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Dear tZERO Investor,
As I mentioned in my previous letter, we are taking proactive steps to enhance the dialogue with our investors, and we hope you find these letters valuable.
I would like to begin by addressing Patrick Byrne’s resignation as the CEO of Overstock. While we are sad to see him go, I can assure you that Patrick’s departure will have no impact on tZERO’s day-to-day operations or the execution of our roadmap.
Some have speculated that our interactions with the
On the topic of regulation, it is important to note that tZERO owns two broker-dealers. As part of these businesses, we interact with a range of regulators, including FINRA and the
The second set of interactions pertains to an
I am pleased to report that we continue to execute against our strategic roadmap. Below is a list of our accomplishments since my last letter, two months ago.
Since its launch, our app has received thousands of organic downloads and trading volumes have been increasing steadily. In fact, transaction volumes in August were up over 100%, compared to July. We plan to start ramping up marketing of the app in the coming months.
It is also worth highlighting that while customers across several key regions, including
This dividend, which has a record date of
All investors that create an account at Dinosaur Financial are now permitted to trade the tZERO security token. Since this announcement, we have seen a notable increase in volume of investors onboarding to trade on the PRO Securities ATS through Dinosaur Financial, and we anticipate that trend to continue, particularly as we introduce additional broker-dealers.
This should improve practicality for investors using the platform, resulting in an increase in investor deposits, and ultimately liquidity on the PRO Securities ATS.
7. July - August: Filed for eight additional technology patents.
We believe our growing portfolio of intellectual property helps to differentiate tZERO and remains a key component to our long-term strategy of owning the security token ecosystem. As I look forward through the end of 2019 and into 2020, I expect our R&D to produce several more patent filings.
Overall, we are encouraged by our recent momentum and believe that we are well positioned to capitalize on some exciting opportunities ahead.
Our Current Priorities
Over the past twelve months we have made significant progress building out our end-to-end ecosystem. As a result of this progress, our primary focus has shifted from build, to growth and adoption.
To accomplish this, we are currently focused on four key areas.
1. Onboarding Quality Issuers
The foremost priority is to bring high-quality security tokens to the PRO Securities ATS.
We believe onboarding new issuers will result in increased investor interest and liquidity, which is our second priority.
2. Improving Liquidity on the PRO Securities ATS
In addition to onboarding more security tokens, another strategy for increasing liquidity is to subscribe additional broker-dealers to the PRO Securities ATS. We are leveraging our relationships with approximately 140 broker-dealers through our Speedroute subsidiary.
Given the broad ownership of Overstock common shares, we anticipate increased adoption of our platform from broker-dealers interested in allowing their clients to participate in the trading of the OSTKO digital preferred shares.
In addition to onboarding third-party broker dealers, one of our wholly-owned subsidiaries has also filed the new member application to operate as a retail broker-dealer. This subsidiary recently submitted responses to FINRA’s questions regarding its application and is awaiting the next steps.
3. Enhancing & Scaling Our Security Lending Solution
By leveraging our blockchain technology, our digital locator receipt (DLR) product provides clear and accurate insights into pricing and inventory, which reduces costs associated with the opaque systems that exist today. We recently completed the market data feed portion of this product, which aggregates supply of hard-to-borrow inventory from multiple sources. The next phase is for us to integrate this technology into our order management system, which allows short sellers on the demand side to introduce bids and receive locates on hard to borrow. We anticipate that this new product will launch next month.
4. Launching the First Regulated National Security Token Exchange with BOX Digital Markets
Lastly, we continue to work with our partners at BOX Digital Markets on launching the first regulated national security token exchange through our joint venture, the Boston Security Token Exchange (BSTX). We will continue to update you as this progresses. We are currently aiming for an early 2020 launch.
While it has been a busy summer, I am encouraged by the consistent progress we have made deploying our technology, forming new partnerships and expanding our patent portfolio. We are excited about the opportunity ahead and will continue to keep you informed as we execute our vision of revolutionizing capital markets.
Thank you for your continued support.
Investors should note that trading security tokens could involve substantial risks, including no guarantee of returns, costs associated with selling and purchasing, no assurance of liquidity which could impact the price and ability to sell, and possible loss of principal invested. Further, an investment in single security token could mean lack of diversification and, consequently, higher risk.
As of the date of this press release, tZERO has not authorized peer to peer transfers of the tZERO security tokens. tZERO security token holders may resell their tZERO security tokens on the
No Offer, Solicitation, Investment Advice or Recommendations
This release is for informational purposes only and does not constitute an offer to sell, a solicitation to buy, or a recommendation for any security or token, nor does it constitute an offer to provide investment advisory or other services by the tZERO or any of its affiliates, subsidiaries, officers, directors or employees. No reference to any specific security or token constitutes a recommendation to buy, sell or hold that security or token or any other security or token. Nothing in this release shall be considered a solicitation or offer to buy or sell any security, token, future, option or other financial instrument or to offer or provide any investment advice or service to any person in any jurisdiction. Nothing contained in this release constitutes investment advice or offers any opinion with respect to the suitability of any security or token, and the views expressed in this release should not be taken as advice to buy, sell or hold any security or token. In preparing the information contained in this release, we have not taken into account the investment needs, objectives and financial circumstances of any particular investor. This information has no regard to the specific investment objectives, financial situation and particular needs of any specific recipient of this information and investments discussed may not be suitable for all investors. Any views expressed in this release by us were prepared based upon the information available to us at the time such views were written. Changed or additional information could cause such views to change. All information is subject to possible correction. Information may quickly become unreliable for various reasons, including changes in market conditions or economic circumstances.
tZERO is not a registered broker-dealer, funding portal, underwriter, investment bank, investment adviser or investment manager, and is not providing brokerage, investment banking or underwriting services, recommendations or investment advice to any person, and does not provide any brokerage services. tZERO takes no part in the negotiation or execution of secondary market transactions for the purchase or sale of securities and at no time has possession of investor funds or securities in connection with such transactions.
This press release contains certain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Such forward-looking statkjkkements include all statements other than statements of historical fact. Additional information regarding factors that could materially affect results and the accuracy of the forward-looking statements contained herein may be found in the Overstock’s Form 10-Q for the quarter ended
Michael Mougias, +1-347-293-1248
Alexandra Sotiropoulos, +1-347-293-1416