Overstock CEO warns of cryptocurrency dangers

Fresh on the heels of his own initial coin offering, Overstock.com CEO Patrick Byrne had harsh words for latecomers to the exploding cryptocurrency space.

“I’d put it this way: If they don’t already have a bunch of blockchain developers and if they can’t tell you what ERC-20 is … then they’re con men,” Byrne told The Post in a phone interview Thursday.

ERC-20 is the standard bitcoin-rival ethereum uses for its tokens.

“They’re just trying to get some sort of pump for their stock,” Byrne said of Long Island Iced Tea Corp. and other microcap companies that reaped massive paper gains in recent weeks following opportunistic pivots into the cryptocurrency space.

Byrne, meanwhile, is in the midst of a years-long pivot toward cryptocurrencies and blockchain.

His e-commerce company Overstock began accepting bitcoin in 2014 — one of the first major companies to do so.

“I’m kicking myself that I didn’t get into it two years earlier,” Byrne said, blaming health problems for delaying his entry. “It’s bigger than the internet. It’s going to change the course of civilization.”

But this year, Overstock appears to have made up for lost time as its shares have nearly tripled in recent months.

Earlier this week, Overstock announced a $250 million token sale for its blockchain subsidiary tZERO and said it has commitments for a $100 million within the first 12 hours.

tZERO is said to be the first blockchain-based initial coin offering trading platform that is compliant with the Securities and Exchange Commission.

Overstock announced its plans to launch tZERO in September, which sent the company’s stock soaring as the e-commerce company was seen as a way to bet on rapidly rising cryptocurrencies.

Earlier this month, investment banking giant Morgan Stanley revealed an 11.5 percent stake in Overstock, making it the largest shareholder behind High Plains Investments, which is controlled by Byrne.

Overstock’s — and Byrne’s — cryptocurrency pivot also got support from an unlikely source.

In October, noted short-seller and one-time Byrne adversary Marc Cohodes announced a rare long position in Overstock.

“I always kind of admired Pat,” Cohodes told The Post on Thursday, noting that the two were at odds over a decade ago.

Byrne was “early to see online and he was early to see blockchain,” Cohodes said, adding that tZERO is a “tremendous idea.”

Overstock shares shed 3.6 percent, to $67.45, Thursday.

Source: https://nypost.com/2017/12/21/overstock-ceo-warns-of-cryptocurrency-dangers/

Leave a Reply