Overstock.com, Inc. OSTK is launching a mobile wallet app for buying and using cryptocurrency, leading investors to spend traditional money snapping up the stock Friday morning.
DA Davidson’s Tom Forte reiterated a Buy rating on Overstock with a $48 price target.
The crypto mobile wallet app, called tZERO, for now will run on Apple Inc. AAPL’s iOS mobile platform, but the company said it will offer an Android version soon. It will allow customers to buy, hold and sell different cryptocurrencies, starting with bitcoin and Ethereum.
“We consider the launch of tZERO's crypto mobile wallet as a significant milestone for the company and recommend investor purchase shares on the announcement,” Forte wrote in a note.
A key feature of the new mobile wallet is one intended to let consumers recover a private key for their cryptocurrency. The issue of the security keys – and the prospect of losing access to bought crypto currency if a consumer loses their key – has been “a structural challenge for crypto currencies,” Forte said.
Forte said things were already looking good for Overstock, whose CEO recently said the company's better-known legacy retail business is on track for $20 million of adjusted EBITDA in 2019, up from $15 million.
Overstock is in the process of looking for a buyer for its legacy home e-commerce business, and said recently it has some interest.
Overstock shares traded higher by 2.3% at $13.32 Friday afternoon.
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