$404 Million to $100 Million: GSR to Cut Overstock tZERO Investment By 75%

A long-awaited capital infusion for Overstock and its tZERO security token platform has been delayed again - and significantly downsized.

GSR Capital, a Hong Kong-based private equity firm, was supposed to close the $404 million investment on Feb. 28.

Overstock said the deal had not closed, and the parties are now in talks for a much smaller amount - $100 million - to be completed in April.

What's more, an additional investor has been brought in, Makara Capital of Singapore, which Overstock CEO Patrick Byrne described in a press release as a "Key partner of GSR Capital."

GSR and Makara have signed an memorandum of understanding with tZERO to set the terms for a future transaction in which "Makara and GSR would co-lead an investment of up to $100 million in tZERO common stock and close the transaction in April subject to due diligence, negotiation of binding contracts and regulatory approval," Byrne said.

The two firms will also help tZERO with its expansion in Asia and other parts of the world and connect the U.S. startup to the companies they invested in before.

In the earlier agreement, GSR was to invest up to $404 million in Overstock and tZERO, including the purchase of $30 million worth of TZEROP tokens at the price of $6.67 per token and $104.5 million worth of Overstock shares at $33.72 per share.

At the moment, TZEROP is traded on tZERO's alternative trading system at $3.50 per token, and Overstock's shares now are traded at $19.16 per share.

Traders who invested in tZERO have been waiting for news about the deal for several months, expecting it to boost the falling price of the token.

"It's another extension in a long list of them. If I am not sure tZERO is adequately funded, I won't be putting further investment in it."