As stated in a shareholder letter last week, tZERO – Overstock’s Blockchain security token trading subsidiary – has failed to secure a $100 million capital injection on the selected date.
Specifically, tZERO aimed to close the fund – raised by China-based investment company GSR Capital, along with the Singaporean private equity firm Makara Capital – by mid-April. According to the letter, Overstock CEO Patrick Byrne claimed that although there are no major malfunctions from both parties happened during the processes, “the parties will not have a definitive deal in place by the mid-April target.”
“tZERO plans to continue facilitating Makara’s diligence, but is not under any exclusivity with Makara or GSR and has retained advisors to pursue parallel alternatives.” Byrne further expressed.
However, it is compulsory that GSR purchases $30 million worth of tZERO token out of the targeted $100 million, as stated in a binding agreement – Memorandum of Understanding – signed by GSR and Overstock.
GSR has initially agreed on an investment deal of $404 million for tZERO in August 2018. $270 million of which would be used to buy 18 percent of tZERO’s equity at a valuation, $30 million for Overstock tokens and around $104.55 million for Overstock’ shares.
“I remind shareholders of the $30 million binding tZERO security token purchase agreement between Overstock and GSR…. Under that agreement, GSR has a binding $30 million funding obligation for May 6.” Byrne expressed.
Last month, tZERO is reportedly planning on the launch of its own cryptocurrency trading app later this year. The platform is expected to enable various kinds of cryptocurrency trade including Bitcoin and Ethereum.