Online retailer Overstock.com announced it will pay shareholder dividends in a digital security listed on its affiliate company tZero’s trading platform.

The move, approved by the company’s board of directors, will see that one digital voting series A-1 preferred stock (series A-1) will represent 10 shares of common stock, or 10 shares of voting series B preferred stock, according to a statement released Tuesday.

Approximately 40,000 holders hold around 37 million shares of Overstock. Meaning that – at a 10:1 ratio of common stock to series A-1 shares – approximately 3.7 million digital shares will be disbursed. These include shares that are held as part of investor’s 401(k) or IRAs.

The record date for the digital asset dividend is set for September 23, 2019, following the firm’s third quarter, and will be “shipped” to an investor’s custodial wallet in mid-November.

The company discloses the digital shares have not been registered under the Securities Act of 1933, and can be traded only through a Dinosaur Financial Group brokerage account. Additionally, as previously reported, Electronic Transaction Clearing will act as a clearinghouse and custodian, and Computershare as transfer agent.

That being said, “investors can receive their dividend to the same broker with which they hold their common shares,” according to the investors website.

Overstock.com CEO Patrick M. Byrne said, “The bundle of legal rights represented by each of these new A-1 shares is similar to the bundle of legal rights embodied in shares of our common stock (OSTK) that trades on NASDAQ.”

The Series A-1 was initially unveiled in June, as the second tradable digital asset available to accredited investors on the PRO Securities alternative trading system (ATS), a platform backed by Overstock-subsidiary tZero. The security is listed as OSTKO on this SEC-registered the platform.

Bryne said he cannot predict whether these digital assets will trade “in rough approximation” with the firm’s traditional stock, and makes note of the possible arbitrage opportunities between the two types of shares.

That being said, Byrne sees this move a step towards a blockchain-based capital market, which stands opposed to the traditional “trading and settlement mechanisms about which [he has] long made [his] criticisms and doubts known.”

Byrne said:

“Five years ago, we set out to create a parallel universe: a legal, blockchain-based capital market. We’ve succeeded.”

Overstock CEO Patrick Byrne via CoinDesk archives