Overstock.com Inc (NASDAQ: OSTK) is having an overwhelmingly rough start to the trading session this morning, and for good reason. In an 8-K filing, the company informed investors of an SEC investigation. Of course, this led to fear among investors, sending the stock tumbling downward. Today, we’ll talk about the news, what we’re seeing from OSTK, and what we’ll be watching for ahead.
OSTK Takes A Dive On SEC Investigation
As mentioned above, Overstock.com is having a rough day in the market today after releasing an 8-K filing, informing investors of an SEC investigation into the company. The investigation has to do with the company’s subsidiary, tZero, which is currently working to raise $250 million through a token sale. The company is also launching a digital token exchange. While the OSTK subsidiary does have a license for an alternative trading system that it gained through an acquisition, the SEC is still investigating the token sale.
Here’s a snippet from the OSTK 8-K that informed investors of the investigation:
In February 2018, the Division of Enforcement of the SEC informed the Company that it is conducting an investigation in the matter RE: Overstock.com, Inc. (NY-9777) and requested that the Company voluntarily provide certain documents related to the Offering and the Tokens in connection with its investigation.
What We’re Seeing From The Stock
As investors, one of the first lessons that we learn is that the news moves the market. In this particular case, the news isn’t good. After all, no investor likes to see an investigation by a regulatory agency. So, it’s no surprise to see that the stock is falling in the market today. Currently (9:23), OSTK is trading at $55.50 per share after a loss of $4.90 per share (8.11%) thus far today.
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What We’ll Be Watching For Ahead
Moving forward, the CNA Finance team will continue to keep a close eye on OSTK. In particular, we’re interested in following the SEC’s investigation into the company surrounding its subsidiary’s token sale. At the end of the day, the investigation could end up putting a damper on the sale. Nonetheless, we’ll continue to follow the story closely and bring the news to you as it breaks!
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