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Overstock.com (OSTK) Soars on Private-Equity Deal Despite Wide Loss

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Overstock.com (NASDAQ: OSTK ) reported its results for its most recent quarter late in the day Thursday, which were underwhelming, but shares were soaring more than 15% late in the day.

The online retailer's stock was fueled by the fact that it inked a private-equity investment deal with Hong Kong-Based GSR Capital . The private-equity firm has agreed to invest in Overstock.com and the company's blockchain unit, according to statements from the latter and tZero .

GSR Capital is reportedly planning on investing up to $374.55 million in exchange for tZero and Overstock.com shares, according to a statement. Overstock added that it has reached an agreement with GSR Capital that will see the latter buy $30 million in tZero security tokens from the former.

GSR Capital added that it will purchase up to 3.1 million shares of OSTK stock at a 5% discount to the $35.50 close of Aug. 1. The private-equity firm will also invest up to $270 million for up to 18% of tZero's equity at a valuation of $1.5 billion.

Overstock also announced that its second quarter of fiscal 2018 brought in a loss of $64.9 million, or $2.20 per share, which is wider than its year-ago loss of $7.5 million, or 29 cents per share. Analysts were calling for a loss of 86 cents per share, per FactSet .

Revenue surged 12% year-over-year to $483.1 million from $432 million, beating the Wall Street guidance of $474 million, according to FactSet.

OSTK stock was up about 4.5% in anticipation of the company's quarterly earnings results. The company's private-equity investment deal helped to raise shares a whopping 18.5% after the bell Thursday.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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