What Happened:
Shares of online home goods retailer Overstock (NASDAQ: OSTK) jumped 9.16% in the pre-market session after the company won an auction for Bed Bath & Beyond's intellectual property and digital assets (physical store assets were not included). Overstock.com will acquire Bed Bath & Beyond's brand name, business data, and digital assets for $21.5 million. The sale price matches Overstock's stalking horse bid (Floor price at the auction), suggesting Bed Bath received no higher or more attractive bids. Some of the assets acquired in the deal could help to realize cost-effective ways to boost sales and improve customer acquisition.
What is the market telling us:
Overstock's shares are very volatile and over the last year have had 48 moves greater than 5%. In context of that, today's move is indicating the market considers this news meaningful but not something that would fundamentally change its perception of the business. The previous big move was 8 days ago, when the stock gained 9.22% on the news that the company bid $21.5 million for Bed Bath & Beyond intellectual property assets such as mobile application rights (stores would not be part of the deal). Some of the assets potentially acquired in the deal could help to realize cost-effective ways to boost sales and improve customer acquisition.
Overstock is up 30.1% since the beginning of the year, but at $24.54 per share it is still trading 28.1% below its 52-week high of $34.13 from August 2022. Investors who bought $1,000 worth of Overstock's shares five years ago would now be looking at an investment worth $734.23.
Is now the time to buy Overstock? Access our full analysis of the earnings results here, it's free.