Beyond, Inc. has issued a letter to the management and board of blockchain-based financial technology company tZERO requesting immediate action to create shareholder value, including consideration of an initial public offering.
Beyond owns Bed Bath & Beyond, buybuy Baby and Overstock, and it has an investment in Kirkland’s Home (soon to be renamed The Brand House Collective), which plans to open new Bed Bath & Beyond Home and buybuy Baby stores.
Before changing its corporate name to Beyond while operating under the Overstock brand, the company spun tZERO into a separate entity, retaining a substantial share. As its own operations have evolved, Beyond has worked with tZERO in issuing tokenized digital securities associated with its Overstock.com and BuyBuyBaby.com operations.
Marcus Lemonis, Beyond executive chairman and principal executive officer, said in announcing the move, “After experiencing the capabilities at tZERO through two solid token offerings, assessing the favorable market conditions for peers in this space and having increased confidence in tZERO’s management team, we believe the time is now for tZERO to improve shareholder value by evaluating various options to become a listed company, whether directly, through an IPO, or via a special purpose acquisition company, on the New York Stock Exchange.”
He said the letter sent to tZERO demanded immediate due diligence and a call to action. “With its regulatory infrastructure, leadership, backing and innovative framework, tZERO is poised and ready to enter this blockchain-favorable market,” Lemonis said.
Beyond’s letter to tZERO, written over Lemonis’ signature, began:
“On behalf of Beyond, Inc.’s executive management and its board of directors, I want to outline our expectation that the tZERO management team and board of directors explore opportunities to create shareholder value in this blockchain-favorable market for its longstanding investor base. We believe the best current opportunity is to explore taking tZERO public through an initial public offering or alternative on the New York Stock Exchange. After years of substantial investment, increased innovation and shareholder patience, we believe tZERO is at an exceptional inflection point, ready for the market stage supported by a favorable blockchain-friendly backdrop.”
The letter continued citing arguments for the public offering include tZERO having a unique, fully regulated ecosystem and end-to-end blockchain-based capabilities from alternative trading system capability and transfer-agent services to SEC/FINRA-approved digital asset custody, placing it among only two U.S. broker-dealers with such an approved regulator-compliant infrastructure. The letter noted ICE, parent company of NYSE, led tZERO’s last capital raise and brings unmatched institutional credibility to tZERO. The letter further noted tZERO’s differentiated assets will be more visible and valued to capital markets, and Beyond’s subsidiaries have participated in two productive token offerings using tZERO’s platform and another is in the works, which should result in additional tZERO visibility.
As to market conditions, Beyond added ReserveOne, a crypto treasury platform, recently announced a $1 billion Special Purpose Acquisition Company deal to go public, signaling strong investor interest. It added Fintech platforms such as Forge Global and EquityZen have already chosen to enter the public arena via SPACs. Companies with regulated infrastructures similar to tZERO have enjoyed public valuations commonly reaching multiples in the $1 billion to $2 billion plus range.
TZERO, if it goes public, will get broader access to capital, public board governance and enhanced board diversification, an immediate liquidity opportunity to support ongoing investment and fund future innovation, and more visible acquisition optionality and credibility, the letter asserted.
Beyond characterized tZERO’s current management team as having a deep understanding of the digital asset landscape and a demonstrated an ability to navigate the complexities of the evolving market while driving innovation, generating confidence that tZERO can thrive as a public company. In addition, the letter indicated Beyond’s board can bring value to a potential transition as it can introduce tZERO to a network of strategic partners, helping facilitate deal flow and growth opportunities through its extensive business relationships and industry access.
“In closing,” Lemonis wrote in the letter, “this is a pivotal time for tZERO. We believe that a public listing on NYSE could magnify its strengths, secure its market leadership and deliver shareholder value. I look forward to discussing this further and working with you to take tZERO to its next level.”
