Why Overstock.com Shares jumped 20% in November

What happened

Overstock.com (NASDAQ: OSTK) shareholders beat a surge in November as their stock rose 20% compared to the 11% rise in the S&P 500, according to data provided by S&P Global Market Intelligence.

The rally kept the company, which runs an e-commerce business and cryptocurrency platform, well ahead in 2020.

A man at work behind a computer screen.

Image source: Getty Images.

So what

Overstock’s retail division is concentrated in the home furniture space and is enjoying growing growth as consumers move spending into that niche from other areas such as travel and dining out. Some of November’s growth can be tied to its strong growth metrics in that space. The company revealed in late October that the division had more than doubled its volume in the quarter ending September 30.

But investors were even more excited about surge valuations for cryptocurrencies like bitcoin. That spiral raises demand for the Overstock trading platform, giving the business a major source of earnings in 2021 and beyond.

What now

To date, Overstock’s blockchain assets have not had a positive impact on its reported sales or profits. That should change given that its tZERO Markets platform was launched at the end of October. Investors may see some impressive early growth figures from that division, given the intense interest in digital assets and cryptocurrencies. But it is not yet clear whether Overstock can generate consistent, profitable business from the untested technology.

Editor’s note: This article has been corrected. This is the tZERO Markets platform launched in October.