Overstock.com Announces Rights Offering Including Blockchain Shares on t0 Platform

Overstock.com, Inc. (OSTK) today announced that its board of directors has approved a non-transferable rights offering. The offering will allow Overstock’s stockholders of record to purchase shares of its preferred stock, including preferred shares to be issued and traded exclusively on a registered alternative trading system using the t0 issuance and trading platform developed by Overstock’s majority-owned financial technology subsidiary t0.





Overstock is planning the rights offering primarily to enable t0 to demonstrate the operation of the t0 platform, while providing Overstock’s stockholders of record the opportunity to participate. Overstock intends to offer up to one million shares of its preferred stock, and will give stockholders the opportunity to subscribe for shares of its Blockchain Series A Preferred, which will trade exclusively on the alternative trading system. Stockholders will also have an opportunity to subscribe for an alternative series of its voting preferred stock, which will be economically identical to the Blockchain shares but will trade in the over-the-counter market.
“This is the culmination of over two years of true innovation and hard work,” said Overstock CEO Patrick M. Byrne. “Through this public issuance of blockchain-based securities the history of capital markets is entering a new era, the era of blockchain-based securities.”
The rights offering will be made by a distribution of one non-transferable subscription right for each ten shares of common stock owned on the record date, plus one additional right for any balance of nine or fewer shares held. The distribution of the subscription rights settles T+3, so in order to be considered a stockholder of record you must own the common stock in your brokerage account as of 4:00 PM ET on Monday, November 7, 2016, which is three trading days before the record date of November 10, 2016.
The proposed rights offering will include an over-subscription privilege, which will entitle each rights holder that exercises its basic subscription privilege in full the right to purchase additional shares of preferred stock that remain unsubscribed at the expiration of the rights offering, if any. Both the basic and over-subscription privileges are subject to proration. The basic and over-subscription privileges may be exercised during the subscription period of November 15, 2016 through 5:00 PM ET on December 6, 2016, subject to proration. Overstock may extend the offering up to an additional 30 days, in which case the offering would continue on a subscriptions first-in, first-served basis, with the potential for pro rata allocation of shares among participants subscribing on the day, if any, on which the offering becomes over-subscribed.
The subscription exercise price (the “Subscription Price”) is expected be the lower of: (1) 95% of the volume-weighted average trading price (VWAP) for the five trading days ending November 11, 2016 (the “Maximum Price”), and (2) 95% of the VWAP for the five trading days ending December 6, 2016.  Subscribers will be required to fund their subscriptions at the Maximum Price.
Overstock recommends that current stockholders consider notifying their broker or financial advisor about the upcoming rights offering to ensure they will maximize their ability to participate in the rights offering.
The expected calendar is:
Monday, November 7, 2016Ownership Day; must own OSTK common stock by 4:00 PM ET to become a stockholder of record on the Record Date.
Tuesday, November 8, 2016Shares trade Ex-Right
Thursday, November 10, 2016Record Date
Monday, November 14, 2016Announcement of Maximum Price
Tuesday, November 15, 2016Subscription Period Begins
Tuesday, December 6, 2016Subscription Period expires at 5:00 PM ET and Final Price is determined.
The rights offering will be made pursuant to Overstock’s effective shelf registration statement on Form S-3 (Reg. No. 333-203607) on file with the Securities and Exchange Commission (the “SEC”), and a prospectus supplement to be filed with the SEC prior to the commencement of the rights offering. The information herein is not complete and is subject to change. This press release is not an offer to sell these securities and is not soliciting an offer to buy these securities. The offering can be made only by a final prospectus, including a prospectus supplement. Investors should consider investment objectives, risks, charges and expenses carefully before investing. The base prospectus included in the registration statement contains this and additional information about Overstock, and the prospectus supplement will contain this and additional information about the rights offering, and rights holders should read both carefully before exercising their rights and investing.