Described by Overstock’s communications director, Judd Bagley, as a platform for trading “widgets” whose first use case will be equities - stocks and bonds, t0 which has been touted to be the world’s first Blockchain-based platform to issue equities and usher global financial system into a new age may be operational by December 2016.
The t0 issuance and trading platform is developed by a Overstock’s majority-owned financial technology subsidiary, t0.
At the Money 20/20 conference in Las Vegas, Bagley hinted on Monday October 24 at t0’s advantages over traditional equities trading systems and that a company would soon begin selling its stock on the t0 platform. By the next day, Overstock announced it had gotten the approval of its board to make a non-transferable rights, offering that would allow Overstock’s stockholders of record to purchase shares of its preferred stock on the registered alternative t0 trading system.
According to its published timeline, the subscription period will begin on Tuesday, November 15, 2016 and expire on Tuesday, December 6, 2016 after which the final price of the Overstock common stock, which must have been owned by Monday, November 7, 2016 to become a stockholder of record on the Record Date, would be determined.
The innovation about the t0 platform is that it can, with the use of Blockchain, make trade settlement possible instantaneously at the same time as the trade. This is unlike the traditional equity trades in which the markets operate on a trade date with addition three days for the settlement of exchange of payment and securities.
Its success could spur several other initiatives in a similar - or even better - direction.
The t0 platform is built utilizing colored coin technology, which allows for fractions of Bitcoin to be used to track ownership of many assets besides Bitcoin.
Overstock started accepting Bitcoin as a payment method in 2014, and last December, received the U.S. Securities and Exchange Commission SEC approval to sell stock for Bitcoin via t0.
Overstock will provide stockholders of record the opportunity to participate in the offer of 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.
t0 was first announced in April 2015. It acquired Wall Street brokerage firm SpeedRoute as a routing service that is connected to all 11 exchanges and 25 dark pools in the United States, for $30.3 mln in August 2015.
Forbes ranked Overstock in its list of the Top 100 Most Trustworthy Companies in 2014.