Overstock (NASDAQ:OSTK) stock is surging higher by about 20% today after it was announced that the internet retailer had won the auction to acquire bankrupt Bed Bath & Beyond’s (OTCMKTS:BBBYQ) intellectual property (IP) and digital assets for $21.5 million. This includes the Bed Bath name, “business data and online properties.” Bed Bath’s brick-and-mortar locations were not included in the deal.
However, Overstock must still receive court approval before moving on with the purchase. A hearing has been set for June 27 to decide on the matter.
Overstock was previously selected as the stalking horse bidder of the auction. Essentially, its bid acted as a price floor and could not be undercut. The stalking horse bid also indicates that no other bidders bid above $21.5 million for Bed Bath’s IP and digital assets.
If the deal falls apart, backup bidder Ten Twenty Four could swoop in and acquire Bed Bath’s intellectual and digital property. Another company to keep in mind is JOWA Brands, which Bed Bath picked as the backup bidder for the IP of its Wamsutta brand.
Bed Bath subsidiary Buy Buy Baby is not included in Overstock’s potential acquisition. A court hearing to decide the future of the infant clothing and accessory retailer will be held on June 28.
5 Investors Betting Big on OSTK Stock
Tracking institutional ownership is important, as these large investors provide liquidity and support for stocks. During the first quarter, 181 filers disclosed a stake in OSTK stock, a decline of 27 filers from the prior quarter. In total, these filers own 30.63 million shares, down from 30.79 million shares. Additionally, only one filer owns OSTK in its top 10 positions. Meanwhile, the institutional put/call ratio as of Q1 sits at 1.46, down from 1.8. That’s equivalent to about 2.29 million puts and 1.56 million calls, implying a bearish options stance.
With that in mind, let’s take a look at Overstock’s top five shareholders:
- BlackRock (NYSE:BLK): 4.77 million shares. BlackRock acquired 188,195 shares during Q1.
- Vanguard: 4.21 million shares. Vanguard acquired 2,670 shares during Q1.
- D.E. Shaw: 1.78 million shares. D.E. Shaw acquired 313,931 shares during Q1.
- Balyasny Asset Management: 1.61 million shares. Balyasny acquired a large majority of its stake during Q1.
- Morgan Stanley (NYSE:MS): 1.02 million shares. Morgan Stanley acquired 183,942 shares during Q1.
On the date of publication, Eddie Pan did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
