The Hong Kong-based private equity investment company GSR Capital intends to invest up to $404 million in Overstock and its subsidiary blockchain project tZero. At the same time, an agreement on the acquisition of tZero tokens for $30 million and Overstock shares for $104 million has already been signed.
GSR Capital will repurchase shares of tZero in the amount of $270 million bringing company's capitalization up to $1.5 billion. It is noteworthy that last month the media reported about GSR Capital's intention to buy tokens for $160 million.
The company tZERO, a subsidiary of the retail giant Overstock, raised $134 million in a regulated Security Token Offering, the press release said.
Initially, the company intended to raise $250 million. Head of Overstock Patrick Byrne on the first day of token sale said that tZERO raised $100 million, but some community members have questioned this number.
It later turned out that many large investors from Asia faced significant difficulties in trying to invest in the enterprise. This, according to Byrne, was the reason for the slowdown of the entire fund-raising process.
Previously, tZero's token sale was in the field of vision of the Securities and Exchange Commission (SEC), which conducted an investigation into the company in connection with possible violations of federal securities legislation. Nevertheless, no charges were brought against the representatives of the firm.
WHY IS IT IMPORTANT?
1. The volume of this investment makes it the biggest single one in the history of the blockchain.
2. Private Equity Firms (PE) are pools of money gathered by investors either to stake or to buy companies. If a PE is interested in a company, it could be a signal that the venture is headed for success. It might also be a case of a PE buying up to eliminate competition.
3. Earlier in April TZero has unveiled software for a blockchain-based Security trading platform. The company’s digital ledger solution is designed to "trade security tokens in an easy, compliant, and user-friendly manner."
Previously, tZero's token sale was under the microscope of the Securities and Exchange Commission (SEC), which conducted an investigation into the company regarding possible violations of federal securities legislation. No charges were brought against the representatives of the firm.