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Overstock’s Series A Shares Transition to tZERO Security Token Trading Platform
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In a letter to Series A Preferred stockholders dated May 1st 2019, Overstock.com announced a transfer of the Series A shares to the tZERO security token trading platform. The new shares— identified as Series A-1 shares— will have the same rights but less restrictions.
Overstock’s Series A Shares Transitioning to tZERO Explained
According to the letter, the transition is being made to “enhance [shareholder] trading experience”.
The transition involves the issuance of new ‘Series A-1 shares’ as part of a new series of preferred stock, in exchange for the old Series A shares.
The new shares will retain the same rights as the old shares, including rights to both dividends and voting.
The difference, says the letter, is the following:
“…the new Series A-1 shares will not be subject to all of the restrictions on ownership and related matters that apply to the current Series A Shares and, as a result, the new Series A-1 shares will be able to trade on the tZERO securities token trading platform.”
Stockholder Permission Needed for Overstock’s New Series A-1 Shares on tZERO
For the transition to take place, stockholder permission is required.
If permission is granted, stockholders will be required to create an account with tZERO’s brokerage account partner, Dinosaur.
tZERO is a highly anticipated security token trading platform, seeking full regulatory compliance in the United States. tZERO raised $134 million during its initial offering, with their security tokens beginning to undergo live trading in January 2019.
Security tokens typically differ from other digital assets through one primary way. By explicitly declaring themselves securities, security tokens algorithmically enforce their respective securities laws. For more on security token functionality, be sure to review our comprehensive security token guide.
One additional security token trading platform is also live and seeking full regulatory approval in the United States— OpenFinance Network.
What do you think of Overstock’s transition to Series A-1 shares and the tZERO security token trading platform? How long will it take before other companies make similar transitions? We’d like to hear your thoughts in the comments section below.
Image courtesy of tZERO.
Tim Fries
Tim Fries is the cofounder of The Tokenist. He has a B. Sc. in Mechanical Engineering from the University of Michigan, and an MBA from the University of Chicago Booth School of Business. Tim served as a Senior Associate on the investment team at RW Baird's US Private Equity division, and is also the co-founder of Protective Technologies Capital, an investment firm specializing in sensing, protection and control solutions.
