Overstock rises after reporting plans for new blockchain venture
In a regulatory filing last night, Overstock.com (OSTK) disclosed that on December 27 the company, its wholly owned subsidiary Medici Ventures, Patrick Byrne and Hernando de Soto entered into a Memorandum of Understanding that provides that the parties will form a company, “Desoto,” that will be owned 50% by Medici, 33% by Hernando de Soto and 17% by Patrick Byrne, who is the CEO and a member of the Board of Directors of Overstock, and also serves on the board of directors of Medici.
The goal of the new company is to develop a blockchain-based system to develop a global property registry system focused on the property rights of people in the developing world.
Overstock and/or Medici will pay or contribute $14M to help launch the project, $8M of which will be used to fund DeSoto, and Medici will receive a 50% ownership interest in DeSoto.
Patrick Byrne personally will contribute $14M to help launch the project, and will receive a 17% ownership interest in DeSoto.
Hernando de Soto will serve as Chairman of DeSoto and as a director of Medici. Patrick Byrne will serve as Co-Chairman and CEO of DeSoto, in addition to his positions with Overstock and Medici.
“The MOU contemplates a more detailed future agreement, and provides that the parties will cooperate in good faith to reach more detailed agreements in the future,” the filing added.
In pre-market trading, Overstock has risen $1.95, or 2.7%, to $73.50 per share.
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