Online retailer Overstock.com Inc. (OSTK) reported a narrower loss in the first quarter of 2019 helped by lower costs and expenses. However, the bottom line missed analysts’ expectations. Total revenue fell by 17% year-over-year to $367.7 million, primarily due to a significant reduction in sales and marketing expenses as part of its effort to return to retail profitability.
In January 2018, the company shifted its retail strategy to aggressively pursue revenue growth and new customers with a large increase in sales and marketing expenses. Overstock discontinued this strategy in August 2018 and has now returned to a disciplined approach to marketing.
Net loss was $39.2 million or $1.18 per share, narrower than the previous year quarter’s loss of $50.9 million or $1.74 per share.
The blockchain technology remained the major sought out happening in the tech world and Overstock is transforming itself into a blockchain business rather than being in e-commerce. Overstock already launched an investing firm Medici Ventures — a public digital ledger of transactions on the blockchain technology. It is also said to be developing its own security tokens for e-commerce and trading.
Over four years ago, the company began building, buying and assembling the components of a blockchain-based capital market. Overstock has deployed well over $100 million of capital over four years in that quest.
Starting in few weeks, the company is rolling out its full kit of technology and apps for security token trading: a crypto trading app, migration of OSTKP to a token, integration with issuance platform Securitize allowing it to bring live on tZERO tokens issued by Securitize, and DLR 2.0 in August.
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Overstock announced the appointment of Dave Nielsen to President of Overstock.com’s retail business, a position that was recently held by Overstock CEO and founder Patrick Byrne. As a result, Nielsen will transition his role as Chief Sourcing and Operations Officer to Ron Hilton, former VP of Sourcing. These changes are effective immediately.
In addition to the changes in Overstock’s retail management, there are adjustments to its board of directors. Kirthi Kalyanam served out the end of his three-year commitment to the board and will now fully devote his time to the completion of a book on retailing. Saum Noursalehi is also stepping down from the board to take a position on the tZERO board, maintaining his role as CEO of tZERO. There are no immediate plans to fill these positions.
Shares of Overstock ended Wednesday’s regular session down 3.75% at $12.07 on the Nasdaq. Following the earnings release, the stock inched up over 3% in the premarket session.