Overstock.com and its blockchain technology subsidiary company t0.com, Inc. (tZERO), announced today that the companies have signed term sheets with GSR Capital, a Hong Kong-based private equity firm, to invest up to $374.55 million in exchange for common equity in tZERO and common equity in Overstock.com.
Overstock and GSR Capital have also entered into a purchase agreement pursuant to which GSR Capital will purchase $30 million in tZERO security tokens from Overstock. As part of the term sheet agreement, GSR Capital will purchase up to 3.1 million shares of OSTK common stock at a five percent discount to the closing share price on August 1st, 2018.
GSR Capital will also invest up to $270 million for up to 18% of tZERO’s equity at a valuation of $1.5 billion (post-money).
Additionally, pursuant to a purchase agreement, GSR Capital will purchase from Overstock $30 million in tZERO security tokens. These tZERO security tokens were purchased by Overstock during the recently-closed tZERO security token offering in a non-cash transaction in which Overstock forgave $30 million in tZERO intra-company debt.
GSR’s security token purchase agreement replaces the GSR letter of intent previously announced on June 29th, 2018.
The equity transactions are subject to definitive documentation and other customary closing conditions. They also provide GSR Capital with certain rights to allocate a portion of the investments to third-party designees.
“We are honored to have GSR Capital as a strategic investor. The tokenization of securities has the potential to disrupt global capital markets responsible for moving hundreds of trillions of dollars. Together with our partners, we will globalize our blockchain-based platform, bringing more efficiency, liquidity, and trust to capital markets.”
“GSR Capital has the prescience to understand the disruptive power of blockchain capital markets. They are aligned with our vision for the future of capital markets built upon the speed, trust, and security of the blockchain. And most importantly, they think big, and want to help us scale this vision globally as quickly as possible.”
“GSR Capital is very excited to partner with tZERO in its effort to expand the global footprint for blockchain-enabled asset trading including stocks, bonds, commodities, etc. We have a long-term view on how we want to scale this platform on a global basis.”