A discreet website with a domain that's difficult to decipher is currently in the process of making financial history.
For the past week, anyone who entered 'kccbd.t0.com' into a web browser would be prompted to create an account with Keystone Capital Corporation, "powered by tØ". Far from jibberish, the site is the point of entry to a first-of-its kind blockchain-powered security offering.
While many details of the effort are being kept behind a closed veil of secrecy during the so-called "silent period", Overstock has confirmed that the very first subscriptions have already been received.
The company told CoinDesk:
Fortunately for industry professionals looking to glean insight into the process (and maybe even learn from it for their own efforts), Overstock is a publicly traded firm and much of the process is being documented for investors to follow.
Just last week, Overstock launched its rights offering designed to let existing investors purchase shares of its preferred stock, including shares to be issued using tØ's blockchain technology, according to an SEC filing.
These blockchain shares will trade exclusively on the registered alternative trading system using blockchain technology, and will reach a maximum price of $15.68 per share.
Based on the SEC filing that established the maximum price of $15.68, the broker-dealer will receive a $1.25 fee for each share sold, resulting in proceeds for Overstock of $14.43. At that rate, if all 2 million shares are sold, that would result in a maximum fundraise of $31.36m, with $28.86m proceeds for Overstock.
The high price of disruption
Earlier this month, Overstock reported a $3m pretax loss for the third quarter of this year. We now know that Overstock spent $2.5m in expenses related specifically to the rights offering.
Specifically, $1.9m was spent on legal fees and expenses, $260,000 was spent on accounting fees an expenses and $76,000 was spent on printing and engraving, among other expenses.
The support network
Though Overstock is footing the bill, it is not pulling off the offering alone.
Shares and interest of the stock will be transferred through the record holder's account with a designated broker-dealer using an alternative trading system registered with the Securities and Exchange Commission (SEC).
Overstock has committed to paying Source Capital 8.0% of the proceeds, consisting of a 6.0% commission, a 1.8% non-accountable expense fee and an out-of-pocket accountable expense allowance of 0.2%, according to an SEC filing.
While it can be difficult to tie such surges to any particular event, that hasn’t keep market observers from weighing in.
Overstock CEO Patrick Byrne on the other hand, is not hedging his bets.
In the SEC document, Byrne concluded:
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