Sam is a trader and one of our lead stock analysts at AskTraders. After starting his career predominantly in the forex markets, Sam now focuses on gold and stocks with a preference for macroeconomic analysis.
Shares of Overstock.com Inc (NASDAQ: OSTK) are moving higher on Tuesday after the company said it will be converting Medici Ventures Inc, its wholly-owned blockchain-focused subsidiary, into a limited partnership.
Third-party venture capital firm, Pelion Venture Partners, will be the general partner of the fund.
Overstock will be a limited partner, and after closing, Pelion will have sole authority and responsibility regarding investment decisions, appointing board members of the portfolio companies, and exercising all shareholder rights for assets that Medici currently holds.
The fund will have an eight-year life span and a total capital commitment of $45 million. According to Overstock, the fund will return investor capital back to the company first, and then split profits on successful exit as part of the agreement.
Medici will no longer continue providing software development and design services to its portfolio companies, but it will hold a “significant” minority stake in tZero Group with Overstock retaining a direct minority equity interest in tZERO.
Overstock will continue to accept bitcoin as a form of payment for product purchased on its website.
“We remain bullish on blockchain technology but are changing the way we interact with these assets. As we evaluated how to create the highest return for our shareholders, we determined it is time to partner with a seasoned venture capital firm to oversee the portfolio and make follow-on investment decisions,” said Jonathan Johnson, Overstocks CEO.
Overstock shares have gained 13.50% premarket, currently sitting at $76.50.
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