Shares of Overstock.com (OSTK) are on the rise on Wednesday morning after Intercontinental Exchange (ICE) announced that it is making a strategic investment in tZERO, a player in blockchain innovation and liquidity for digital assets. Overstock.com owns 80% of tZero. Commenting on the news, Piper Sandler analyst Peter Keith called the strategic minority investment by Intercontinental Exchange and the new CEO appointment "a significant win" for Overstock.com.

STRATEGIC INVESTMENT IN TZERO: Intercontinental Exchange announced that it is making a strategic investment in tZERO, a player in blockchain innovation and liquidity for digital assets. In connection with ICE's investment in tZERO, David Goone, a longtime member of ICE's management team and currently ICE's Chief Strategy Officer, will join tZERO as its next Chief Executive Officer and will serve on tZERO's Board of Directors. "David Goone was present at many of ICE's milestone moments and deals over two decades, a key player on our management team as we built our world-class trading, clearing and data infrastructure and product line, and has been a steward of our problem-solving culture," said Jeff Sprecher, Founder, Chairman and CEO of Intercontinental Exchange. "David's leadership and his mastery of trading, data, and clearing technology will be a big asset as tZERO begins its next chapter leading the growth and adoption of next-generation market infrastructure."

In a research note following the news, Piper Sandler analyst Peter Keith told investors that he views the announcement by tZero of a new CEO appointment and a strategic minority investment by Intercontinental Exchange as a "significant win" for Overstock.com, which owns 80% of tZero. Not only is tZero bringing in a "preeminent leader" from within the financial exchange industry, ICE's investment "provides tremendous credibility" for tZero to form partnerships and license its technology and, over time, create significant value for its blockchain trading capabilities, Keith argued. He kept an Overweight rating on Overstock.com with an $85 price target.

RESULTS: Overstock.com reported fourth-quarter diluted continuing operations earnings per share of 68c and revenue of $613M, with consensus at 32c and $643.99M, respectively. The company also reported fourth-quarter active customers of 8.1M, down 12% year-over-year. Other Q4 highlights included, Last Twelve Months net revenue per active customer was $341, an increase of 26% year over year; Orders delivered were 3M, a decrease of 25% year over year; Average order value was $206, an increase of 23% year over year; Orders per active customer, measured as LTM orders divided by active customers, was 1.67, an increase of 2% year over year; and Orders placed on a mobile device were 50.7% of gross merchandise sales.

PRICE ACTION: In Wednesday morning trading, shares of Overstock.com have jumped over 31% to $47.99.