy. their goal is to make investors familiar with blockchain tech.
- While the program was originally started by the firm’s former CEO, the new leadership decided to keep it.
Overstock.com recently revealed plans to finally distribute its long-overdue shareholder dividends. The so-called digital security dividends will arrive on May 19th, according to the announcement.
The dividends will see distribution in the second half of May
Overstock revealed the plans this Tuesday, April 7th. It said that shareholders will receive one OSTKO (Digital Voting Series A-1 Preferred Stock) for each 10 of their online retailer’s shares. This will only concern those shares that they are still holding on April 27th, according to the announcement.
As mentioned, OSTKO acts as a digitally-enhanced security. Traders can purchase it or sell it on tZERO’s blockchain-based platform. The platform is the only one that supports it. While issuing it seemed like a big corporate gambit, the move may yet see validation. If the distribution doesn’t see any issues, of course.
OSTKO’s creator, Patrick Byrne, who is also the CEO of Overstock, considers them revolutionary. He believes that blockchain-based dividend might help tZERO’s blockchain trading system grow. At the same time, it could also expose the ‘slop’ at Wall Street’s capital markets.
However, before he could see his project to the end, Byrne resigned. This happened only a month after the reveal of his proposal in July 2019. Interestingly enough, Overstock’s new leadership decided to keep the project, stating that it is very important to the firm’s blockchain strategy.
The new leadership kept the program
The new CEO, Jonathan Johnson, and the Board’s chairwoman, Alison H. Abraham, wrote as much in an SEC regulatory filings. They noted that “In particular, we believe the successful issuance of the Dividend will demonstrate to other issuers and market participants that this technology is scalable and has significant benefits to all market participants.”
The dividend issuance is now finally ready to arrive on May 19th, as mentioned. However, it will act more like a theoretical demonstration, than an actual tech vindication. After all, it is not a full digital asset, but rather, a ‘digitally enhanced security.’ The reason for this is that its on-chain representation remains a courtesy carbon copy of the real ownership records.
As such, it remains ‘legally irrelevant.’ However, Johnson wants the shareholders to become comfortable with blockchain technology. That would play a much larger role in the process. At the same time, it is important for OSTKO to remain within regulatory parameters, as it was, in fact, registered with the SEC.