Overstock.com founder and CEO Patrick M. Byrne believes in the efficacy of blockchain technology, and he’s staked millions on the company’s Medici platform.
"Our Medici business cost us $8.0 million pre-tax in the first quarter, which included a $4.5 million impairment charge related to our investment in Peernova," said Byrne. "However, I remain confident that we are doing the right thing for our shareholders by having Medici pursue a position of global leadership in blockchain technology."
Released May 4, the Q1 2017 report for Overstock outlines earnings, expectations, and goals for the coming year, including continued support for their Medici blockchain, which will likely cause the company to incur near term losses and additional expenses. To hedge its bets, Overstock will investigate other options, such as raising capital or divestiture.
Overstock closed the first quarter with an uptick in revenue to the tune of five percent at $432 million versus Q1 2016 at $413.7 million. Despite this gain, the company still posted a loss on net income for Q1 2017, partly due to a $4.5 million impairment charge. Comparisons to Q1 2016 net income of $13.4 million are skewed as well, due to a $19.5 settlement, an influx of income which is neither seasonal, nor repetitive.
An early adopter of blockchain technology, Overstock tapped Robby Dermody and Evan Wagner, developers of decentralized peer-to-peer exchange CounterParty, to help build the Medici blockchain in 2014.
Overstock also sought to diversify investor participation, and in December 2016 became the first publically traded company to issue stock on distributed ledger with help from blockchain technology company T Zero.
In light of its continued support despite expected expenses, Overstock's position may be an indicator for the role blockchain technology will manifest in the future.