HAVE YOU HEARD OF MEDICI?
There was plenty of good, solid performance reported in the conference call last Thursday morning, plus the outlook for Q4 looks very strong. But the "sizzle" of the CC didn't make its appearance until the last item on Slide 20 of the presentation. It was one word: Medici. And the first "question" submitted in the Q&A was "Please tell us more about Medici."
The CEO obliged. He told us of the "block-chain" concept of computer software development which is the foundation of Bitcoin. In essence, the block-chain allows a bitcoin to be created and then traces that bitcoin as it changes hands from one owner to another. The CEO views block-chain as a fail-safe way of assuring integrity of the item (bitcoin) being exchanged and its present ownership. In simple terms, Medici envisions application of block-chain to the purpose of operating exchange of securities, namely stocks and bonds. The CEO states that OSTK has taken up the challenge of monitoring the "toll-gate" between the block-chain system of stock/bond ownership globally and the parallel universe of the outside world, meaning the public's participation in the assuredly honest exchange of financial instruments. No more naked short selling, so each company gets honest market assessment of its share value. The potential of Medici? Beyond clear definition at this time.
That, together with the fact that OSTK now has 330 software development professionals and is defining itself as essentially a tech company, is a double helping of sizzle opinion, which I have not seen mentioned in the discussions of the Q3 earnings.