Overstock.com, Inc. (NASDAQ:OSTK) should jettison its traditional retail operations and just concentrate on its high-growth blockchain holdings.
That’s the message this week from one of Wall Street’s finest, who believes the best path forward for the online retailer is to exit retail. CNBC has more details:
D.A. Davidson analyst Tom Forte is the only analyst listed on FactSet covering the stock, which has topped $1 billion in market value only in the last few weeks. Forte said in a Thursday note that after Overstock indicated in an earnings call it could sell its home e-commerce business, he is raising his target price on the stock to $85 from $57 a share.
“We now see the possibility of unlocking value in its two most significant assets — its home e-commerce effort and Medici Ventures (portfolio of nine companies that, to varying degrees, leverage the blockchain),” Forte said. He has a buy rating on the stock and said the market still doesn’t fully appreciate the value of Medici Ventures, the blockchain-focused division Overstock launched in 2014.
Blockchain, of course, is the database technology that powers cryptocurrencies like bitcoin. It’s also found a home in the traditional banking sector, which sees great promise in its abilities to securely and transparently record financial transactions on a permanent ledger.
Overstock shares have soared this year on strength within its Medici Ventures unit, along with news that a subsidiary, tZero, will soon launch a digital coin-trading platform.
Overstock.com, Inc. shares were trading at $53.30 per share on Tuesday morning, down $3.00 (-5.33%). Year-to-date, OSTK has gained 204.57%, versus a 16.64% rise in the benchmark S&P 500 index during the same period.