Active Stocks: Overstock.com [NASDAQ: OSTK] was a big gainer on Friday. The stock closed the week at $11.57 up by about 15%. This bullish sentiment looks set to spill over into this week. At the time of writing, Overstock is up in pre-market trading. If it can push above Friday’s high of $12.09, which is now a short-term resistance, then we could see continued momentum. If it opens trading above this level, it would be an indicator of bullish momentum, and a possible green start to the week.
Overstock’s bullish run is driven by the CEO’s comments that the company wants to get more heavily involved in the cryptocurrency industry. He also stated that the company has received several offers to sell its e-commerce business. Selling its e-commerce business could allow the company to be more focused on blockchain technology through Tzero.
Tzero is quite revolutionary, and intends to get rid of the inefficiencies that currently characterize Wall Street. By using proprietary technology, Tzero is opening up liquidity in illiquid investments, thereby making the financial markets even more robust. The system is also decentralized, which means it is transparent, a factor that is key to achieving efficiency in the markets. While Tzero is still relatively small and may not add much to overstock’s bottom-line at the moment, it holds lots of potential for the long run. This explains the positive momentum that is building around Overstock at the moment.
In essence, though the company’s books don’t reveal much in terms of growth, the increased uptake of cryptocurrencies could give it the momentum it needs to grow. In the past year, the uptake of blockchain technology has been exponential, even though crypto prices haven’t been picking up at the same rate. However, they too seem to be catching up. It’s an indicator that momentum is rebuilding around cryptocurrencies. For companies such as Overstock.com that are betting big on this technology, future prospects could be good.