I just worked up the nerve to buy $100 worth of bitcoin via the tzero app. The fees were a little over a dollar. It says it will take like 5 days to go through. I also put in an order for $100 of ethereum - its fee was exactly a dollar. There was also some fine print about a dealer fee. Now that it is all done, I see nothing in my wallet, and no indication anywhere that there are pending transactions. The help page says that I should have a history page, but I see no indication of that.

One more comment about Dinosaur. It shows today's action for OSTKO, which is the digital version of the preferred shares. The price range is $75 to $80 (aside: the volume is only 4 shares). If I understand right, these shares should sell more or less in the ballpark of the regular shares. Am I missing something here?

My wired funds arrived at Dinosaur. I put in a limit order for TZROP (the symbol for tZERO) at 1 cent above the current bid, and the bid moved up accordingly. The commission seems to be 1% of my bid, which is fine because I am only trying to buy a few hundred dollars worth. I can't find any statement on the website for what exactly the commission policy is, but 1% would be unacceptably high for a larger transaction.

Here is a short explanation. Someone writes an option which commits to buy or sell a number of shares up to an expiration date at a set price. Someone else buys the option with the idea that in the future they will want to exercise the option (as in force the other guy to sell or buy), but they don't have to exercise it if it turns out not to be beneficial. The writer of the option does not have to borrow anything, or otherwise supply anything up front. They just have to maintain enough equity in their account to be able to cover their end of the transaction if it does get exercised. On the other hand, a short seller actually borrows someone else's shares and then resells them, hoping that they can buy back the shares in the future at a lower price and then return them to the original owner. The short seller has to pay interest on their borrowing, and they have to maintain enough equity in their account to be able to buy back the shares at any time. When you lend out your shares you lose your ability to vote. With regard to dividends the lender does not receive them from the company, but the borrower has to make them up to the lender. This leads us to the discussion of the 10% digital shares dividend. The borrower won't receive it, because he or she has sold their shares to someone else. So the borrower (i.e., the short seller) would seem to have to acquire some digital shares to deliver to the lending party. If it happens that way it will be very interesting, but it may not, as the guy who wrote the recent negative piece on Seeking Alpha suggested that there could simply be a cash substitution. ... not such a short explanation after all.

MM158, it does sound like you're a bit confused about options. There is no borrowing associated with options. Borrowing occurs in short selling.

A thought occurs to me about the high level of institutional investment. I imagine that they are lending their shares to short sellers, and thereby receiving a substantial income return on their investment. They don't need the share price to rise to do well, it just needs not to drop too much.

For some reason my bank (a credit union) makes it hard to do a wire transfer online. It occurred to me to try my brokerage instead, and there it looks easier. I made the request and it says it went through. How long did it take for the money to show up in your Dinosaur account?

Today's recovery makes me think that the drop yesterday was an irrational reaction to the "deep state" comments. On a similar topic, I just went to my mailbox an found a letter with the name Patrick Byrne in the return address. It is a solicitation to contribute to EdChoice which it seems he is the chairman of. EdChoice was founded by Milton Friedman and his wife, and it advocates for school vouchers. I won't belabor it, but politics are an issue here.

What was it like buying the tokens? I assume you put in a limit order? How quickly did it fill?

I had the same experience with the tZERO app. To send money to Dinosaur it looks like you have to wire the money, which I think I'd have to go to the bank to do. You can't even mail a check. Seems like a needless hassle.

No responses to my question about who has signed up with Dinosaur. Here is another question: has anyone here ever bought something off of the retail site? I looked at it, but would have a hard time finding something to buy. On the other hand, I'm not much of an online shopper. How can you buy shoes without trying them on?? But I know some people do. How about it people, does anyone out there actually shop on their site?

Did anyone open up an account on Dinosaur since it became open to all? If so, what do you think? It seems pretty rinky dink to me, which is a big concern.

BTW, here is what it shows for today's market activity, (sorry I can't figure out how to format it):

Symbol Last Price Bid Ask High Low Volume
OSTKO $45.00 — — $45.00 $45.00 1
Trade
TZROP $4.00 $3.75 $4.45 $4.99 $4.00 2,401

Basically, it shows that the volume for the preferred today was exactly one share, and the price was $45. I'm pretty sure that the share price ought to be in the ballpark of the price of the regular shares, so that is a pretty dreadful market.

Here is a long article from a short. The one thing that makes it worth reading is the part about how the dividend will be distributed. He addresses the questions I had about how people who don't have Dinosaur accounts might receive it, basically saying it could be allowed to substitute cash. Maybe true, maybe not, but we do need to think about these things.

https://seekingalpha.com/article/4284963-overstock-negative-reality-lurks-just-around-corner-short-90-percent-downside

The latest lending rate that I am receiving from Schwab is 24.5%. It has been pretty much a slow steady drop over the last three weeks or so.

Are we to understand that today's drop is due solely to the Patrick Byrne deep state comments? If so, what exactly is the concern?

The question is what is Fidelity going to do when you receive the token dividend. I assume that they will not have the capacity to hold it in your account. I have the same question for non IRA/401K type accounts, but I think that the IRA/401K accounts are trickier with regard to rules.

Mary, I think your reasoning is correct. How this is going to work for your 401K has got me wondering though. I hope they have thought this all through. I am seeing this more and more as a way to stick it to the short sellers, which I am all for, but if it also causes headaches for regular long shareholders this could be a disaster.

The rate I am receiving lending out my shares (which would be less than the rate the shorts have to pay) is currently 30%.

Here's some extra for experts where you can read the fine print about what the preferred stocks are exactly.

http://archive.fast-edgar.com//20190730/AT22G22CZ222A2Z2222M2234KQIAX62232B2/

In many ways the preferred shares are the same as regular shares: voting, future dividends.
In some ways they are better: extra 1% dividend, some sort of priority in case of bankruptcy.
In one way they are inferior (maybe): they are subject to redemption, which means that the company can unilaterally decide to buy them back. The formula for the price is:
"The redemption price for any shares of Series A-1 Preferred to be redeemed (the “Redemption Price”) shall be payable in cash, out of funds legally available therefor, and shall be equal to the highest of the following: (1) $15.68 plus any Accrued Dividends; (2) 105% of the average trading price of the Common Stock during a five-trading-day period determined by the Corporation in its sole discretion (the “Trading Period”); and (3) 105% of the average trading price of the Series A-1 Preferred during the Trading Period."

I'm not super-worried about shenanigans, but I find "a five-trading-day period determined by the Corporation in its sole discretion" kind of weird.

I will also note that the deadline for the company to invoke redemption is the end of 2019. Once that date has passed, it seems like the preferred are the same as the regular, plus a few perqs.

I do feel like they have been working the legal part of all these very thoroughly, so I guess I should expect that they've worked out how this can be done properly. Like I said in my other post, the conversion of Series A to Series A-1 has similar weirdness to the dividend, so if they can do the one they can probably do the other.

Actually now that I think about it, there is already a precedent for giving regular shareholders digital shares - the conversion of the old Series A preferred to the digital A-1. Did anyone here own any Series A? That would give an idea of the mechanics of a distribution. It is noteworthy that a small fraction of the Series A was converted to a new Series B rather than to the A-1. The Series B lives in the conventional securities world. Maybe that's what they gave non-accredited holders of the Series A?

The gist of that article is that the short sellers will have to deliver the dividend to the parties that they borrowed from. So they will have to buy, or cause to be bought, shares of the preferred, which sell only on the tZERO/Dinosaur platform. Actually, I could see this being frowned on by the market authorities and the brokerages that hold our OSTK shares. How are they supposed to deal with this? It is kind of like if a company decided to give out a t-shirt for every 100 shares you owned. Your brokerage doesn't want to deal with that. Maybe they could just mail you out a coupon or something like that. Anyway, I will be very interested to see how this all plays out. Meanwhile on Dinosaur, there is no indication that any of the A-1 preferred have traded ever. I would like to know what that's about. I don't think that the shares are locked up or anything like that.

I went to the source for the announcement of the preferred dividend and now feel clearer on a few things. Basically, it looks like you will be required to have an account with Dinosaur. Another interesting note is that the dividend will be given not only to OSTK shareholders, but also to holders of the currently issued preferred shares. Also, it looks like there will be a 6 month holding period before you can sell the dividend shares.

http://investors.overstock.com/news-releases/news-release-details/overstockcom-inc-declares-dividend-one-digital-share-every-ten

My guess is that the reason they are doing this is to get people to open accounts on Dinosaur. Presumably everyone will be eligible to open a Dinosaur account by then, but if you are concerned the release has a phone number you can call to ask questions.

The marketwatch link I posted said this:
"The majority of existing shares of the Series A Digital Preferred Stock OSTKP have been converted into the new Digital Voting Series A-1 Preferred Stock, OSTKO, with others converted into Series B Digital Preferred stock, OSTBP. The Series A Digital Preferred Stock OSTKP will be retired following the conversions."
Note that it refers to both the old preferred OSTKP and the new series B OSTBP as "digital." This was throwing me off, but I think you are right that the new preferred OSTKO is the only digital one.

This has some good stuff:

https://seekingalpha.com/pr/17569719-tzero-ceo-saum-noursalehi-issues-statement-company-milestones-and-planned-roadmap-2019

"The tZERO Crypto App provides numerous interesting and unique features, the most important of which is to serve as a foundation for the eventual trading of all digital assets, as well as many non-digital assets (e.g., common stocks). When we get a tZERO subsidiary approved as a broker-dealer that can handle retail clients and provide other services, we will work to add functionality to trade both security tokens and traditional equities through the web, iOS, and Android."
-- so yes, eventually the app will be able to deal in securities tokens (such as the tZERO token and OSTKO), but it doesn't sound like that is happening soon.

A goal: "Enhance liquidity on PRO Securities ATS. PRO Securities plans to add additional broker-dealers as subscribers to the ATS, and explore partnering with more clearing firms. The aim is to have three to five broker-dealers as subscribers to the PRO Securities ATS, trading security tokens by the end of the year."
-- So right now there is only Dinosaur, which I will say is pretty crappy, but later there will be others. My understanding now is that Pro Securities ATS is analogous to the Nasdaq or NYSE, and Dinosaur is analogous to Schwab or Etrade.

"The tZERO tokens issued in August 2018 in a private placement are anticipated to become freely tradable by non-accredited investors in August 2019."
-- I would guess that at that point Dinosaur will allow nonaccredited investors to open accounts.

It's hard to tell what is going on. I've been reading this over and over and am kind of going in circles:
https://www.marketwatch.com/press-release/overstockcom-issues-new-digital-voting-series-a-1-preferred-stock-ostko-2019-06-27
It seems to imply that you would have to have a dinosaur account but also says that tZERO tokens were issued into "a tZERO custodial wallet on behalf of investors." I'm not sure what the word "custodial" means here.

The other thing I learned from this article is that there are still preferred shares that trade on a conventional exchange. It says that some of the old preferred was converted into "Series B Digital Preferred stock, OSTBP," which it says "will continue to trade on NASDAQ." I see that I can get a quote on OSTBP. The last price is $16/share. Volume is very low. I wonder what exactly is "Digital" about it.

I guess I'm a little confused here. I signed up on https://dino.tzero.com, where I can buy tZERO tokens and OSTKO (Overstock preferred). I also installed the the "tZERO Crypto" app on my phone and opened an account where I can trade Bitcoin and Ethereum. I was assuming that the preferred shares had to be on dinosaur, but I'm not sure. The tZERO app seems more like a wallet. I haven't made a trade on either.

I just noticed that the MGX Renewables shares have shown up in my account. There is no symbol, just a number: 553CNT015. I wonder how long ago this happened. It says here that listing was expected on July 22, and that the symbol will be MGXR:
https://www.mgxminerals.com/investors/news/2019/476-mgx-minerals-announces-subsidiary-mgx-renewables-inc-approved-to-list-on-the-canadian-securities-exchange.html

I wonder how the preferred dividend will work for short sellers. In general when you sell short you are responsible for paying any dividends to the party that the shares were borrowed from. In the case of cash dividends the broker can just take the cash out of the short seller's account. If the dividend were shares in something that traded on a conventional exchange, then I suppose the broker could buy the shares on the open market. But what about the Overstock preferred shares? They are only on tZERO, right? Am I right that you have to be an accredited investor to get an account? ... Or did I read that it will be open to nonaccredited investors soon? Regardless, it seems like the brokers will not be able to do this distribution automatically. Sounds like a mess, which might be the idea.

I was looking at the 3 month chart and found the volume to be very interesting. Such a distinct lull between late May and late June.

"In January, the tokens will come available for trade on tZero's own trading platform by institutions and affluent individuals that meet the SEC's accredited investor standard. In August, the trading will open up to all investors. By the end of the year, Overstock CEO Patrick Byrne hopes to have as many as 60 blockchain-based security offerings underway on tZero."

So I opened an account on Dinosaur. Right now there are exactly two things you can buy through them: tZero itself, and Overstock preferred shares. Actually, I'm not sure you can trade the latter, since it shows no historical price. I will be interested to see what new securities get added, but for now there is not much going on there.

Here are a couple of videos I watched to try to get a better handle on what we are trying to do.

This one is a general information type interview with the CEO of tZERO, Saum Noursalehi.

Very interesting about Byrne and Butina. I knew nothing about this, actually, pretty much nothing about Butina at all. This article is a little shorter and easier to understand:

https://dailycaller.com/2019/07/26/maria-butina-exculpatory-fbi-informant/

Last night I went to a big Schwab event (free food, drinks, etc) that featured one of their top analysts, Liz Ann Sonders, as a speaker. Her area is markets at the macro level (interest rates, tariffs, earnings, etc) but I wanted to ask her about security tokens and OSTK. Basically I wanted to know if she thought that if things go ahead like OSTK wants, how much would it affect the broader markets. I decided to ask after the formal Q&A rather than in front of the full audience, which turned out to be a good thing. Basically she had no idea what I was talking about, so it was kind of awkward. I should note that in the formal presentation she was very dismissive of Bitcoin and Facebook's Libra (she couldn't actually remember what it was called). I can understand that she might not be a fan, but I would have thought she'd have some curiosity. So my takeaway from all this is that if blockchain and crypto are going to come up big, there is still time to get in before the crowd.

Borrowing interest rate update: it peaked at 39% on 7/17 and has since trickled back to 34.5%.

I wonder if this could take off as a cause. Had anyone here ever heard of this before?

https://www.bloodbattery.org/?gclid=EAIaIQobChMI38Tn0-rI4wIV_ymtBh2r5QCYEAEYASAAEgKB7PD_BwE

ASPT trades on the gray (or grey) market. This means there are no bid and ask, no market makers, no quotes. How exactly it works it is not clear. You can read about the trading experiences of a few people on this board:
https://investorshub.advfn.com/Haber-Science-Inc(fka-HABE)-989/
As far as I know nothing has changed in the status of the company, but if something did, I'm not sure how we would find out.

Here is an article from June 1 listing the highest interest rates for short sellers at that time, giving an idea of what are considered high rates.
https://www.marketwatch.com/story/these-are-the-most-expensive-stocks-for-short-sellers-to-borrow-2019-05-30
"Controversial e-commerce and cryptocurrency play Overstock.com Inc. OSTK, +3.14% cracks the list as well with a 15% borrow fee."

BTW Schwab rate is now 38%.

Borrowing rate to 36%

Here is an article on short selling, which addresses the issue of the borrowing rate:
https://financetrain.com/short-selling-and-stock-borrowing-costs/

"The typical fee for a stock loan is 0.30% per annum. In case of short supply, when many investors are going short on a stock, the fee may go up to 20-30% per annum."

So according to this, the interpretation of the high rate is that there are a lot of enthusiastic short sellers, rather than a shortage of shares available to borrow. On Schwab I can see the percent of shares sold short, but I don't think it is updated very often. Is there was way to know the short interest on a day to day basis?

As far as I can tell it is business as usual. I was able to enter an order on etrade just now. Unless you noticed something that changed, I'd say that it just doesn't get traded very much.

My main question though was is there a notion out there that the whole business is up for sale, not just a spin off of the retail.