Overstock, Dell & Dish: Pay Dividends in Bitcoin

[coins101]

There are many great companies now accepting Bitcoin as payment.

However, for many of them this simply means taking payment as Bitcoin and then selling those coins as soon as possible. At times, this can have a downward impact on Bitcoin prices.

They sell their Bitcoins immediately to avoid price volatility (which they now contribute to) and because accounting rules stop them from holding Bitcoin for any lengthy period of time.



Please support a campaign to request that stock market listed businesses offer to pay shareholders in Bitcoins or Fiat.

Corporations report figures on a quarter by quarter basis. There is nothing to stop corporations holding Bitcoin for 2-3 months at a time and paying dividends in Bitcoins at more regular intervals. Any fiat they would retain could be used for cashflow within the business.

It is likely that paying dividends in Bitcoin would work out cheaper for them as they would avoid the relatively high costs of processing small dividend payments.

Suggestions, flaws, support, legal issues, accounting and tax issues, etc from preventing this from happening are welcome.

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[zorke]

First accounting rules do not prevent companies from holding onto bitcoin. They make the company appear to be taking on more risk (which they would be) if they hold bitcoin.

Secondly they do not make anywhere near enough revenue in bitcoin to potentially be able to pay dividends in this mannor. They have billions of shares and only make a few hundred thousand to maybe a few million in bitcoin sales. This means that each share would get well under a dollar worth of bitcoin, which would work out to likely unspendable amounts plus the TX fees to get the bitcoin to the shareholders would eat up a lot of the money being distributed 

[bryant.coleman]

This can result in problems for both the dividend issuer (Dell, Overstock.etc) and the recipient (equity owners). For example, in most of the world nations, Bitcoin is considered as an asset, and not a form of currency. In that case, instead of the Dividend Distribution Tax, another tax (many be the gift tax) will be applicable and the resulting tax burden will be higher.

[dankkk]

This can result in problems for both the dividend issuer (Dell, Overstock.etc) and the recipient (equity owners). For example, in most of the world nations, Bitcoin is considered as an asset, and not a form of currency. In that case, instead of the Dividend Distribution Tax, another tax (many be the gift tax) will be applicable and the resulting tax burden will be higher.

Dividends are subject to income tax when paid in fiat. When a company issues shares of a company they own and gives them to existing shareholders (also known as a spinoff) then the cost basis of the original shares are adjusted downward and a customers cost basis of the new company would be a certain percentage of the original cost basis.

One thing that is similar to what the OP is suggesting would be to spinoff shares of the COIN ETF once it starts trading that would be exchanged with their bitcoin they received as revenue

[Kprawn]

Well Overstock would be one company, who would pioneer this. They been cutting edge from the start.

Dell, are just scooping the cream of the top. Just another opportunity to make some more money.

[counter]

While I appreciate the effort and understand you reason for concern.  I think this issue has been discussed and it is what it is.  We want companies to accept Bitcoin and now we have it.  The price will do what it does.  If companies want to hold Bitcoin they can and will.  I don't expect this  campaign to gain much traction but if the intentions are positive for Bitcoin I 'd support it.  I'm just unsure this is need or going to be possible without much of the communities support.

[Ardenyham]

And is it even allowed to receive dividents in Bitcoin? I guess it is somehow regulated what are possible ways to pay dividents, and anything else is not allowed ?

[hua_hui]

not applicable yet at the moment. Many companies still don't have enough sales from Bitcoin to cover the dividend payment. The most of share owners still don't know the term Bitcoin.

[wasserman99]

I don't think this would work very well. These companies simply do not make enough bitcoin in order for this to be feasible. Also many people hold shares in either mutual funds, or at a brokerage account. If they hold the shares at a broker then the companies would send the bitcoin to the broker who would then need to make the bitcoin available to the account owner. They would have the issue of who would pay for the 2nd tx fee.

[franky1]

i hope the OP realises that overstock already do hoard bitcoins. maybe the OP needs to actually  research what the companies he lists actually do with bitcoins before making a campaign to do what they may already do..

i can think of 10,000 other businesses that do not hoard coin, so i wonder why name some of the ones that do hoard?

[coins101]

i hope the OP realises that overstock already do hoard bitcoins. maybe the OP needs to actually  research what the companies he lists actually do with bitcoins before making a campaign to do what they may already do..

i can think of 10,000 other businesses that do not hoard coin, so i wonder why name some of the ones that do hoard?

"Overstock, Dell & Dish: Pay Dividends in Bitcoin"

Do Overstock pay dividends in Bitcoin?

Do any of the 10,000 publicly listed businesses you know of pay dividends in Bitcoin?

What service does Coinbase offer some of these big merchants, that they couldn't do themselves with a barcode?

[Lethn]

I would love to see this kind of thing at least happen as an option maybe, but I think you're right in that it would cause huge tax problems, I think companies are soon going to have to make a choice of whether to just abandon the USD/GBP/Euro or switch entirely to Bitcoin because the central banks will make it as difficult as possible to use both.

[zorke]

i hope the OP realises that overstock already do hoard bitcoins. maybe the OP needs to actually  research what the companies he lists actually do with bitcoins before making a campaign to do what they may already do..

i can think of 10,000 other businesses that do not hoard coin, so i wonder why name some of the ones that do hoard?

Overstock does not actually hoard bitcoin. They just do not sell all of it on exchanges as soon as they get it. They keep 10% of it, hoping to find a better use for it then simply selling it. This year they are going to use it to pay a portion of their employee's bonus/incentive. Next year, who knows.

[OrientA]

I hope them to pay salary with BTC.

[coins101]

http://www.wired.com/2014/10/overstock-com-assembles-coders-build-bitcoin-like-stock-market/

We helped make it happen. Overstock were sent messages and pointed to this thread. It wasn't the reason why he pulled the trigger, but it helped.

[bigasic]

overstocks idea sounds interesting, but how will it help bitcoin? will they use the blockchain or do a fork or create their own crypto currency? So, the idea is to create stocks with crypto? I dont see how that will pass muster with the SEC, etc... I hope it works out..

[beetcoin]

this isn't an easy task to do, and it definitely wouldn't be immediately popular. it's also something that hasn't been done before, so there are lots of things need to be done in preparation.

either way though, i don't think many shareholders would want to learn how to store their bitcoins.. which they would have to do is dell or overstock paid them in btc.

[coins101]

this isn't an easy task to do, and it definitely wouldn't be immediately popular. it's also something that hasn't been done before, so there are lots of things need to be done in preparation.

either way though, i don't think many shareholders would want to learn how to store their bitcoins.. which they would have to do is dell or overstock paid them in btc.

optional....

[51percemt]

this isn't an easy task to do, and it definitely wouldn't be immediately popular. it's also something that hasn't been done before, so there are lots of things need to be done in preparation.

either way though, i don't think many shareholders would want to learn how to store their bitcoins.. which they would have to do is dell or overstock paid them in btc.

It would also not be feasible - it would be very difficult, if not impossible to gather a bitcoin address for each shareholder, as some may not respond to communications requesting such information immediately. You also have the issue that many shares are held via multiple layers of agents, and you have the question of who would be responsible for the TX fees when passing along the bitcoin from agent to agent (there would be thousands, if not millions of outputs so the TX fees would be substantial)

[nelruk]

Your idea itself is very interesting but I think companies shouldn't offer pay dividends just with BTC; they can offer to pay with LTC or Peercoin, etc.; remember Coinsortium was (I think) so far the only company acting like a stock platform.