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General Category => Investment Ideas => Topic started by: Ballinvarosig Investors on November 01, 2011, 03:41:24 PM

Title: OSTK - Overstock.com
Post by: Ballinvarosig Investors on November 01, 2011, 03:41:24 PM
Overstock.com (O.co): Is Insolvency Looming?
Quote
Overstock.com (NASDAQ:OSTK), also known as O.co, faces possible insolvency if current earnings trends continue and it cannot restructure two loans with U.S. Bank, its biggest creditor by March 31, 2012 at the latest. In an apparent effort to mask its weakening net working capital position, it played a shell game to window dress its balance sheet at the end of the third quarter (September 30, 2011). Overstock.com owed U.S. Bank $20.329 million under the “Master Lease Agreement” (sale-leaseback) and another $17 million under a “Financing Agreement” (line of credit). Therefore, the company owes U.S. Bank $37.329 million under two loan agreements.

Last week Overstock.com surprised investors by reporting a third quarter $7.8 million net loss (diluted earnings per share of negative $0.33) compared to a net loss of $3.4 million (diluted earnings per share of negative $0.15) in the previous year’s third quarter. Its net loss was $0.10 per share higher than was projected by Wall Street analysts. So far, Overstock.com has lost $16 million in the first nine months of the year compared to only a $1.1 million dollar loss during the previous year's nine month period.

"Likely" breach of debt covenant buried in footnotes

As I described in my last blog post, the company buried news of an impending default in its Master Lease Agreement (sale leaseback) with U.S. Bank on page 43 of its footnotes in its third quarter 10-Q report. The Master Lease Agreement with U.S. Bank requires Overstock.com "…to maintain a minimum Total Fixed Charge Coverage annualized ratio of at least 1.20:1.00, based on operating results, measured at the end of each fiscal quarter." The company revealed that, "… based on the results for the first three quarters of 2011, it is likely that we will be out of compliance with the Total Fixed Charge Coverage ratio at December 31, 2011 unless current trends improve substantially. We have held initial and collegial discussions with U.S. Bank regarding this potential non-compliance."

The 10-Q report gives a peek into Overstock.com’s "current trends" and since it was filed 27 days into the 92 day fourth quarter. According to the company’s own analysis, the projected fourth quarter numbers don’t look good “unless current trends improve substantially” in the next few weeks.

Window dressing its balance sheet

At the end of its third quarter, the Overstock.com had $18.4 million of net working capital (current assets minus current liabilities). However, the company would have reported a mere $1.4 million of net working capital had it not played a shell game and window dressed its balance sheet during the third quarter. Apparently, the company wanted to avoid reporting dangerously low net working capital going into the fourth quarter, while at the same time it is trying to renegotiate terms of its Master Lease Agreement (sale leaseback) with U.S. Bank.

On September 21, 2011, Overstock.com borrowed $17 million under its Financing Agreement (line of credit) with U.S. Bank and used $7.5 million of internal cash to redeem $24.5 million of convertible debt before its December 1, 2011 due date (10-Q report page 16 and 33). It could have waited until the fourth quarter to redeem its convertible debt when it was due. Further, the convertible debt was unsecured debt, while the amount it borrowed from U.S. Bank is secured debt.

The convertible debt was classified on the company's balance sheet as a current liability at the end of its second quarter. The $17 million that it borrowed under its Financing Agreement (line of credit) is a long term debt (noncurrent liability) because payment is due on December 31, 2012 (10-Q report page 42). The company used secured long term debt (noncurrent liability) to replace an unsecured current liability in the quarter before its payment was due.

Had Overstock.com not borrowed that $17 million from U.S. Bank to redeem its convertible debentures before the end of the third quarter (September 30, 2011), it would have ended the quarter with a mere $1.4 million in working capital (current assets less current liabilities). In any case, its balance sheet window dressing is temporary, since the $17 million it borrowed will become a current liability by the end of the first quarter of 2012 (March 31, 2012) which is traditionally a weak quarter for the company.

Liquidity issues

At the end of the third quarter (September 30, 2011), Overstock.com owed U.S. Bank $20.329 million under its Master Lease Agreement (sale leaseback). As I detailed above, the company revealed that if current trends don’t "substantially improve" it "likely" won't be in compliance with certain minimum financial benchmarks required under the agreement. According to the Master Lease Agreement, an "Event of Default" includes the "...failure of Lessee to perform any term, covenant or condition of the Lease...." In such a case, if the company cannot restructure its Master Lease Agreement with U.S. Bank, the lender can require the company to immediately pay "…the entire amount of rent and other sums…."

$14.485 million of the $20.329 million Overstock.com owed U.S. Bank under its Master Lease Agreement (sale leaseback) was classified as long term debt (noncurrent liability) as of the end of the third quarter (September 30, 2011). As I detailed above, Overstock.com had only $18.4 million of net working capital at the end of the third quarter. By window dressing its balance sheet, the company made it appear that it had adequate net working capital to pay all amounts due under that agreement in the event of a potential default. Even if we set aside the window dressing issue, the company barely had enough net working capital to pay all amounts due under the Master Lease Agreement in the event of a potential default.

The company is required to have $30 million in compensating balances deposited at U.S. Bank against its Master Lease Agreement (sale leaseback) and Financing Agreement (line of credit). Excluding those $30 million compensating cash balances, the company had only $95.8 million of current assets available to cover $101.6 million of current liabilities as of the end of its third quarter. (Note: The $101.6 million current liabilities amount excludes $5.8 million of current liabilities under the Master Lease Agreement).

In other words, Overstock.com could have a difficult time paying debts as they come due if continues to maintain $30 million in compensating cash balances at U.S. Bank. Further, the $17 million it borrowed under the Financing Agreement becomes classified at a current liability in the first quarter of 2012 which will reduce net working capital by the same amount.

Overstock.com may have to reduce its $30 million of compensating balances on deposit with U.S. Bank. However, if the company does not maintain its compensating balances with U.S. Bank it would default on both loan agreements totaling $37.3 million. Therefore, Overstock.com also may have to renegotiate its Financing Agreement (line of credit) with U.S. Bank.

Other issues

Overstock.com also has to contend with an ongoing investigation by the Securities and Exchange Commission into securities law violations after this blog exposed it fabricating its earnings. So far, every single financial report issued from its inception to Q3 2009 had to be restated up to three times due to violations of Generally Accepted Accounting Principles.

The company is being sued by District Attorneys from seven California District Attorneys who are alleging consumer fraud. They are seeking at least $15 million of restitution, fines, penalties, and cost reimbursements from the company for allegedly defrauding consumers. The Judge in that case had to compel an uncooperative Overstock.com to turn over information to the California District Attorneys.

Earlier in the year, Google penalized Overstock.com for improperly gaming its search algorithm to boost its search rankings.

Two weeks ago, Overstock.com CEO Patrick Byrne, Deep Capture LLC, and Mark Mitchell, a writer for Deep Capture, were sued in a Canadian court for defamation. Deep Capture LLC is an affiliate of Overstock.com and its website was used to promote Byrne's delusional conspiracy theories and libel company critics. The judge ordered the Deep Capture website shut down.

Written by,

Sam E. Antar

Read more: http://www.businessinsider.com/overstockcom-oco-is-insolvency-looming-2011-10#ixzz1cUpMHsPN
Title: Re: OSTK - Overstock.com
Post by: beerbaron on November 01, 2011, 07:43:09 PM
Why would anybody read Sam Altar's comments?

BeerBaron
Title: Re: OSTK - Overstock.com
Post by: Tim Eriksen on November 01, 2011, 08:11:20 PM
Why would anybody read Sam Altar's comments?

BeerBaron

I felt the same way about Deep Capture.  That is what makes this interesting.  Its kind of like watching two people you don't like fight. 
Title: Re: OSTK - Overstock.com
Post by: Parsad on November 02, 2011, 12:55:41 AM
Probably not a good idea to short a company (that in the worst case scenario would need $35M), where the CEO is worth $50M, his father is worth over a billion, and the largest shareholders manage over $22B in investment capital...Prem and Francis! 

Do you really think that if Byrne called up Prem or Francis and offered them convertible notes, or even better preferred shares with a decent yield, that they wouldn't jump on it?  Not to mention that a principal of Hamblin-Watsa, Sam Mitchell, sits on the board of Overstock. 

Hopefully, Sam Antar and his cronies decide to short the hell out of this, because I would be thoroughly entertained to watch them lose all of their money!  Cheers!
Title: Re: OSTK - Overstock.com
Post by: Ballinvarosig Investors on November 02, 2011, 01:30:02 AM
I'm not actually short by the way! I just posted this because the stock hit a new 52 week low and I was looking to stimulate some discussion!
Title: Re: OSTK - Overstock.com
Post by: ValueCarl on November 02, 2011, 04:32:20 AM
As the result of personal experience with a security on the receiving end of Watsa, Chou's lending practices, I think I will short OVERSTOCK myself should they become the loaners of last resort!  ;)
Title: Re: OSTK - Overstock.com
Post by: stahleyp on November 02, 2011, 07:29:06 AM
Sanj,

You follow the company way more than I do. What do you think about his allegations?
Title: Re: OSTK - Overstock.com
Post by: Parsad on November 02, 2011, 11:58:34 AM
Those debt covenants will be breached on a 4 quarter rolling basis.  But they will probably be back within that range after the 4th quarter of 2011, once those receivables come in during the 1st quarter 2012.  Antar will take anything he can and try to blow it up into a huge mess.  Overstock has enough cash to just pay the debt off entirely after the 4th quarter when they get their biggest inflows of operating cash flow. 

Overstock needs to do better...no doubt about that...but to blow it up into what Antar's saying is silly.  They are currently in negotiations with U.S. bank regarding the covenants, and I suspect that some adjustment will occur where U.S. bank will give them some leeway, with them returning to within the credit covenants in the next six months. 

The whole Google penalty and then Overstock's decision to switch to the O.co brand is what really hurt them this year.  They lost about 5% of their revenue in the 1st quarter because of the penalty, and their visibility naturally went down in the 2nd because of that as well.  The stupid idea of ramping up the O.co brand was poorly executed, and Byrne stated that himself in the latest conference call.  Customers were confused and probably put off by the push.  Overstock's own brand is pretty darn good, and there was no reason to switch.  They could have just used the O.co url as an alternative.  Cheers!   
Title: Re: OSTK - Overstock.com
Post by: DCG on November 02, 2011, 12:05:19 PM
The stupid idea of ramping up the O.co brand was poorly executed, and Byrne stated that himself in the latest conference call.  Customers were confused and probably put off by the push.  Overstock's own brand is pretty darn good, and there was no reason to switch.  They could have just used the O.co url as an alternative. 

I'd have a hard time trusting management that actually thought the whole O.co thing was a good idea.
Title: Re: OSTK - Overstock.com
Post by: stahleyp on November 02, 2011, 01:22:17 PM
Thanks man. I appreciate your insight.  :)
Title: Re: OSTK - Overstock.com
Post by: valuecfa on November 20, 2011, 09:19:43 AM
Looks like Francis still has faith in Overstock: http://sec.gov/cgi-bin/browse-edgar?action=getcompany&CIK=0001130713&type=&dateb=&owner=include&count=40

The O.co fiasco has been a rebranding nightmare for the company here in the U.S. I find the shortcut O.co useful, but i guess it confused many shoppers. Still holding my underwater shares.

I wonder why they never put any marketing dollars behind O.biz. The site seems to have the most potential of all the experiments that overstock has toyed around with.

And a few pet peeves:

It would seem logical for the overstock.biz domain to direct to O.biz and not overstock.com. They should also (in my opinion) add the O.biz tab to their overstock.com website. I would think that would be a very cheap way to get additional awareness of the business site. The "Cars" and "insurance" tabs have got to go, in my opinion.
Title: Re: OSTK - Overstock.com
Post by: fuluvu on January 12, 2012, 05:43:02 AM
I'd like to add my first hand experience with Overstock.com. I ordered from Overstock.com before, thus, it sends me ad emails almost everyday. I do not want to receive these emails and I click on unsubscribe. But, it continues to send  me emails almost everyday. I have to set up gmail filters to automatically delete emails from overstock.com. Obviously, I was annoyed by the practice.

Retailing is hard enough, online retailing is harder. Online shoppers can compare prices so easily, just by make several clicks. Although I admire Prem and Chou, I personally will not invest in Overstock.

Disclaimer: I have no position in overstock (long or short).
Title: Re: OSTK - Overstock.com
Post by: ValueCarl on February 21, 2012, 04:14:25 PM
http://seekingalpha.com/article/380251-how-overstock-com-violated-s-e-c-rules-on-timely-disclosures-and-delayed-reporting-a-default-on-bank-loan
Title: Re: OSTK - Overstock.com
Post by: tombgrt on February 22, 2012, 07:42:13 AM
http://seekingalpha.com/article/380251-how-overstock-com-violated-s-e-c-rules-on-timely-disclosures-and-delayed-reporting-a-default-on-bank-loan

http://seekingalpha.com/article/380251-how-overstock-com-violated-s-e-c-rules-on-timely-disclosures-and-delayed-reporting-a-default-on-bank-loan

 :-\

+1 ban for ValueCarl & Ben Graham.
Title: Re: OSTK - Overstock.com
Post by: ValueCarl on February 22, 2012, 07:49:35 AM
Sam the Spam and his friends are getting really scared about something..........


http://seekingalpha.com/article/382951-overstock-com-was-ineligible-to-file-a-registration-statement-last-december
Title: Re: OSTK - Overstock.com
Post by: ValueCarl on February 22, 2012, 10:36:09 AM
My apologies to the board for posting a double link surrounding Sam The Spam Artist's SCAM tied to his yesterday diatribes in addition to today's newest release where he accelerates the attack. I just thought the comment section was moving along interestingly for those who read "comment" sections in conjunction with the author's article. In my opinion, of course, because I am not a CONVICTED FELON!  >:( 
Title: Re: OSTK - Overstock.com
Post by: Parsad on February 22, 2012, 12:44:59 PM
Sam the Spam and his friends are getting really scared about something..........


http://seekingalpha.com/article/382951-overstock-com-was-ineligible-to-file-a-registration-statement-last-december

Overstock's web traffic rebounded significantly in the 4th quarter, after the Google penalty in the 1st quarter hurt them and the O.co branding confused their customers in the 2nd Q.  In fact, see the enclosed chart on Overstock's traffic over the last two years, and you'll see that in the 4th Q 2012, the peak in the shopping season began earlier and lasted longer.  As long as they didn't undercut their pricing, chances are they did as well, if not better than 4th Q 2011.  I suspect Sam and his associates are hoping to squeeze some money out of their shorts before the results come out.  Cheers!
Title: Re: OSTK - Overstock.com
Post by: ValueCarl on February 22, 2012, 05:52:19 PM
Great data points, Sanjeev. I found this interesting, and am wondering what Dr. Byrne along with his team are doing to correct it? I have a recommendation, but I wouldn't dare mention it on this thread, for fear of the negative ramifications which might ensue afterwards possibly even making me disappear by turning into cyber dust like my good friend, Ben Graham recently!  :'(     

Average Load Time for
Overstock.com
Slow (1.955 Seconds), 68% of sites are faster.
Title: Re: OSTK - Overstock.com
Post by: Liberty on February 22, 2012, 06:15:22 PM
Average Load Time for
Overstock.com
Slow (1.955 Seconds), 68% of sites are faster.

What is Amazon.com's average load time using the tool that you are using?
Title: Re: OSTK - Overstock.com
Post by: alertmeipp on February 23, 2012, 05:03:06 PM
if amazon were to offer the same over stock feature as Overstock.. What's the moat for OSTK to compete?
Title: Re: OSTK - Overstock.com
Post by: ValueCarl on February 27, 2012, 06:53:26 AM
Patrick's CREW just gave, "Sam, I Am" a CONVICTED FELANNE, a FAT PITCH to run with, especially if he wants to write a new two page 3,000 character diatribe on the psychology of public corporations reporting on Fridays in front of weekends so their stocks find a RESPITE from the selling on "bad news" earnings reports!

Can Sam the Spam, I Am such a Scam, as well as CONVICTED FELANNE adhere to such a PLAN? Go ahead Sam, have a field day with it! 

http://www.4-traders.com/OVERSTOCK-COM-INC-10372/news/OVERSTOCK-COM-INC-Overstock-com-Scheduled-to-Release-Its-FY-and-Q4-2011-Financial-Results-on-March-2-14044123/
Title: Re: OSTK - Overstock.com
Post by: Parsad on February 27, 2012, 04:59:22 PM
Patrick's CREW just gave, "Sam, I Am" a CONVICTED FELANNE, a FAT PITCH to run with, especially if he wants to write a new two page 3,000 character diatribe on the psychology of public corporations reporting on Fridays in front of weekends so their stocks find a RESPITE from the selling on "bad news" earnings reports!

Can Sam the Spam, I Am such a Scam, as well as CONVICTED FELANNE adhere to such a PLAN? Go ahead Sam, have a field day with it! 

http://www.4-traders.com/OVERSTOCK-COM-INC-10372/news/OVERSTOCK-COM-INC-Overstock-com-Scheduled-to-Release-Its-FY-and-Q4-2011-Financial-Results-on-March-2-14044123/

Hi Carl,

They are reporting before the markets open on Friday, so there is nothing to write about.  I think the critics are mainly bothered by companies that report on Fridays AFTER market close...not before.  Cheers!
Title: Re: OSTK - Overstock.com
Post by: ValueCarl on February 28, 2012, 08:04:39 AM
Overstock.com Chairman and CEO Patrick M. Byrne said, "We've made O.info the place to find helpful information about our products. The site features unique customer reviews with insights into the appearance, function and fit of a product.  Each product has an overall rating as well as individual user ratings to help make the shopping experience easier for consumers, particularly when deciding among similar products. So whether you're just beginning your research for a purchase or you're ready to buy, the information you need is just a click away with O.info."

Along with consumer goods, O.info contains in-depth information on cars, travel, insurance and business products.

The O.info domain was acquired in September 2011 from Afilias Limited, the official .info domain registry.

Roland LaPlante, CMO of Afilias, said, "Overstock.com has a focused branding strategy for its Web properties including the use of single-character 'O' domains like O.info. The .info domain has been available for more than a decade and has more than eight million users. In fact, .info is the most popular new generic top-level domain (gTLD) assigned by the Internet Corporation for Assigned Named and Numbers (ICANN)."

Read more here: http://www.sacbee.com/2012/02/28/4296838/overstockcom-launches-oinfo-consumer.html#storylink=cpy
Title: Re: OSTK - Overstock.com
Post by: ValueCarl on March 01, 2012, 09:08:54 AM
Provide a little ground cover for the Cabal's LAP DOGS! This a Dr. Byrne thread; therefore, it is right to utilize BYRNE LANGUAGE in advance of BURNING these BASTARDS!  >:(

Such a silly game, as there is NOT one morsel of good data relating to numbers or "VALUE" in this piece of trash. Throw it in the garbage pail, and light a flame to it and them, while you're at it!   

http://www.forbes.com/sites/greatspeculations/2012/02/29/big-lots-flexing-into-earnings-overstock-may-backfire-for-bulls/

For its part, the extreme oversold conditions in Overstock.com may tempt some into looking at the stock as a potential special situations trade.  Seen this way, Friday’s earnings announcement could be a catalyst that forces short sellers to cover and sends the stock soaring for a brief period as traders rush to buy back shares.

That said, high probability traders and more active investors would do well to avoid filling their shopping carts with stocks like Overstock.com. While a ‘special situations’ trade every now and then can be a great way to take advantage of oversold (and overbought extremes), waiting for a pullback in bull market territory – such as the one that could follow any disappointment in Big Lots’ Friday report – likely is the smarter play to trade in and trade out of this active stock.
Title: Re: OSTK - Overstock.com
Post by: ValueCarl on March 02, 2012, 05:23:51 AM
http://finance.yahoo.com/news/overstock-com-reports-fy-q4-130000409.html


Key FY 2011 metrics (comparison to FY 2010):
Revenue:  $1,054M vs. $1,090M (3% decrease);
Gross margin: 17.0% vs. 17.4% (40 basis point decrease);
Gross profit:  $179.1M vs. $189.6M (6% decrease);
Sales and marketing expense: $61.8M vs. $61.3M (1% increase);
Contribution (non-GAAP measure): $117.3M vs. $128.3M (9% decrease);
G&A/Technology expense: $134.8M vs. $113.9M (18% increase);
Net income (loss): $(19.4)M vs. $13.9M ($33.3M decrease); and
Diluted EPS: $(0.84)/share vs. $0.59/share ($1.43 decrease).

Key Q4 2011 metrics (comparison to Q4 2010):
Revenue:  $314.1M vs. $348.9M (10% decrease);
Gross margin: 16.2% vs. 17.0% (80 basis point decrease);
Gross profit:  $50.9M vs. $59.4M (14% decrease);
Sales and marketing expense: $18.9M vs. $17.3M (10% increase);
Contribution (non-GAAP measure): $32.0M vs. $42.2M (24% decrease);
G&A/Technology expense: $34.1M vs. $27.4M (24% increase);
Net income (loss): $(3.4)M vs. $14.9M ($18.3M decrease); and
Diluted EPS: $(0.15)/share vs. $0.63/share ($0.78 decrease).


http://www.sec.gov/Archives/edgar/data/1130713/000104746912002034/a2207595z10-k.htm
Title: Re: OSTK - Overstock.com
Post by: ValueCarl on March 02, 2012, 05:27:34 AM
Free cash flow (a non-GAAP financial measure) — Free cash flow for 2011 and 2010 totaled $16.9 million and $(4.2) million, respectively.  The $21.1 million year over year increase was primarily due to $11.8 million decrease in capital expenditures in 2011 over 2010, and a $9.3 million increase in operating cash flows.
Free cash flow reflects an additional way of viewing our cash flows and liquidity that, when viewed with our GAAP results, provides a more complete understanding of factors and trends affecting our cash flows and liquidity. Free cash flow, which we reconcile to "net cash provided by (used in) operating activities," is cash flow from operations reduced by "expenditures for fixed assets, including internal-use software and website development." We believe that cash flows from operating activities is an important measure, since it includes both the cash impact of the continuing operations of the business and changes in the balance sheet that impact cash. However, we believe free cash flow is a useful measure to evaluate our business since purchases of fixed assets are a necessary component of ongoing operations and free cash flow measures the amount of cash we have available for future investment, debt retirement or other changes to our capital structure after we have paid all of our expenses. Therefore, we believe it is important to view free cash flow as a complement to our entire consolidated statements of cash flows.
Our calculation of free cash flow is set forth below (in thousands):


Year ended December 31,












2011

2010

2009
Net cash provided by operating activities

$
25,663

$
16,322

$
46,117
Expenditures for fixed assets, including internal-use software and website development


(8,741)


(20,511)


(7,275)
Free cash flow

$
16,922

$
(4,189)

$
38,842


Cash and working capital — At December 31, 2011, we had cash and cash equivalents of $97.0 million.  Working capital was $(14.1) million and $14.7 million at December 31, 2011 and December 31, 2010, respectively.  The net change in cash from December 31, 2010 to December 31, 2011 was a decrease of $27.0 million. This was due to $43.8 million of cash outflows from financing activities and $8.9 million from investing activities, offset by $25.7 million of positive cash flows from operating activities.
Title: Re: OSTK - Overstock.com
Post by: ValueCarl on March 02, 2012, 06:16:02 AM
On September 15, 2009, we received a notice from the Securities and Exchange Commission ("SEC") stating that the SEC is conducting an investigation concerning our previously-announced financial restatements of 2006 and 2008 and other matters. The subpoena accompanying the notice covers documents related to the restatements and also to our billings to our partners in the fourth quarter of 2008 and related collections, and our accounting for and implementation of software relating to our accounting for customer refunds and credits, including offsets to partners, and related matters. Prior to October 2010, the SEC asked us for information in the form of records connected to this matter, all of which we have provided. The SEC has interviewed several witnesses. However, we do not know the present status of the investigation. Since October 2010, we have not been asked for more information, and we know of no person interviewed in this matter since October 2010. We have cooperated and intend to continue to cooperate fully with the investigation.

        We establish liabilities when a particular contingency is probable and estimable. We believe the $2.4 million accrued at December 31, 2011 in our consolidated financial statements is adequate in light of the probable and estimable liabilities. It is reasonably possible that the potential losses may exceed our accrued liabilities for contingencies.

        We have other contingencies which are reasonably possible; however, the reasonably possible exposure to losses cannot currently be estimated.

        We recognized a reduction in legal expenses of zero, $4.5 million and $7.1 million during the years ended December 31, 2011, 2010 and 2009 respectively, related to the settlement of legal matters.


Title: Re: OSTK - Overstock.com
Post by: ValueCarl on March 02, 2012, 06:21:14 AM
Ten times FCF equating to a $160M market cap online retail company with a very respectable brand notwithstanding Sam, I Am, A CONVICTED FELANNE along with SCAM, and over $1B in annual sales, is DIRT CHEAP.

I would be a buyer again this morning.  ;)
Title: Re: OSTK - Overstock.com
Post by: Josh4580 on March 02, 2012, 07:33:42 AM
Parsad, any comments on this quarters results?
Title: Re: OSTK - Overstock.com
Post by: Ballinvarosig Investors on March 02, 2012, 07:49:07 AM
Those are truly dreadful numbers. While the retail sector in general has shown modest improvement over the Christmas period, Overstock have increased SG&A only to record a decline in revenue YoY. When you bear in mind that Amazon took a pasting because their revenue increased over the same period by only 35%, you realize how bad the situation is at Overstock. You can no longer blame the Google search engine penalty that hit sales in Q1 and Q2, or the re-branding efforts from last year - to me, it looks like there is something fundamentally wrong with the business.
Title: Re: OSTK - Overstock.com
Post by: ValueCarl on March 02, 2012, 07:49:36 AM
3.75% Convertible Senior Notes

        In November 2004, we completed an offering of $120.0 million of 3.75% Convertible Senior Notes due 2011 (the "Senior Notes"). Proceeds to us were $116.2 million, net of $3.8 million of initial purchaser's discount and debt issuance costs. The discount and debt issuance costs were being amortized using the straight-line method which approximated the effective interest method. We recorded amortization of discount and debt issuance costs related to this offering totaling $77,000, $228,000 and $331,000 during the years ended December 31, 2011, 2010 and 2009, respectively. Interest on the Senior Notes was payable semi-annually on June 1 and December 1 of each year. The Senior Notes were scheduled to mature on December 1, 2011 and were unsecured and ranked equally in right of payment with all existing and future unsecured, unsubordinated debt and senior in right of payment to any existing and future subordinated indebtedness.

        We retired all of the remaining $34.6 million of the Senior Notes during the year ended December 31, 2011, for $34.6 million in cash, resulting in a loss of $54,000 on early extinguishment of debt, net of $77,000 of associated unamortized discount. Of the $34.6 million in Senior Notes retired during the year ended December 31, 2011, $10.1 million were held by Chou Associates Management, Inc. or an affiliate of Chou ("Chou") and $21.7 million were held by Fairfax Financial Holdings Limited or an affiliate of Fairfax ("Fairfax"). Chou and Fairfax are beneficial owners of more than 5% of our common stock. We retired $25.4 million of the Senior Notes during the year ended December 31, 2010 for $24.9 million in cash, resulting in a gain of $346,000 on early extinguishment of debt, net of $158,000 of associated unamortized discount.
Title: Re: OSTK - Overstock.com
Post by: ValueCarl on March 02, 2012, 07:55:53 AM
Sanjeev is tuned into the conference call, aren't all of you?  ;)
Title: Re: OSTK - Overstock.com
Post by: Parsad on March 02, 2012, 08:02:37 AM
Parsad, any comments on this quarters results?

Very disappointing!  I've got a bunch of questions in to the webcast, so let's see how many they answer.  Frankly, I don't know how you lose money when you have $1B in revenues.  You should be able to squeeze out a 1% net profit margin.  It's not like they are Sears and have all this capex and built in cost.  Zappos hit $1B at the same time and sold for $900M...this thing is at $140M! 

Either they need new blood in there or people aren't doing their job!  And why they hell would they pay bonuses in 2011 with a year like this?  I'd like to see Fairfax and Francis throw their weight around a little more on this thing too.  I know Sam is on the board, but this thing needs someone to turn it around like Netjets.  Just no reason why it should lose money and be valued where it is!  Cheers!
Title: Re: OSTK - Overstock.com
Post by: ValueCarl on March 02, 2012, 08:07:39 AM
I remember begging Patrick for "international sales" by the power of the internet. Chou and Watsa can help plenty here by opening doors to The Far East! Sales across the entire paradigm will rise again or the INTERNET is a BIG FAKE, and it's NOT!  ;)     


International business

        We began selling products through our Website to customers outside the United States in late August 2008. As of December 31, 2011, we were offering products to customers in over 105 countries and non-U.S. territories. We do not have sales operations outside the United States, and are using a U.S. based third party to provide logistics and fulfillment for all international orders. Revenue generated from our international business is included in either direct or fulfillment partner revenue, depending on whether the product is shipped from our warehouses or from a fulfillment partner. Less than 1% of our sales are made to international customers.

        Total revenues from International sales were $8.8 million $9.4 million and $5.1 million for the years ended December 31, 2011, 2010 and 2009 respectively.
Title: Re: OSTK - Overstock.com
Post by: Ballinvarosig Investors on March 02, 2012, 08:31:15 AM
Sanjeev is tuned into the conference call, aren't all of you?  ;)
I am, popcorn at the ready, should be entertaining at least!
Title: Re: OSTK - Overstock.com
Post by: link01 on March 02, 2012, 08:38:44 AM
Quote
I remember begging Patrick for "international sales" by the power of the internet. Chou and Watsa can help plenty here by opening doors to The Far East! Sales across the entire paradigm will rise again or the INTERNET is a BIG FAKE, and it's NOT!

carl, they need to find a way to squeeze a little coin from their domestic biz 1st before they jump into building out international materially. it pains me to say it but right now overstock looks broken.
Title: Re: OSTK - Overstock.com
Post by: ValueCarl on March 02, 2012, 08:59:26 AM
I am hearing a key senior leader with brand recognition in retail tied to Marketing is imminent. Stormy, "the best," is moving along fine with her customer care skills up the SUPPLY CHAIN to their partners and suppliers. Sales baby, sales!   
Title: Re: OSTK - Overstock.com
Post by: ValueCarl on March 02, 2012, 09:01:41 AM
Kill that "SERIAL KILLER" at Goldman SUCKS, PATRICK!  ;)
Title: Re: OSTK - Overstock.com
Post by: Hester on March 02, 2012, 09:02:02 AM
"There's a serial killer on the lose, and it's Goldman Sachs"

-Pat Byrne on the CC
Title: Re: OSTK - Overstock.com
Post by: Parsad on March 02, 2012, 09:03:26 AM
Actually, the call is pretty damn good!  They are addressing some of the issues that we had, as well as some other large shareholders:

- cut expenses
- hire a reputable executive from a reputable company to take this thing to another level
- legal expenses should come down this year considerably
- stop the crazy marketing ideas like O.co...Patrick's idea

And then unfortunately right now, Patrick said "I feel there was a serial killer on the loose...Goldman Sachs."  They've got to move Patrick to the Chairman position, and just let the rest of the executives run this thing.  Geez!  Cheers!   
Title: Re: OSTK - Overstock.com
Post by: Hester on March 02, 2012, 09:08:19 AM
They've spent the last 10 minutes talking about their ridiculous legal forays and Pat's TV appearances. Just saying.
Title: Re: OSTK - Overstock.com
Post by: Parsad on March 02, 2012, 09:11:52 AM
They answered three of my questions earlier that coincided with another shareholder's questions (bonuses, Worldstock, expenses), and then no comment on the question on why two enormously different valuations between Zappos and Overstock.com.  Cheers!
Title: Re: OSTK - Overstock.com
Post by: ValueCarl on March 02, 2012, 09:13:13 AM
Hmm, issuing tasty STRAIGHT debt at 8 percent--God willing and the CRICK don't rise--in order to buy back DIRT CHEAP STOCK! $50-100M back of the envelope Byrne SWAG!
Title: Re: OSTK - Overstock.com
Post by: ValueCarl on March 02, 2012, 09:15:35 AM
I think Watsa and Chou can help there, don't you Sanjeev!  ;) This doesn't sound like a BEND over and hold on for DEAR LIFE like Level 3, does it! LOL!
Title: Re: OSTK - Overstock.com
Post by: ValueCarl on March 02, 2012, 09:19:28 AM
Jonathon is taking SAM, I AM, a CONVICTED FELANNE, out to his LEGAL woodshed!  ;) No filings, amended or otherwise necessary, NOT MATERIAL! 
Title: Re: OSTK - Overstock.com
Post by: ValueCarl on March 02, 2012, 09:33:10 AM
I am going to wait for Sam the Spam to throw out some new Scam making Overstock appear as a Sham and load up my truck again........  ;)

BYRNE em BABY!!!!!!!!!! ;)
Title: Re: OSTK - Overstock.com
Post by: Ballinvarosig Investors on March 02, 2012, 09:38:49 AM
Honestly, I can't say I was impressed. There was no real explanation as it why sales just fell off a cliff for their busiest period in Q4. Apparently the decline has abated, but who is to say we won't see it again? As for Patrick's confidence in the team, again, this is puzzling given the performance of Q4. While they are making the right noises about cutting expenses, that's all for nothing if sales growth is sluggish.

The comments about Goldman Sachs were quite frankly embarrassing and it's ridiculous that they continue to go on about how they nearly went under. Investors don't care about former glories, it's akin to Kodak talking about all that money they used to make in the 90's! If I was an investors, I would be much more concerned at why little (filings not being made in time) and large (o.co re-branding) keep happening. You can forgive a one-off issue, but there are no one-off's when it comes to Overstock.
Title: Re: OSTK - Overstock.com
Post by: Hester on March 02, 2012, 09:49:50 AM
I am going to wait for Sam the Spam to throw out some new Scam making Overstock appear as a Sham and load up my truck again........  ;)

BYRNE em BABY!!!!!!!!!! ;)

There's a haiku in there somewhere
Title: Re: OSTK - Overstock.com
Post by: ValueCarl on March 02, 2012, 09:50:04 AM
The comments about Goldman may be exactly the answer Sanjeev is looking for tied to valuations! He with the PEN POWER to issue reports and influence market participants; PRICES SECURITIES! 

I am looking forward to the right financier in order to loan straight debt to Overstock at "fair rates" so  Patrick, etal, can buy back their DIRT CHEAP stock that the GOLDMAN BLOOD SUCKING SQUID holds at BAY including but not limited to all of its extensions in the market, i.e. ASSOCIATES!   


<Interest expense — Interest expense was $2.5 million and $3.0 million in 2011 and 2010, and $517,000 and $732,000 during the fourth quarter of those same periods. Interest expense is related to interest incurred on our Senior Notes, finance obligations, line of credit, and capital leases. The decrease in interest expense in 2011 is primarily a result of extinguishments of our Senior Notes, partially offset by an increase from our finance obligations and line of credit.>

Read more here: http://www.bradenton.com/2012/03/02/3913215/overstockcom-reports-fy-and-q4.html#storylink=cpy
Title: Re: OSTK - Overstock.com
Post by: Eric50 on March 02, 2012, 10:18:41 AM
Sanjeev -

I don't think you can compare Zappos with Overstock. Zappos has/had a far superior business model and a much more competent management.

Its business model is based on very liberal free return policies: you can order 10 pairs of shoes and return them for free no questions asked. Margins are also much higher as they don't really compete on price. Bezos understood that years ago and tried to replicate it through endless.com as he could not implement those free return policies through the regular amazon website (you can't have different return policies across the site, you can't have the same liberal return policies for books). Then he got lucky a couple of years ago when the VCs backing zappos wanted/needed to get out quickly. That allowed him to get a key competitor at a decent price (I think he overpaid but it's arguable that it will pay off over time).

Tony Hsieh is a far better CEO than Patrick Byrne. He has a clear strategy and is focused on execution. We can't really say that of Byrne....

Having said that, I agree that ostk is dirt cheap. All we need (I own a few shares) is someone at the top with at least some kind of discipline...

Eric
Title: Re: OSTK - Overstock.com
Post by: ValueCarl on March 02, 2012, 11:55:14 AM
I know I give Sam, I am a convicted felon, a lot of heat on this board, but we must never forget as investors and speculators alike, that this speculative game of chicken, many times with other peoples money(OPM), is a double edged sword.

Let us not forget that Watsa and Chou get woodies when stocks that they are taking control stakes in, fall and keep falling hard! You wouldn't need to look much further than Buffett's sage advice in his letter this weekend, and the reason I sold his stock tied to his IBM example for "instruction." These men would ALL like to BUY the WHOLE WORLD for NOTHING, before they let it Rise on the BACKS of OTHERS AGAIN!  >:( 

I haven't researched where they got those lowly interest 3.5 percent converts in "price" before they were paid par out the door, nor the associated strike prices attached to them which didn't happen in the form of issuing common stock, but I suspect it was probably 50 cents on the dollar.   

My point is the following: Many times the ENEMY RESIDES WITHIN!

I'm still waiting for Sam to KNOCK us for a LOOP, however.  ;D

P.S. I won't buy Warren's stock for any more than he would while expecting a correction with Big Prem's defense vehicle--hedges--possibly working out better now!
Title: Re: OSTK - Overstock.com
Post by: PlanMaestro on March 02, 2012, 12:07:04 PM
All we need (I own a few shares) is someone at the top with at least some kind of discipline...

And that is a key condition for the perfect turnaround investment so first, change management specially if is there is a one man rule problem. Watching from the distance.

http://variantperceptions.wordpress.com/2009/11/08/turnaround-cases-premier-exhibitions-part-3-prxi/

Title: Re: OSTK - Overstock.com
Post by: hellsten on March 02, 2012, 12:12:19 PM
Link to financial results slides:
http://phx.corporate-ir.net/External.File?item=UGFyZW50SUQ9MTI4ODgwfENoaWxkSUQ9LTF8VHlwZT0z&t=1

* Slide 25: Outside Legal Expense: $16,069,000
* Slide 12: $8.5M reduction in corporate staff in January 2012.

I guess this means they will save around $24M in 2012 compared to 2011?

Doesn't look like they got any value from the legal expenses:
* Slide 12: Prime broker lawsuit dismissed in California court.

Wonder how much they have wasted on o.co and o.info, which seem to add as much value as the legal expenses.
Title: Re: OSTK - Overstock.com
Post by: Parsad on March 02, 2012, 12:48:35 PM
Link to financial results slides:
http://phx.corporate-ir.net/External.File?item=UGFyZW50SUQ9MTI4ODgwfENoaWxkSUQ9LTF8VHlwZT0z&t=1

* Slide 25: Outside Legal Expense: $16,069,000
* Slide 12: $8.5M reduction in corporate staff in January 2012.

I guess this means they will save around $24M in 2012 compared to 2011?

Doesn't look like they got any value from the legal expenses:
* Slide 12: Prime broker lawsuit dismissed in California court.

Wonder how much they have wasted on o.co and o.info, which seem to add as much value as the legal expenses.

Yeah, those reductions will all have an effect from 1st Q 2012 on.  I'm all for nailing these guys, but $16M in legal expenses for a $150M market cap company is an ill-advised gamble.  The best thing for Overstock.com may actually be the dismissal of the case.  Even if Fairfax's legal bill is four times that, that's a huge difference for a company with over $8B in equity!  Prem can afford to fight this fight, whereas Overstock.com unfortunately can't.

Sanjeev -

I don't think you can compare Zappos with Overstock. Zappos has/had a far superior business model and a much more competent management.

Its business model is based on very liberal free return policies: you can order 10 pairs of shoes and return them for free no questions asked. Margins are also much higher as they don't really compete on price. Bezos understood that years ago and tried to replicate it through endless.com as he could not implement those free return policies through the regular amazon website (you can't have different return policies across the site, you can't have the same liberal return policies for books). Then he got lucky a couple of years ago when the VCs backing zappos wanted/needed to get out quickly. That allowed him to get a key competitor at a decent price (I think he overpaid but it's arguable that it will pay off over time).

Tony Hsieh is a far better CEO than Patrick Byrne. He has a clear strategy and is focused on execution. We can't really say that of Byrne....

Having said that, I agree that ostk is dirt cheap. All we need (I own a few shares) is someone at the top with at least some kind of discipline...

Eric

I think those two businesses are completely comparable.  They be two of the most comparable online businesses you can find, even though their origins were a bit different. 

- Overstock.com ranks 550th as the most visited site globally, whereas Zappos.com ranks 601st. 
- Both hit about $1B in revenues at the same time. 
- Both launched around the same time back in 1999. 
- Both deal with online retail. 
- Both have excellent customer service.

If you give them a run rate of about $4M in annual legal costs (so a savings of $12M from their 2011 number), and lop off the $8.5M in reductions they are making on the employee side in 2012, you have a buisness that would have about $20M more in pre-tax earnings.  They have something like $160M in tax losses they can use.  So they would have broken even...in a year when they were penalized by Google from mid-January to mid-April, and sent 8 of 13 customers to O.com instead of O.co during the Christmas season.  Zappos was bought for over $900M by Amazon.com or about 1 times revenue.  How can anyone say that Overstock.com is worth about 0.15 of revenues?  Cheers!
Title: Re: OSTK - Overstock.com
Post by: stahleyp on March 02, 2012, 05:15:08 PM
Alright, so I've avoided Overstock so far. However, I was looking on my mom's computer recently and noticed that she has been on there. Also, my sister in law bought some bedding things off there. So, that tells me that some people do use the site and it might have some life in it. I just really wished it had some longer term options. Interesting idea though.
Title: Re: OSTK - Overstock.com
Post by: Hester on March 02, 2012, 07:21:22 PM
Alright, so I've avoided Overstock so far. However, I was looking on my mom's computer recently and noticed that she has been on there. Also, my sister in law bought some bedding things off there. So, that tells me that some people do use the site and it might have some life in it.

This is the silliest comment I've ever seen.
Title: Re: OSTK - Overstock.com
Post by: stahleyp on March 03, 2012, 07:16:03 AM
Alright, so I've avoided Overstock so far. However, I was looking on my mom's computer recently and noticed that she has been on there. Also, my sister in law bought some bedding things off there. So, that tells me that some people do use the site and it might have some life in it.

This is the silliest comment I've ever seen.

You must not read my posts very often.  ;)

But seriously, my mom has recently started buying stuff off there. She is a really good predictor of new trends. If only I had listen to her feelings about COH 10 years ago! She also hates JCP right now with their coupon change. We'll see how that turns out.
Title: Re: OSTK - Overstock.com
Post by: ValueCarl on March 03, 2012, 08:48:10 AM
A man who is coveting at borrowing $50-$100M from his partners at six percent or less in order to retire stock and increase their stakes magically overnight, is not a man ready to sell anything nor go anywhere. This is a Buffett trained man who will serve his owners well in the long term, unlike that narcissistic Prince of Persia bearing false gifts as well as false witness over at BH.

Moreover, before you boys start idolizing Fairfax Gods with great market caps to wage the war against these MISCREANTS that Patrick, or at least the friends he aligned with, the ones who started the movement many years earlier; let's not forget that Big Prem was almost knocked down on the canvass, to never to stand up again!   

Rather than looking for his head, you boys should be thanking the man for all he has done to positively effect the entire financial markets, both foreign and domestic! Stop looking this GIFT HORSE in the MOUTH, and buy stock in size whenever you can down here!  :-X     
Title: Re: OSTK - Overstock.com
Post by: ValueCarl on March 03, 2012, 11:04:07 AM
So then I am thinking about responsibility inclusive of directorships. Patrick chose to take personal responsibility on the call for some of the blunders while hedging a tad bit.

Fairfax's investment guru, and Watsa lieutenant, Sam Mitchell, has been sitting around the Overstock "director table" getting paid to do what, and for how long inclusive of these HORRIFIC GAAP results posted to owners yesterday?   
Title: Re: OSTK - Overstock.com
Post by: ValueCarl on March 05, 2012, 06:31:12 AM
Sam Antar arrives right on time.

http://seekingalpha.com/article/411211-is-overstock-com-in-a-death-spiral


Is Overstock.com In A Death Spiral?
March 5, 2012  |  about: OSTK
Last Friday, Overstock.com (NASDAQ: OSTK) reported a fourth quarter net loss of $3.4 million compared to net income of $14.9 million in the previous year’s fourth quarter. Its revenues declined 10% to $314.1 million compared to $348.9 million in the previous year's fourth quarter. Details of the fourth quarter financial results were so bad, that Overstock.com did not present a full income statement for that quarter in its press release.
Title: Re: OSTK - Overstock.com
Post by: ValueCarl on March 05, 2012, 07:41:54 AM
Hmm....Sam seems to be blocking opposing views from being added to his blog this morning. Tsk, Tsk, if God forbid there was a more positive comment being injected while this "DEATH MARCH" or is it a "DEATH SPIRAL" was being crafted to stimulate fear, uncertainty and doubt(FUD, and I don't mean Elmer!).

This being said, here is what I was trying to write to my friend, Sam, the convicted felon, and if anyone here knows the answer--I'm sure somebody does--please feel free to weigh in. TIA


I notice that you maintain an obsession with how much money Frances Chou is losing according to his investment decisions in this online retailer. Apparently, he along with another combined controlling shareholder, Fairfax Financial (FFH), an entity he had worked at earlier in his career, became the benefactors of 3.75 percent convertible senior notes having been paid out in cash by the end of the quarter.

With somewhat dirt cheap coupons going all the way back to 2004 at issuance, I am sure this investor group weren't first in and holding those notes during the past eight years according to that interest rate.

Have you researched what price below PAR they were paying and when along with your calculation surrounding how much money Chou lost, specifically? You might be surprised.

By the way, I am sorry you struggled to listen to the replay, but if you finally did, I presume you didn't believe their confidence in FCF's moving ahead, especially tied to Q1, and the fact that they're prepared to buy back STOCK down at these levels?     

<We retired all of the remaining $34.6 million of the Senior Notes during the year ended December 31, 2011, for $34.6 million in cash, resulting in a loss of $54,000 on early extinguishment of debt, net of $77,000 of associated unamortized discount. Of the $34.6 million in Senior Notes retired during the year ended December 31, 2011, $10.1 million were held by Chou Associates Management, Inc. or an affiliate of Chou ("Chou") and $21.7 million were held by Fairfax Financial Holdings Limited or an affiliate of Fairfax ("Fairfax"). Chou and Fairfax are beneficial owners of more than 5% of our common stock.>       
Title: Re: OSTK - Overstock.com
Post by: stahleyp on March 05, 2012, 08:01:39 AM
Hmm....Sam seems to be blocking opposing views from being added to his blog this morning. Tsk, Tsk, if God forbid there was a more positive comment being injected while this "DEATH MARCH" or is it a "DEATH SPIRAL" was being crafted to stimulate fear, uncertainty and doubt(FUD, and I don't mean Elmer!).

Dude, it looks like your opposing view is up there. What do you mean by blocking the opposing views?
Title: Re: OSTK - Overstock.com
Post by: ValueCarl on March 05, 2012, 08:09:22 AM
I see it now, and patiently await Sam, I Am's response.  ;)
Title: Re: OSTK - Overstock.com
Post by: Kraven on March 05, 2012, 08:41:49 AM
I see it now, and patiently await Sam, I Am's response.  ;)

Carl, you are like the bizarro world's Dr. Seuss.  My kids could use a new story.  Perhaps you have an update on Horton Hears a Who too?
Title: Re: OSTK - Overstock.com
Post by: ValueCarl on March 05, 2012, 08:55:13 AM
Kraven, I know it's inappropriate for your children, but might you enjoy DIRTY HARRY?  ;D Oh yes, did I say "trigger finger"? I should have!

http://seekingalpha.com/article/411211-is-overstock-com-in-a-death-spiral
Title: Re: OSTK - Overstock.com
Post by: Kraven on March 05, 2012, 09:16:48 AM
Carl, there is a pattern that has developed with any stock you have interest in.  Some words of advice from a great man:  "Relax pal. First lesson in business is don't get emotional about stocks - it clouds your judgement."
Title: Re: OSTK - Overstock.com
Post by: ValueCarl on March 05, 2012, 09:27:59 AM
What's emotional about buying stocks at less than fifteen cents on one dollar of sales, and positive fcf annually even after fighting the criminal thugs on Wall Street with legal expenses while it builds its business stronger during recent tough terrain; partially inflicted by the same thugs aforementioned? 

The emotion has been coming from Sam, I Am, a Convicted FELANNE, and I will not STAND down to the Man! Read that one to your kids, Kraven.

It will be fun to see if that CABAL has the power to take it to FIVE; however, because that's what VALUE INVESTORS get woodies about. Refer to Warren E. Buffett for further "INSTRUCTION" while anticipating Mr. Market to "SERVE" you.

 
Title: Re: OSTK - Overstock.com
Post by: Parsad on March 05, 2012, 11:08:05 AM
You got to admit, Carl in his unique and annoying way, was right about Antar.  It didn't take Sam long to come out with something.  Carl, I would take it down a notch...the volume is getting too high!  Cheers!
Title: Re: OSTK - Overstock.com
Post by: Eric50 on March 05, 2012, 12:05:44 PM
    Sanjeev -

    I don't think you can compare Zappos with Overstock. Zappos has/had a far superior business model and a much more competent management.

    Its business model is based on very liberal free return policies: you can order 10 pairs of shoes and return them for free no questions asked. Margins are also much higher as they don't really compete on price. Bezos understood that years ago and tried to replicate it through endless.com as he could not implement those free return policies through the regular amazon website (you can't have different return policies across the site, you can't have the same liberal return policies for books). Then he got lucky a couple of years ago when the VCs backing zappos wanted/needed to get out quickly. That allowed him to get a key competitor at a decent price (I think he overpaid but it's arguable that it will pay off over time).

    Tony Hsieh is a far better CEO than Patrick Byrne. He has a clear strategy and is focused on execution. We can't really say that of Byrne....

    Having said that, I agree that ostk is dirt cheap. All we need (I own a few shares) is someone at the top with at least some kind of discipline...

    Eric


I think those two businesses are completely comparable.  They be two of the most comparable online businesses you can find, even though their origins were a bit different.

- Overstock.com ranks 550th as the most visited site globally, whereas Zappos.com ranks 601st.
- Both hit about $1B in revenues at the same time.
- Both launched around the same time back in 1999.
- Both deal with online retail.
- Both have excellent customer service.

If you give them a run rate of about $4M in annual legal costs (so a savings of $12M from their 2011 number), and lop off the $8.5M in reductions they are making on the employee side in 2012, you have a buisness that would have about $20M more in pre-tax earnings.  They have something like $160M in tax losses they can use.  So they would have broken even...in a year when they were penalized by Google from mid-January to mid-April, and sent 8 of 13 customers to O.com instead of O.co during the Christmas season.  Zappos was bought for over $900M by Amazon.com or about 1 times revenue.  How can anyone say that Overstock.com is worth about 0.15 of revenues?  Cheers!

--------------------------------------------------------------------------------------------------------------
I'm not sure you understood my point. Overstock competes primarily on price while Zappos is more differentiated with its free return policy. This is like comparing Target with Nordstrom; you just don't have the same kind of margin structure.  Tony Hsieh revolutionized shoes selling on the internet with his free return policy and attracts different kind of customers than ostk.

Also, I'm not sure the market cap to revenue ratio is that relevant in this case. The purchase of zappos by amzn happened almost 3 years ago. I suspect zappos revenue is growing much faster than ostk. It might now be above $1.5bn... Ostk on the other hand is not growing that fast anymore...

But I think we both agree that it's insanely cheap at current price... lol
Title: Re: OSTK - Overstock.com
Post by: ValueCarl on March 05, 2012, 12:49:11 PM
O.K. Sanjeev. I will try to be a little more discreet in delivering my message even though that, I am always looking to enlist a FEW more GOOD MEN to stand tall against these miscreants.

What is most perplexing about the nature of this attack, is the blatant effort by this "CONVICTED FELON" to literally attempt causing a "RUN on the bank!" On the other hand,  he seems to be in bed with the SEC, so I presume his effort to create panics on companies hardly in jeopardy of IMPLOSION is STILL fair game in the U.S. Financial Markets.

Certainly, the earlier note I provided from the 10K indicated a very long time has passed since the SEC has interviewed or inquired any further regarding Overstock.com employees in the matters which Sam brought to their attention.

The fact that they remain silent, MIA, quite frankly, should be making American Blood boil.

But what do I know, since I am just an annoying, however unique, SOB!!!!!!!!!!!!!!  >:( 
Title: Re: OSTK - Overstock.com
Post by: ValueCarl on March 05, 2012, 02:07:14 PM
Wouldn't it be a hoot if that soon to be announced retail "Marketing Executive" ends up coming from Amazon?  :-X
Title: Re: OSTK - Overstock.com
Post by: hellsten on March 06, 2012, 02:08:30 AM
Looking at Francis Chou's holdings it's clear that he's very confident in Overstock's future. FYI, I'm including the Chou funds' investment strategy:
Quote
The investment process followed in selecting equity investments for the Funds is a value-oriented approach to investing. This involves a detailed analysis of the strengths of individual companies, with much less emphasis on short-term market factors. Far greater importance is placed upon an assessment of a company's balance sheet, cash flow characteristics, profitability, industry position, special strengths, future growth potential and management ability

The level of investments in the company’s securities is generally commensurate with the current price of the company’s securities in relation to its intrinsic value as determined by the above factors.

Here's what I found when looking at the semi-annual report from 2011, correct me if I'm wrong:

CHOU ASSOCIATES FUND - JUNE 30, 2011

Overstock was 7.8% of total cost, which is about the same size as BRK.A, AbitibiBowater Inc and BAC-WTA.

Overstock.com Inc.
Shares: 1,504,209     
Cost: $ 31,016,174 
Value: $ 22,077,843

PORTFOLIO TOTAL:
Cost: $ 397,437,904
Value: $ 403,318,649

CHOU RRSP FUND - JUNE 30, 2011

Overstock was 12.5% of total cost, which 4 times more than BRK.A.

Overstock.com Inc.
Shares: 715,500
Cost: $ 14,906,146       
Value: $ 10,501,66

PORTFOLIO TOTAL:
Cost: $  119,483,556
Value: $  122,005,47

Other interesting findings:

JUNE 30, 2008:
The Chou Associates and RRSP funds had $ 788 800 (410 384+378,416) in Jan 2009 call options with a strike price between $ 40.00-45.00. I'm not sure what to make out of this, but I guess Chou thought OSTK could be at $40-45 in Jan, 2009.

JUNE 30, 2010:
the Chou Bond fund had 5% in "Overstock.com Inc., 3.75%". 3.75% seems pretty low…

References:
http://www.choufunds.com/index.html
http://www.choufunds.com/pdf/SemiAR11.pdf
http://www.choufunds.com/pdf/SA10%20pdf.pdf
http://www.choufunds.com/pdf/SA08.pdf

By the way, Torstar Corporation is almost 23% of the RRSP fund's total costs. Torstar is something I have to look into:
http://tmx.quotemedia.com/financials.php?qm_symbol=TS.B
Title: Re: OSTK - Overstock.com
Post by: hellsten on March 06, 2012, 02:51:30 AM
If the Chou funds' total cost for OSTK was $45 922 320 in June 30, 2011 then Francis has increased his holdings by 19.1%.

According to Insider Monkey, Francis Chou has been buying Overstock for a total of $8 772 384.70 starting July 2011:
http://www.insidermonkey.com/insider-trading/company/overstockcom+inc/1130713/purchases/

Who do you think is correct, Sam E. Antar and the media in general, or Francis Chou and Patrick Byrne?
Title: Re: OSTK - Overstock.com
Post by: ValueCarl on March 06, 2012, 05:44:44 AM
Speaking of Sam Antar and the media, this OVERSTOCK DEATH MARCH will continue unabated pointing to Byrne as a woman hater now, it seems with Goldman traders and Bethany McClean references for proof........

http://dagblog.com/business/rush-limbaugh-overstockcom-s-patrick-byrne-misogynists-getting-their-due-13235

The recent report came as a surprise to analysts. Via Reuters:
Analysts, on average, had expected the company to earn 45 cents a share, on revenue of $377.6 million.
One wonders who these analysts are. For those that have kept their eyes on Byrne – a donor to the Swiftboat attacks on John Kerry and a fierce supporter of a failed school voucher initiative in Utah – this collapse of his company has been easy to predict for some time now. And it appears no matter how hard he tries to libel & slander business journalists  (he’s currently being sued for libel in Canada), his company will pay the ultimate price for his mismanagement.
–WKW

Let's review some history in order to capture the essence of how Death March's work including decapitations. It's a damn good thing that the Fighting Irishman, Dr. Byrne, is heading straight for St. Patrick's Day, with a Lucky Leprechaun nearby! BYRNE em, baby!       

http://www.bataansurvivor.com/content/the_bataan_death_march/1.php
Title: Re: OSTK - Overstock.com
Post by: Parsad on March 06, 2012, 11:40:02 AM
If the Chou funds' total cost for OSTK was $45 922 320 in June 30, 2011 then Francis has increased his holdings by 19.1%.

According to Insider Monkey, Francis Chou has been buying Overstock for a total of $8 772 384.70 starting July 2011:
http://www.insidermonkey.com/insider-trading/company/overstockcom+inc/1130713/purchases/

Who do you think is correct, Sam E. Antar and the media in general, or Francis Chou and Patrick Byrne?

It isn't Sam, although I think Patrick is now being forced to realize that they have to keep a tighter rein on costs.  You can't just expect blow-out growth in such a competitive market, unless you have a killer product.  They don't! 

What they are is in the online retail business, which could be very nicely profitable and growing over the long-term.  But like any business, it isn't going to be worth anything if it isn't making money.  They needed to cut costs and they need to focus on the business, not the lawsuit.  I think they may have come to that realization after the case was dismissed and they had this really shitty year!  Cheers! 
Title: Re: OSTK - Overstock.com
Post by: valuecfa on March 06, 2012, 06:13:00 PM
Just listened to the call...i see Sanjeev was mentioned by Patrick.

I agree it is time for Patrick to step down and let someone with more vision/experience in website and retail development to take this company to the next level (consistent profitability).
Title: Re: OSTK - Overstock.com
Post by: Hester on March 06, 2012, 08:23:23 PM
If the Chou funds' total cost for OSTK was $45 922 320 in June 30, 2011 then Francis has increased his holdings by 19.1%.

According to Insider Monkey, Francis Chou has been buying Overstock for a total of $8 772 384.70 starting July 2011:
http://www.insidermonkey.com/insider-trading/company/overstockcom+inc/1130713/purchases/

Who do you think is correct, Sam E. Antar and the media in general, or Francis Chou and Patrick Byrne?

how could Patrick Byrne be "correct" when over the last five years he has been CEO the stock has gone from $17 to $5.

Antar started blogging about Overstock in very early 2007, check his blog. At the very end of 2006, Overstock was Francis Chou's biggest equity position. http://seekingalpha.com/article/33224-francis-chou-s-biggest-bet-overstock-com

So they've both been voicing their opinion concurrently (in much different ways obviously) about Overstock for over five years now. Needless to say, one has been very correct and the other very incorrect so far. http://finance.yahoo.com/echarts?s=OSTK+Interactive#symbol=ostk;range=20070105,20120306;compare=;indicator=volume;charttype=area;crosshair=on;ohlcvalues=0;logscale=off;source=undefined;

But then again, it doesn't matter what Chou or Antar think about Overstock. What only matters are the facts, not lame appeals to authority.
Title: Re: OSTK - Overstock.com
Post by: Parsad on March 06, 2012, 10:10:06 PM
Are you two actually arguing with each other because you agree on the same thing?   ;D  What's the matter with you both! 

By the way, if any of you are still shorting Overstock, I think it may be a big mistake.  Cheers!
Title: Re: OSTK - Overstock.com
Post by: MrB on March 07, 2012, 01:17:37 AM
Looking at Francis Chou's holdings it's clear that he's very confident in Overstock's future. FYI, I'm including the Chou funds' investment strategy:
Quote
The investment process followed in selecting equity investments for the Funds is a value-oriented approach to investing. This involves a detailed analysis of the strengths of individual companies, with much less emphasis on short-term market factors. Far greater importance is placed upon an assessment of a company's balance sheet, cash flow characteristics, profitability, industry position, special strengths, future growth potential and management ability

The level of investments in the company’s securities is generally commensurate with the current price of the company’s securities in relation to its intrinsic value as determined by the above factors.

Here's what I found when looking at the semi-annual report from 2011, correct me if I'm wrong:

CHOU ASSOCIATES FUND - JUNE 30, 2011

Overstock was 7.8% of total cost, which is about the same size as BRK.A, AbitibiBowater Inc and BAC-WTA.

Overstock.com Inc.
Shares: 1,504,209     
Cost: $ 31,016,174 
Value: $ 22,077,843

PORTFOLIO TOTAL:
Cost: $ 397,437,904
Value: $ 403,318,649

CHOU RRSP FUND - JUNE 30, 2011

Overstock was 12.5% of total cost, which 4 times more than BRK.A.

Overstock.com Inc.
Shares: 715,500
Cost: $ 14,906,146       
Value: $ 10,501,66

PORTFOLIO TOTAL:
Cost: $  119,483,556
Value: $  122,005,47

Other interesting findings:

JUNE 30, 2008:
The Chou Associates and RRSP funds had $ 788 800 (410 384+378,416) in Jan 2009 call options with a strike price between $ 40.00-45.00. I'm not sure what to make out of this, but I guess Chou thought OSTK could be at $40-45 in Jan, 2009.

JUNE 30, 2010:
the Chou Bond fund had 5% in "Overstock.com Inc., 3.75%". 3.75% seems pretty low…

References:
http://www.choufunds.com/index.html
http://www.choufunds.com/pdf/SemiAR11.pdf
http://www.choufunds.com/pdf/SA10%20pdf.pdf
http://www.choufunds.com/pdf/SA08.pdf

By the way, Torstar Corporation is almost 23% of the RRSP fund's total costs. Torstar is something I have to look into:
http://tmx.quotemedia.com/financials.php?qm_symbol=TS.B


When it comes to Chou's investment in Overstock readers here should consider the following.
The USDCAD moved as much as 26% from 2009-2011 which distorts CAD reported numbers in a meaningful way. 
The bonds traded down to the low 60's (might even been into the mid fifties) in USD and with someone like Chou I would assume he bought closer to the lows than the highs. These bonds were called at par according to an earlier post. Yet in CAD the returns could look up to 26% weaker.

This is a heavily shorted stock and these guys have to borrow from somewhere and I think it was mentioned on this board that the OSTK rates ranges/ed from 25%-30%. When lending out your stock you get paid that rate on market value, so if you bought say at $15 and the stock increases to $20 you can earn up to 40% on your stock.

Covered calls?? OSTK stock offered some great covered call returns.

I think the probability is high that Chou would have captured some of that value; let me rephrase that...a lot of that value.

Lastly, if you were borrowing at those rates then you would be squealing too and I certainly hear a lot of squealing. However, with all the noise on this board it is hard to know who exactly it is I'm hearing.
Title: Re: OSTK - Overstock.com
Post by: ValueCarl on March 07, 2012, 06:48:32 AM
Sam Antar's evil twin, Gary Weiss, steps up to the plate in order to Whack a Mole! So the beat goes on.........

http://seekingalpha.com/article/416791-the-case-of-the-200-missing-overstock-com-employees
Title: Re: OSTK - Overstock.com
Post by: ValueCarl on March 07, 2012, 07:16:26 AM
SI data is somewhat of a lagging indicator, but one must presume that even if March 1st shows a decrease to the current eye popping numbers representative of the "buy ins" which took place on the day before the earnings report which was March 1st--probably not by coincidence--they would have been shorting more since the day of the report, March 2nd, leading up to now.

As of 2/15/12, with more than 12 percent of the outstanding shares shorted and 23 days of "avg. share volume" to cover, never mind the more narrow "share float" much higher percentage being shorted, while contemplating a real time increase as I write, you can imagine the KABOOM moment that is coming fast at these MOLES.

http://www.nasdaq.com/symbol/ostk/short-interest

What's funny for me, is they must be point guarding for Amazon because besides attempting to disparage and kill a positive free cash flow enterprise with virtually NO DEBT, why wouldn't Amazon be a buyer of one of their competitors at this ridiculous price?     

 
Title: Re: OSTK - Overstock.com
Post by: Hester on March 07, 2012, 07:18:59 AM
Peter Burke, my reply was directed at "Hellsten."
Title: Re: OSTK - Overstock.com
Post by: Hester on March 07, 2012, 07:41:01 AM

When it comes to Chou's investment in Overstock readers here should consider the following.
The USDCAD moved as much as 26% from 2009-2011 which distorts CAD reported numbers in a meaningful way. 
The bonds traded down to the low 60's (might even been into the mid fifties) in USD and with someone like Chou I would assume he bought closer to the lows than the highs. These bonds were called at par according to an earlier post. Yet in CAD the returns could look up to 26% weaker.

This is a heavily shorted stock and these guys have to borrow from somewhere and I think it was mentioned on this board that the OSTK rates ranges/ed from 25%-30%. When lending out your stock you get paid that rate on market value, so if you bought say at $15 and the stock increases to $20 you can earn up to 40% on your stock.

Covered calls?? OSTK stock offered some great covered call returns.

I think the probability is high that Chou would have captured some of that value; let me rephrase that...a lot of that value.

Lastly, if you were borrowing at those rates then you would be squealing too and I certainly hear a lot of squealing. However, with all the noise on this board it is hard to know who exactly it is I'm hearing.

You have very bad data. As of right now, Interactive Brokers has the HTB fee on OSTK at a little over 1% annually. So I don't know where you're coming up with 25-30%. Maybe that was true during the height of the Sith Lord frenzy in the middle of the last decade, but now, one can borrow Overstock almost for free.

I highly doubt Chou was able to really profit much off of the shorting fees. First of all, like I said the fees have been low for a while. Second, taking advantage of the high short interest would mean he would have to be approached by a short seller or (more likely) his broker, and choose to lend out his shares to the evil miscreants on the other side. Likely those asking for inventory would be the same people being sued by Overstock  ;D. Highly Unlikely Chou profited much my view.
Title: Re: OSTK - Overstock.com
Post by: ValueCarl on March 07, 2012, 08:50:39 AM
Under normal situations where enterprises are aligning their costs, especially labor, with the business market conditions taking place, Wall Street cheers jubilantly over such news.

Not these "serial killers" they have hired to destroy value and rob from society, however. I have once suggested that Wall Street and their minion should be required to adhere to some form of the medical field's "Hippocratic Oath" but that's not something these degenerate criminals would allow to happen, just as it's not "legal" to insure or guarantee profits when they lose other peoples money, and garner fees for winning, losing or going nowhere. What other business under the stars can GARNER income and fees for destroying value with no accountability during the process? This is an institution that needs to be GUTTED! 

It seems odd, quite bizarre actually, that Weiss' blog does not allow comments or I would rip him a new one, not that the criminals he works with care, however.  >:(         
Title: Re: OSTK - Overstock.com
Post by: MrB on March 07, 2012, 08:59:17 AM
You have very bad data. As of right now, Interactive Brokers has the HTB fee on OSTK at a little over 1% annually. So I don't know where you're coming up with 25-30%. Maybe that was true during the height of the Sith Lord frenzy in the middle of the last decade, but now, one can borrow Overstock almost for free.

I highly doubt Chou was able to really profit much off of the shorting fees. First of all, like I said the fees have been low for a while. Second, taking advantage of the high short interest would mean he would have to be approached by a short seller or (more likely) his broker, and choose to lend out his shares to the evil miscreants on the other side. Likely those asking for inventory would be the same people being sued by Overstock  ;D. Highly Unlikely Chou profited much my view.

Agh, my mistake. Chou is the kind of guy that misses the 30% and hits the 1%. LOL By the way. I think these days Chou gets the calls rather than make them.   

a great defense of a lousy stock pick.

The point is that the cost/return data might be off. Defense ???
Title: Re: OSTK - Overstock.com
Post by: Parsad on March 07, 2012, 12:13:35 PM
You've only got about 30% float on the outstanding shares and over 35% of that is shorted.  In other words, on any positive news or a share buyback, the shorts are going to get the shit squeezed out of them.  When the shorts were targeting Fairfax, you had about 55% float and about 20% of that was shorted at the peak. 

If Byrne cuts legal by $10-12M, cuts across the board payroll and other expenses to get the $8.5M he quoted in the presentation, and if revenues get back over $1.1B, they should be able to earn about $18-20M after tax (since they will barely pay any tax for the next 5-7 years).  That's about 6 times earnings, for a business that should be able to grow at 10-15% a year.  Cheers!
Title: Re: OSTK - Overstock.com
Post by: tombgrt on March 07, 2012, 12:33:44 PM
$5.15

Guess I have some new work to do!
Title: Re: OSTK - Overstock.com
Post by: ValueCarl on March 07, 2012, 12:50:42 PM
Like BAC, knowing the fear induced from things including delisting notices as well as institutional sales that THE CABAL is spearheading, MENS' CONVICTIONS will be TESTED at that $5 LINE of DEMARCATION.

Sanjeev, get the TRUCKS ready!       
Title: Re: OSTK - Overstock.com
Post by: ValueCarl on March 07, 2012, 01:20:30 PM
A MAN without CONVICTION, is no MAN at all.

Call Sam, and tell him I AM, a MAN with CONVICTION and not a "CONVICTED FELON."

While you're at it, call the authorities and demand that they watch the "back office" trading of this stock which will continue to be exposed to every DIRTY TRICK, legal and illegal, in or outside the book already created, or the one soon to be created so they might have their way.  >:( 
Title: Re: OSTK - Overstock.com
Post by: Hester on March 07, 2012, 01:55:10 PM
You've only got about 30% float on the outstanding shares and over 35% of that is shorted.  In other words, on any positive news or a share buyback, the shorts are going to get the shit squeezed out of them.  When the shorts were targeting Fairfax, you had about 55% float and about 20% of that was shorted at the peak. 

If Byrne cuts legal by $10-12M, cuts across the board payroll and other expenses to get the $8.5M he quoted in the presentation, and if revenues get back over $1.1B, they should be able to earn about $18-20M after tax (since they will barely pay any tax for the next 5-7 years).  That's about 6 times earnings, for a business that should be able to grow at 10-15% a year.  Cheers!

I'm sure there will be at least a little short squeeze at some point in the next few years, as there has been in the past (followed by violent falls), but this company has had pretty much a permanent high short interest since the crazy Sith Lord Conference Call. Overstock shares are very liquid given the company's current market cap. Like I said, the cost to borrow is basically one percent. In the massive short squeezes you see, like SHLD this year for example, the cost to borrow is usually at least 20%. I think Sears was like 40 or 50 percent (don't quote me on that though).

People have been saying this business should be able to grow at 10-15% a year for a very long time. I was reading old articles on OSTK this weekend just for fun, and almost everybody had modeled OSTK's revenue over $1.5 billion by the end of last decade. The VIC writeup in March 2006 had a "conservative" growth scenario of $1.7 billion in revenue by 2009 and an "optimistic" scenario of $2.2 billion.

The problem is Patrick Byrne. If he got lost, or moved to China and started a new company and did an RTO or something, I would probably invest in Overstock at these levels. In fact, I would bet money that they would be a $500 million market cap within 5 years. But until the CEO stops spending so much time using Overstock as his personal jumping board for his eccentric conspiracies, Overstock will never consistently grow anywhere near 10-15% and will be a terminal short.

disclosure: no positions
Title: Re: OSTK - Overstock.com
Post by: Parsad on March 07, 2012, 02:21:09 PM
People have been saying this business should be able to grow at 10-15% a year for a very long time. I was reading old articles on OSTK this weekend just for fun, and almost everybody had modeled OSTK's revenue over $1.5 billion by the end of last decade. The VIC writeup in March 2006 had a "conservative" growth scenario of $1.7 billion in revenue by 2009 and an "optimistic" scenario of $2.2 billion.

Effectively it has:

- Growth in revenues 2002-2012 = 27% annualized

But the last five years of growth has been one good year after one really bad year, over and over. 

And I agree with you, that cost has been a result of Byrne's distractions from the lawsuit and Deepcapture.com.  There is absolutely no reason why a $300M market cap company had to spend $16M on litigation last year!  Or why a small percent of Overstock's revenues were being spent to support Deepcapture.  It's not his little piggy bank! 

At some point, and hopefully it's before they run into a truly stagnant period like Sears, Byrne refocuses the business and resumes his 15% a year trajectory.  If and when that day comes, and I'm definitely betting on it, the shorts are in big trouble!  Cheers!
Title: Re: OSTK - Overstock.com
Post by: ValueCarl on March 07, 2012, 02:31:21 PM
We are back to these legal expenditures as being a bad thing for new comers applying their capital into the security! I heard Dr. Byrne as well as Mr. Johnson say that the monies were well spent minimally, because of the focus which came about at the President's desk in The Oval Office with reference to international terrorism being applied "INSIDE" of our U.S. Financial Markets, with specific reference to "illegal naked short selling." 

Now, I also heard them say, if this did NOT become a FOCUS of ATTENTION, the stock symbol known as OSTK, might be VAPORWARE today.

Note to authorities: Get a handle on the trading taking place in this stock according to all back office operations, FORTHWITH!  >:( 
Title: Re: OSTK - Overstock.com
Post by: Parsad on March 07, 2012, 02:48:54 PM
We are back to these legal expenditures as being a bad thing for new comers applying their capital into the security! I heard Dr. Byrne as well as Mr. Johnson say that the monies were well spent minimally, because of the focus which came about at the President's desk in The Oval Office with reference to international terrorism being applied "INSIDE" of our U.S. Financial Markets, with specific reference to "illegal naked short selling." 

Now, I also heard them say, if this did NOT become a FOCUS of ATTENTION, the stock symbol known as OSTK, might be VAPORWARE today.

Note to authorities: Get a handle on the trading taking place in this stock according to all back office operations, FORTHWITH!  >:(

They didn't need $16M to do it.  They already had the attention two years ago, and they didn't spend anywhere near $16M.  If they won this case, it would have been huge.  But it has been dismissed so far and we'll have to see exactly what happens upon appeal. 

So the "win big, lose little" moto is at work...unfortunately, $16M for a $300M market-cap company, with $30M equity and barely profitable, was more like win big, lose big! 

Let me ask you...whose reputation right now would be ranked the highest...Prem Watsa, Steve Cohen, Jim Chanos, Daniel Loeb, Morgan Keegan, or Adam Sender?  The answer is obviously Prem Watsa!  Prem focused on the business and fought the lawsuit second...and the cost was not exorbitant for a company with $8B in equity.  Cheers!
Title: Re: OSTK - Overstock.com
Post by: ValueCarl on March 07, 2012, 03:26:49 PM
Sanjeev, I am not sure you are being fair with this analogy of Fairfax and Prem specifically, but I will defer to your judgment because you know Fairfax like the back of your hand while you are at home sleeping in your bed, after you tell me this.

What was Fairfax's market cap when they began their legal defense?         
Title: Re: OSTK - Overstock.com
Post by: alertmeipp on March 07, 2012, 03:55:34 PM
http://seekingalpha.com/article/416791-the-case-of-the-200-missing-overstock-com-employees


This company is a goner. Sales are down, losses are mounting, its inept management is running out of steam, the stock price is tanking and investors are fleeing. Bankruptcy is a real possibility. What more is there to say?

If and when Overstock shares dip below $5, it officially becomes a penny stock. Stocks trading so low must be automatically ejected from many institutional portfolios, and they are no longer marginable, so they will be avoided by the many investors who like to buy stocks on margin.


Title: Re: OSTK - Overstock.com
Post by: alertmeipp on March 07, 2012, 04:02:18 PM
http://seekingalpha.com/article/416791-the-case-of-the-200-missing-overstock-com-employees


This company is a goner. Sales are down, losses are mounting, its inept management is running out of steam, the stock price is tanking and investors are fleeing. Bankruptcy is a real possibility. What more is there to say?

If and when Overstock shares dip below $5, it officially becomes a penny stock. Stocks trading so low must be automatically ejected from many institutional portfolios, and they are no longer marginable, so they will be avoided by the many investors who like to buy stocks on margin.


I don't see how OSTK can go BK anytime soon.

http://en.wikipedia.org/wiki/Penny_stock


I have seen better bash work.
Title: Re: OSTK - Overstock.com
Post by: Parsad on March 07, 2012, 04:40:11 PM
Sanjeev, I am not sure you are being fair with this analogy of Fairfax and Prem specifically, but I will defer to your judgment because you know Fairfax like the back of your hand while you are at home sleeping in your bed, after you tell me this.

What was Fairfax's market cap when they began their legal defense?       

Don't worry about market capitalization...worry about equity, because that is actually what they have to spend.  Fairfax's equity was $2.2B...so if they spent even $50M a year, they could afford it...and their equity today is $8B!  Overstock's equity was about $14M and bounced up to $30M at the beginning of 2011.  They could not afford to spend $16M on legal costs.  That's why they have a $17M working capital deficit right now.

I don't see how OSTK can go BK anytime soon.

It's not going bankrupt anytime soon.  They have $95M in cash and they will generate about $30M-$40M in free cash flow this year if they cut payroll and legal as they have said they will do, and their traffic goes back up to levels before the 2011 google penalty.  Traffic has rebounded quite a bit, and I think they will be fine.  But they have to stick to cutting costs and marketing their retail business.  Cheers!   
Title: Re: OSTK - Overstock.com
Post by: stahleyp on March 07, 2012, 05:57:57 PM
what is this about?

"Overstock.com CEO Patrick Byrne had better timing than Francis Chou. Back on May 20 to May 24, 2010, Byrne's 100% controlled High Plains Investments LLC dumped 140,000 common shares at an average price of $22.11 per share and collected over $3 million in proceeds. "
Title: Re: OSTK - Overstock.com
Post by: alertmeipp on March 07, 2012, 06:51:04 PM
I haven't been followed OSTK for quite sometime. Current valuation makes me want to jump in. This thing is cheap, 1 billions revenue, with market cap of 120m. A 3% margin is 30m and easily a triple.

I listened to the call.  Seriously, what is that Patrick guy doing? Seems unprepared to me. But I can tell he will doing everything to make the short squeezed.

If somehow, they can raised 100million debt to buy back. I think we will see a SHLD-type run.

Near-term catalysts:
- Debt and buy-back.
- A respectful marketing executive.
- A management shake-up or sign that Patrick is becoming more OSTK-focused.

The above have good chance of happening, the smart shorts will cover soon.

A few questions:

The payable jump quite a bit, it is a seasonal thing? What's the google penalty ppl are talking about?

They have quite a bit of cash on hand, how much is un-restricted? Can they use cash-on-hand to buyback?
Title: Re: OSTK - Overstock.com
Post by: ValueCarl on March 07, 2012, 08:28:43 PM
How is Dr. Byrne's father doing? I don't see him on the seven person board--just six--and I haven't located a PR where he left since re-arriving in 2010.

http://investors.overstock.com/phoenix.zhtml?c=131091&p=irol-newsArticle&ID=1560370&highlight=

http://www.overstock.com/leadership

What is not stated here for some odd reason,  is that Warren E. Buffett's involvement with Geico was triggered, initially, by Ben Graham's own darling position established in the 1940's as a core holding in his Investment Partnership before being taken to the stock market wood shed due to poor underwriting in the 70's. I am certain Buffett was involved with Geico before Jack Byrne was hired to spearhead the turnaround, and unfortunately, Graham who died in 1975, never lived to see the magic which included Buffett swallowing the whole enchilada as part of the Berkshire Empire today. It seems to me, this Wiki history should be updated by intimate parties with the will to do so.

Who are these PEOPLE attacking this stock again?       

http://en.wikipedia.org/wiki/John_J._Byrne

Insurance industry magnate

After being passed over for president in 1975, Byrne quit to become chief executive of GEICO, then a troubled Washington, D.C. auto insurer. GEICO sold insurance directly to low-risk drivers, but had begun to lose money after underwriting riskier drivers. The company's shares had declined and regulators wanted to shut it down.[3]
Byrne fired more than 1,500 employees, reducing the staff to fewer than 6,400, and closed 23 sales offices. It also stopped writing policies in several states. [4]
GEICO had a turnaround as a result of these measures, which attracted the attention of investor Warren Buffett. He bought a position in the company and eventually his Berkshire Hathaway acquired the company. He has called Byrne the "Babe Ruth of insurance."[3]

In 1985, Byrne was invited to run the troubled Fireman's Fund, then a subsidiary of American Express. Fireman's had incurred $356 million in pretax losses in 1983 and 1984. Byrne vastly improved Fireman's financial performance and initiated a public offering of some of Fireman's shares in 1985. The company was sold to Allianz AG in 1991.[3] Byrne retained the Fireman's holding company, which he later renamed as White Mountains Insurance Group. [3][5]

http://finance.yahoo.com/news/White-Mountains-Repurchases-prnews-498668432.html


HAMILTON, Bermuda, Feb. 23, 2012 /PRNewswire/ -- White Mountains Insurance Group, Ltd. (NYSE: WTM - News) announced today that it has repurchased for cash all 89,729 White Mountains common shares beneficially owned by Berkshire Hathaway Inc. at a purchase price of $500 per share.  The Company has 30,668 shares remaining under its share repurchase authorization.

http://www.enn.com/top_stories/article/32578

Berkshire, an insurance and investment company, initially agreed to invest $300 million in White Mountains in 2001, when the latter paid about $2.2 billion for the U.S. property and casualty operations of Britain's CGNU Group.
Buffett had been a long-time friend of Jack Byrne, who was White Mountains' chief executive at the time. Byrne is credited with improving the fortunes of auto insurer Geico Corp in the 1970s, with Buffett as an investor. Berkshire now owns Geico.
Title: Re: OSTK - Overstock.com
Post by: ValueCarl on March 07, 2012, 08:32:42 PM
I recommended Facebook do this just today, but only on GOLDMAN's LIFE, however!

http://en.wikipedia.org/wiki/Patrick_M._Byrne

"Dutch Auction" IPO
Byrne initiated a Dutch auction IPO of Overstock.com in 2002. The company was one of the first to go public under a system advanced by WR Hambrecht + Co to retain a greater share of capital within the company rather than going to the investment bank underwriters used in conventional public offerings. Byrne has said that competing banks reacted against this, attempting to obstruct the success of the offering through negative reports and by shorting the company's stock.[19] When Google later in 2004 went public via a Dutch auction IPO, Byrne commented that Wall Street firms similarly pushed negative stories, but did not keep it from going forward successfully.[20] Four years after the OpenIPO, one official of Hambrecht, its now former co-CEO Clay Corbus was added to Overstock's board of directors.[21]
Title: Re: OSTK - Overstock.com
Post by: Parsad on March 07, 2012, 11:50:52 PM
what is this about?

"Overstock.com CEO Patrick Byrne had better timing than Francis Chou. Back on May 20 to May 24, 2010, Byrne's 100% controlled High Plains Investments LLC dumped 140,000 common shares at an average price of $22.11 per share and collected over $3 million in proceeds. "

I think like most CEO's, Byrne sells some shares annually and they are pointing out the fact that he sold at a good price.  Big deal!  If he sold a really big chuck of his shares, then it would be something to be concerned with.  He sold around 2%!

How is Dr. Byrne's father doing? I don't see him on the seven person board--just six--and I haven't located a PR where he left since re-arriving in 2010.

It's there, dig around.  He left the board as his health was not good.  Cheers!
Title: Re: OSTK - Overstock.com
Post by: MrB on March 08, 2012, 01:59:52 AM
How is Dr. Byrne's father doing? I don't see him on the seven person board--just six--and I haven't located a PR where he left since re-arriving in 2010.

http://investors.overstock.com/phoenix.zhtml?c=131091&p=irol-newsArticle&ID=1560370&highlight=

http://www.overstock.com/leadership

What is not stated here for some odd reason,  is that Warren E. Buffett's involvement with Geico was triggered, initially, by Ben Graham's own darling position established in the 1940's as a core holding in his Investment Partnership before being taken to the stock market wood shed due to poor underwriting in the 70's. I am certain Buffett was involved with Geico before Jack Byrne was hired to spearhead the turnaround, and unfortunately, Graham who died in 1975, never lived to see the magic which included Buffett swallowing the whole enchilada as part of the Berkshire Empire today. It seems to me, this Wiki history should be updated by intimate parties with the will to do so.

ValueCarl,
Your comment above was a painful reminder of how I misunderstood the Geico deal for years; in particular the risk reward ratio that Buffett took on. I found Alice Schroeder's comments extremely helpful, assuming that she is correct in retelling the story of course. Anyway, it might be old news to you, but for me it was an eye opener. I did not get the following at all.
a) At what point of the "replacement process" of old management did Buffett invest?
b) How instrumental was Jack Byrne to Buffett's decision?
c) How did Buffett structure his "investment"?
d) What was Buffett's own assessment of the risk involved?

If you don't know the answers to the above and are interested then read p.430-438 of Snowball again; I found it fascinating.
If nothing else, you will appreciate the irony of the situation.
Title: Re: OSTK - Overstock.com
Post by: ValueCarl on March 08, 2012, 06:22:41 AM
MrB, much thanks and I would never discount Alice Schroeder's version of the stories contained in Warren E. Buffett's biography. To be truthful, I have only scanned "Snowball" without ever reading it cover to cover. My knowledge of The Graham tie ins, came from Janet Lowe readings.   
Title: Re: OSTK - Overstock.com
Post by: ValueCarl on March 08, 2012, 07:02:13 AM
More FUN for this FIGHTER, DR. Byrne!

http://www.4-traders.com/OVERSTOCK-COM-INC-10372/news/OVERSTOCK-COM-INC-Overstock-com-Announces-Court-Declines-to-Seal-Evidence-in-Goldman-Sachs-Merrill-L-14205152/


SALT LAKE CITY, March 8, 2012 /PRNewswire/ -- Overstock.com, (NASDAQ: OSTK) today announced that in its stock manipulation suit against Goldman Sachs and Merrill Lynch the court denied mostly all of defendants' motion to seal the evidentiary record on the summary judgment hearing. The ruling is significant because the evidence submitted to the court lays out in detail the means by which Goldman Sachs and Merrill Lynch used naked short selling, in concert with others, to manipulate downward Overstock.com's share price.
Title: Re: OSTK - Overstock.com
Post by: stahleyp on March 08, 2012, 08:57:34 AM
what is this about?

"Overstock.com CEO Patrick Byrne had better timing than Francis Chou. Back on May 20 to May 24, 2010, Byrne's 100% controlled High Plains Investments LLC dumped 140,000 common shares at an average price of $22.11 per share and collected over $3 million in proceeds. "

I think like most CEO's, Byrne sells some shares annually and they are pointing out the fact that he sold at a good price.  Big deal!  If he sold a really big chuck of his shares, then it would be something to be concerned with.  He sold around 2%!


As always, thanks for that Sanj!
Title: Re: OSTK - Overstock.com
Post by: PlanMaestro on March 08, 2012, 09:17:50 AM
ValueCarl,
Your comment above was a painful reminder of how I misunderstood the Geico deal for years; in particular the risk reward ratio that Buffett took on. I found Alice Schroeder's comments extremely helpful, assuming that she is correct in retelling the story of course. Anyway, it might be old news to you, but for me it was an eye opener. I did not get the following at all.
a) At what point of the "replacement process" of old management did Buffett invest?
b) How instrumental was Jack Byrne to Buffett's decision?
c) How did Buffett structure his "investment"?
d) What was Buffett's own assessment of the risk involved?

MrB, my Buffett books are already in boxes ready for the moving to a new apartment. Can you indulge me? Are this right? (I was preparing a post precisely on this, but it will have to wait hehehe)

a) Buffett interviewed the already CEO Jack Byrne in a hotel room . When Byrne received the first call from Buffett he did not know who he actually was and dismissed a possible meeting ... only to be pulled back by the ear by former CEO Davidson (the same that instructed a very young Buffett on the insurance business on a Saturday afternoon)
b) That interview was key to Buffett deciding to invest. "If they got the right person in to run it, I think he could turn it around". "He spoke like an owner as distinct from a manager or a bureaucrat."
c) First he took part of the reinsurance, paid a call to the DOI, and then he backstopped the capital raise organized by Solomon Brothers?
d) "This is risky. It could go completely out of business. But in insurance it’s very hard to get an edge, and they have an edge." “I’ve just invested in something that might go under. I could lose the entire investment next week.”

Title: Re: OSTK - Overstock.com
Post by: Parsad on March 08, 2012, 12:19:29 PM
More FUN for this FIGHTER, DR. Byrne!

http://www.4-traders.com/OVERSTOCK-COM-INC-10372/news/OVERSTOCK-COM-INC-Overstock-com-Announces-Court-Declines-to-Seal-Evidence-in-Goldman-Sachs-Merrill-L-14205152/


SALT LAKE CITY, March 8, 2012 /PRNewswire/ -- Overstock.com, (NASDAQ: OSTK) today announced that in its stock manipulation suit against Goldman Sachs and Merrill Lynch the court denied mostly all of defendants' motion to seal the evidentiary record on the summary judgment hearing. The ruling is significant because the evidence submitted to the court lays out in detail the means by which Goldman Sachs and Merrill Lynch used naked short selling, in concert with others, to manipulate downward Overstock.com's share price.

I think that is a huge move in favor of Overstock.com, but me thinks legal costs are also not going to go down anytime soon as this thing goes to appeal and then trial now!  Cheers!
Title: Re: OSTK - Overstock.com
Post by: alertmeipp on March 08, 2012, 01:21:03 PM
how much they can get if they win the case?
Title: Re: OSTK - Overstock.com
Post by: Parsad on March 08, 2012, 02:02:30 PM
how much they can get if they win the case?

Who knows!  Could be a few million to hundreds of million.  If you assume Zappos.com sold for $900M+ and they are saying their business was damaged by the manipulation and naked short selling of their business (whether it was or wasn't you can debate all you want), then that's a pretty substantial claim. 

If it goes to trial, I'm pretty sure Goldman and Merrill Lynch would want to settle...so they would probably offer a $20M settlement.  Which wouldn't even cover Overstock's legal expenses.  So more likely Overstock.com would not even entertain a settlement less than $40M plus legal costs...so around $65M or so.  But you never know...they could end up with $500M or they could even end up with zero!  Cheers!
Title: Re: OSTK - Overstock.com
Post by: Gopinath on March 08, 2012, 02:24:16 PM
Sanjeev,

You know Patrick Byrne wont settle this for cheap sum..Its not really about getting the money & its about exposing them to the world. I think he even stated that in one of his interviews last year.
Title: Re: OSTK - Overstock.com
Post by: alertmeipp on March 08, 2012, 07:29:13 PM
Sanjeev,

You know Patrick Byrne wont settle this for cheap sum..Its not really about getting the money & its about exposing them to the world. I think he even stated that one of his interviews last year.

exposing Who to the world? fairfax has been losing their suits left and right. so far this "foray" into PB personal vendetta using company funds has been an utter disaster for shareholders, as has been his stewardship as CEO.

Just get the debt and start a buyback. 50m buyback will make the shorts scramble to cover. I wonder Chou and FFH would be add to their losing stake.
Title: Re: OSTK - Overstock.com
Post by: ValueCarl on March 09, 2012, 10:56:53 AM
I am noticing that Sam Antar and his brethren are adding "peace" and "good will" cheers to one another on Sammy's BLAH, but I must tell you all that, there will be NO PEACE in Sam's home relative to the burning embers I am SMELLING underneath the Overstock fire that is brewing. As the son of a once fire officer for NY's bravest,  I can promise you all that I have learned a few things about this "SCIENCE" from boyhood on up!

How can peace come to a man trapped inside of a Towering INFERNO where there are NO EXITS?

I guess he can JUMP out of the WINDOWS wherever he resides with his brethren talking TRASH. IMO       
Title: Re: OSTK - Overstock.com
Post by: Smazz on March 09, 2012, 02:06:54 PM
Not to hijack but does anyone have or remember the link where Patrick did a pretty good illustration on short selling? I know it was here (this board) that I saw it but cant for the life of me find it now.

Thanks
Title: Re: OSTK - Overstock.com
Post by: Stone19 on March 09, 2012, 02:53:44 PM

Is this it?                                 January 20th, 2008 by Patrick Byrne

When you or I travel to another country, the first thing we do when we land is change some US dollars into the local currency. Perhaps you change enough to get a cab to the hotel, go out and buy a meal, etc. For the duration of your stay you keep changing your dollars into the local currency to get around. Then when you are ready to leave, you take whatever you have left and you convert it back into dollars, or spend it, or give it away, and board the plane back to the United States .

Yet imagine that there are some travelers to whom special privilege is granted. When they go to a foreign country, they are allowed to take a small machine that prints out the local currency. If they are in Paris , it prints out Euros. If they are in London , it spits out British Pounds. When in Mexico City , it prints pesos. And so on and so forth. On every trip, however, this special “currency machine” keeps track of how many Euros, pounds, or pesos it has spit out. When its owner goes to the airport to leave the country, a government official reads the machine’s printout and makes the traveler settle his account. For example, if the traveler visits Paris , then as he stands in the airport ready to depart, the official reads his machine and says, “Monsieur, you printed out €1,000 (one thousand euros) while you were here. At today’s exchange rate that is equal to $1,500 US.” The traveler hands over US $1,500 in cash, then boards his plane for the US .

Why are such boxes allowed? Because the people to whom this privilege is granted are wealthy hedge fund managers and Wall Street brokers. It is more convenient for them to carry these currency machines, and print what is in effect “temporary” local currency, than to do what the rest of us do, changing currency every morning at our hotel’s front desk. Besides, they’re rich. Everyone knows they are good for it: in fact, when one of them arrives in a new country, before he gets to use his curency machine he has to prove that he is wealthy, so that no matter how much local currency he prints and spends, he’ll have the dollars to buy them all back at the end of his trip, at current exchange rates. That way, when he is ready to leave the country and at the airport his machine is read to find out how much of the temporary local currency he printed on his visit, and that number is converted into US dollars, he can simply reach into his valise and pull out the requisite cash, even if it is thousands, or millions, of US dollars.

Imagine now that between the two Caribbean nations of St. Bart’s and St. Maarten’s there is a small island nation, St. Smallcap. It may be poor in comparison with the United States , but it has a working, even vibrant, economy. Its currency trades at parity with the US dollar (that is, one of the first converts to one of the other, and vice-versa). No one knows what the future holds for St. Smallcap. Perhaps it will stay as it is for generations. Perhaps it will develop into a prosperous island nation like Bermuda . Maybe it will become a destitute, impoverished nation like many other small island nations. Perhaps it will become an economic powerhouse, like Hong Kong or Singapore . There is no way to tell.

One day, as if on cue, a dozen hedge fund managers and Wall Street bankers show up in St. Smallcap. No one thinks much of it as these fellows start driving around Smallcap with their special machines. They print off the local currency with great abandon, using that currency to buy drinks and dinners on the town, pay for taxis, and gamble at the casino. In time, they begin buying the island’s houses, cars, yachts, and cargo ships. They even buy Smallcap National Airline’s sole 727 jet. They buy anything that is not nailed down, paying for it all along with the local currency, which they print off their special currency machines as they need it.

After a few weeks something funny begins to happen. There is so much extra currency floating around, it begins to affect the economy. As everyone realizes that there is a lot of extra currency sloshing around the island, prices for goods rise in anticipation that Smallcap’s currency will become less valuable. It may even happen that prices soar, as they did in Weimar Republic Germany after WWI, in a bout of hyper-inflation. Of course, as this happens, the rate at which Smallcap’s currency can be exchanged against other currencies, including the dollar, collapses.

There is an even more insidious effect, however, that one can understand by thinking about the nature of prices. There are many ways to think about prices. Often we see them simply as obstacles preventing us from getting what we want (”Jim wants a new Mercedes but on his teacher’s salary he cannot pay the price.”) Another way to think of prices, however (a way many economists think of them), is to see prices as little bits of information passing back-and-forth around the economy, permitting millions of strangers to coordinate their economic activities. Prices for corn are going up and prices for wheat are dropping? That is a signal to farmers that they should cut back on wheat production and plant corn instead. Rents soar in a city while prices for office space stagnate? That is a signal that someone should convert some office space to apartments and condominiums. A city is washed out because of a hurricane, and prices for flashlights are soaring? That is a signal to surivivors within the city to share the scarce resource of flashlights, and a signal to outsiders to start trucking in flashlights for resale (i.e., “profiteering,” which to economists means, “responding quickly to price signals without regard for ethical concerns such as loyalty”).

Like any other normal economy, in order to function St. Smallcap’s economy relies on prices to pass information around the economy. The hedge fund managers and their special currency machines, however, print out so much of their “temporary” currency that Smallcap’s economy becomes awash in it. Imagine listening to a radio playing across the room while someone plays white noise in speakers set up next to your ears: you would not be able to hear what was being said. Similarly, this flood of “temporary” currency washes out the signals that prices normally carry within St. Smallcap’s economy. No one knows whether to grow wheat or corn, and since seed prices are rising but no one knows what income can be generated from any crop, fewer farmers plant anything. Savings drop: it makes less and less sense to save, because what is the point of delaying consumption today in return for a future benefit that cannot be estimated? Since less money is being saved, banks have less capital to loan to businesses to expand, or even maintain, current production. As a result, manufacturing on the island also collapses.

One can imagine a situation where, if Smallcap’s economy were small enough, and the Wall Street bankers and hedge funds swept down on Smallcap with enough currency-printing machines, that they could flood Smallcap with so much of its own currency that the price signals of the local economy would be mostly lost. The white noise of massive amounts of this “temporary” currency would disrupt real economic activity, like farming and manufacturing, until the economy of Smallcap cracked. Hyper-inflation, starvation, and mass unemployment might set in. People would begin trading anything they have in return for a ticket to flee the island.

Throughout it all, the Wall Street bankers and hedge fund managers continue using their machines to print local currency with which they can buy, buy, buy.

After six months, when nothing of value is left on the island that they do not already own, the bankers and hedge fund managers take everything they bought and load it onto their new cargo ships and yachts. They gather at the airport to board their new jet.

A government official arrives and sets about to find out how much of the local currency they printed while visiting the island. The official reads the print-out from each of their machines, sums it up and exclaims, “100 million!”

One hedge fund managers speaks for the rest: “Yes, but that is not 100 million US dollars. It is 100 million in your local currency. And while we have been visiting your country your local currency seems to have collapsed. That is hardly surprising, given that your farms are vacant and your factories are boarded up. It seems that on the international markets your currency is worth 1/10,000th of what it was worth when we arrived six months ago. Thus, in US currency, we owe you precisely… $10,000.” He flashes his thick wallet and counts out the sum. Laughing, his hedge fund colleagues and banker friends board their jet and take off, banking to watch their new cargo ships sail out of the harbor loaded with the wealth of the country, for which, in the end, they paid $10,000.

Imagine also that surprisingly few reporters seem interested in these events, or notice the pattern of it happening to one small island nation after another. Those who do notice it take it for granted that small island nations are supposed to be the way they are: destitute and impoverished. Only rarely does a reporter challenge the bankers and fund managers on their actions, but the financiers respond in unison so perfect it appears rehearsed, “Are you kidding? Don’t you know what a dump that island is? The last time I saw St. Smallcap its farms were barren, its businesses were boarded up, and everyone was fleeing. I tell you, the place is just a disaster.”

If you can understand the story above, then you can understand the crime that is occurring in our financial markets (the metaphor is a sound one, if I say so myself). The point of subsequent posts in this category will be to convert the story you just read into Wall Street lingo, one step at a time. You will see how the preceding story precisely expresses behavior that is occurring on Wall Street, routinely, today.

In reality, of course, the “special machines” that bankers and hedge fund managers are using are not actual physical machines, and what they are destroying are not “small island nations,” and what they are printing is not “currency.” In reality, the “special machines” are loopholes in our legal system, what the bankers and hedge funds are destroying are small companies, and the “currency” they are printing off to do so are shares of stock in those small companies.

Title: Re: OSTK - Overstock.com
Post by: Parsad on March 09, 2012, 03:01:35 PM
Overstock shares shorted is about 3.1M ending February 29th.  You only have about 6.6M shares that are not tightly held.  So about 15% of the total shares outstanding or about 40% of the actual float is being shorted.  That means shorts are borrowing, begging and stealing shares to short right now!  Who is lending...can only be a few people really...Fairfax, Chou, White Plains, a myriad of smaller investors?  Don't know, but that is a very big short interest.  Cheers!
Title: Re: OSTK - Overstock.com
Post by: ValueCarl on March 09, 2012, 04:31:22 PM
Hmm, that's an increase of approx. 185K shares heading into the March 2nd earnings report, but still a lagging indicator which must exclude the rush on March 1st, or the day before earnings when some reduction had to occur. However, the aftermath from the day of the call on March 2nd, up until today is reflective of more massive shorting from almost $7 pps on March 1st,  to the approx. $5 low experienced yesterday.

Today, Weiss, Antar's Evil "Seeking Alpha" Twin, provided a zero input analysis offering little value in citing 10K details, some good, some not so good, in order to keep the negative drum beat going towards the close. The useless comments by passerby's to thank these stooges while adding remarks like, I guess it's time to sell, should not be missed. 

If I had my dithers, I would like to see a "MEGAUPLOAD" moment where The Feds finally raid the offices of these miscreants and incarcerate them prior to setting HIGH BAILS to the whole lot of them!

Either way, the BLAZE of FIRE heading for their family members should evoke shock and awe by those observing, if I was reading today's tape correctly. Of course, if "foul play" in the form of "fake shares" is still being applied, the joke might continue on longs. It seems to me, Byrne, etal, believe they have a handle on prior dubious trading in their pits, so I am very comfortable screaming FIRE!  >:( IMO           

 
Title: Re: OSTK - Overstock.com
Post by: ValueCarl on March 09, 2012, 04:42:16 PM
Smazz, Welcome to "The Dark Side" of Dr. Byrne's "Looking Glass."

http://www.youtube.com/watch?v=gpWzOjB8qtU
Title: Re: OSTK - Overstock.com
Post by: Smazz on March 09, 2012, 06:30:56 PM
Smazz, Welcome to "The Dark Side" of Dr. Byrne's "Looking Glass."

http://www.youtube.com/watch?v=gpWzOjB8qtU

Yes, I think that is it.

Thankyou ValueCarl.

Stone, Thankyou.

Yours is a good one also. I was thinking of the visual one.

Thanks
Title: Re: OSTK - Overstock.com
Post by: ValueCarl on March 09, 2012, 06:54:02 PM
So, for the board's head, when I have thought about Strategic Fails to Deliver or FTD's over the years while being partially schooled by the good Dr. Byrne as well as some of his very smart advisers, peers and contacts who have worked diligently on this issue going back more than one decade, nothing becomes clearer than that Carnival Barker, Cramer, part of The Goldman Alumni yelling, "SELL, SELL, SELL" to the RUBES on cnbc.  ;) 
Title: Re: OSTK - Overstock.com
Post by: ValueCarl on March 09, 2012, 07:45:38 PM
Yes, and my "Cramer Visual" is tied to the fact that the "selling fury" that they like to create inclusive of panics surrounding stocks that they're gang banging, is all structured on their intimate knowledge of how they have "rigged" the back office systems at The DTCC which the B/D's including Goldman OWN!

The travesty beyond the destruction of enterprises, economies and governments even, is the fact that the age old adage, “He Who Sells What Isn’t His’n, Must Buy It Back or Go To (Debtor’s) Prison,” said to have been made by a nineteenth century Wall Street trader, and stock operator, Daniel Drew, has been forever lost because of complicit regulators in a corrupt system taken over by Wall Street.  :(     

"Occupy Wall Street?" Send flame throwers at the men controlling the DTCC along with their miscreant hedge funds working the SCAM being aided and abetted!  >:(       
Title: Re: OSTK - Overstock.com
Post by: beerbaron on March 09, 2012, 08:29:42 PM
Can you tell me ValueCarl, why on earth does it matter if there is a huge amount of failed to deliver on Overstock? It blocks them the equity market, but in my opinion, a great company does not need the equity market to strive. There are plenty of private companies that generate so much cash they don't need any other.

So far, Overstock did not strive to say the least and it's not because of the shorts. Their operation was weak, first they invest way too much in IT, then they screw up their IT, then they destroy their name brand... I'm probably forgetting some other great mistakes  here but you get the idea. The shorts had nothing to do with this!

Don't get me wrong here, I admire the combat, but Mr. Byrne is not Robin Hood. Shareholder never gave him "carte blanche" to go and defend whatever illegal he is trying to defend for 16M$. That is just insane! This guy prides himself of being the servant of it's owner, but if my maid starts putting video cameras all over the house to catch the burglars that is not what I'm paying her for!

BTW... At the current price tough it seems like a good risk/reward I start a position. Thanks to those short sellers, it's trading at liquidation prices now :)

BeerBaron
Title: Re: OSTK - Overstock.com
Post by: ValueCarl on March 09, 2012, 08:47:58 PM
Beerbaron, are you saying the equity markets should be privatized and taken out of the hands of Wall Street? Or, is that the essence of what Wall Street along with the international banking cartels have been doing to the equity markets?

You may be onto something I have often thought about as a result of "evolution," America at her peak, and the huge participation of public capital inflows into Wall Street's game historically, i.e. us rubes.

I won't debate Dr. Byrne's actions with you, nor his perceived company failures because of what I am about to write.

That being, investors around the globe owe a great deal of gratitude, thanks and praise to this American Patriot, one whom has been treated with utter disrespect by the Inner Eye comprising Wall Street which I speak about. Other than that, I am with you to a certain extent while saying, GUT the BASTARDS and start anew, but somehow they and their minion will still come out ahead owning and controlling the precious business resources which comprise the earth.

Does this sound familiar, by the way?


Is Overstock.com in a Death Spiral?         
Title: Re: OSTK - Overstock.com
Post by: Hester on March 10, 2012, 06:34:49 AM
That means shorts are borrowing, begging and stealing shares to short right now!  Who is lending...can only be a few people really...Fairfax, Chou, White Plains, a myriad of smaller investors?  Don't know, but that is a very big short interest.  Cheers!

I cannot see how this could possibly be true.

If shorts are really "begging" to borrow the shares, IB wouldn't have the HTB fee between 1-2%, which it was when I checked last (earlier in the week admittedly). Furthermore, when shorts are falling over themselves, it spills over into the options market, and places heavy premiums on put options. Currently (per yahoo finance) the Sep 2012 $5 puts sell for only about 70 cents, and they are pretty liquid (meaning that's a real price). An extremely heavily shorted stock would see a premium of at least a dollar for those puts, probably much more.

Compare this to a stock that is actually heavily shorted, SHLD. The Sep 2012 $75 puts (stock trading at $80) last price was $21.23, or the equivalent of about $1.40 for OSTK.

Everybody on here is overestimating just how heavily shorted Overstock is, and since generally high short interest stocks drastically underperform the market over the long term, I don't understand the giddy.

But then again short sellers are just sellers, and when a stock becomes too hard to borrow that intrinsically shuts off a certain percentage of the people who are willing to place capital at risk because of their bearish opinion. When these negative opinions can't trade in the stock, it means the stock price gets artificially inflated and hence the underperformance of most high short interest stocks.
Title: Re: OSTK - Overstock.com
Post by: alertmeipp on March 10, 2012, 07:28:07 AM
You should check with IB how many shares are actually available. You should some of these IB inventory are from retails and thus small amount.

You compare SHLD put value with OSTK?? SHLD just had a 200% run...and OSTK just had 50% run to downside...
Title: Re: OSTK - Overstock.com
Post by: ValueCarl on March 10, 2012, 07:56:39 AM
That's right peter_burke_ceo, you can't have a "SHORT SQUEEZE" after a "security" has been decimated by a "SELL, SELL, SELL" ATTACK with PHANTOM, COUNTERFEITED SHARES!  >:(

Hester, I like your thinking a lot, and when I saw Overstock move up between 10-15 cents from $5.34 area to $5.45-5.48 pps on less than 8,000 possibly "double counted" Nasdaq shares--who knows the answer to that today?--I knew intuitively this stock's underlying owners have the power to give it great WING SPAN!

He with the MIND SHARE to INFLUENCE along with the PRICING POWER behind the "CURTAIN" will make price by booking it how and when "Mr. Market" sees fit!

I tried to address this with Mr. Munger directly in a recent question with specific inquiry asking him to compare the pricing of securities in the market today including HFT's to his halcyon days of "making markets" over at the Pacific Stock Exchange. My answer was confined to his own that "liquid markets" are not necessary and the writer of "algorithms" is doing the market a disservice!

If Chou and Fairfax want this stock to go down for their own purpose and desires, it will.

If that's a bet being banked by miscreants, like I told Sam, "I Am a Convicted Felon," go ahead with Dirty Harry and make their day!
   
Title: Re: OSTK - Overstock.com
Post by: ValueCarl on March 10, 2012, 08:06:12 AM
peter_burke_ceo's argument is identified clearly in Dr. Byrne's tutorial on The Miscreant Ball and "The Dark Side of The Looking Glass."

The Wall Street Miscreants decide deep down inside the caverns of their CAVES hanging upside down like the BAT CRAZY BASTARDS that they are, that the business sucks, and it is their divine RIGHT to DESTROY it by HOOK or CROOK, with the CROOK part being the only way to ELIMINATE RESISTANCE!  >:(   
Title: Re: OSTK - Overstock.com
Post by: ValueCarl on March 10, 2012, 08:12:59 AM
If Chou or Fairfax or another group of investors are designing a DILUTION PILL in the back offices by "stock issuance", the stock price is adjusting accordingly for this imminent news item reducing IV in the form of my Pizza Pie analogy that has been stricken from this board after a SKIRMISH ensued!   

Go ahead and make their day! 
Title: Re: OSTK - Overstock.com
Post by: Sportgamma on March 10, 2012, 08:55:30 AM
I´m a big admirer of mr. Chou and I´m trying to figure out where he sees the value in OSTK. Maybe you guys could enligthen me?

As I see it, a rough estimate of OSTK´s FCFF today is about 15m p.a. A multiple of 7 would translate to around $4.5 of value per share. OSTK would have to skim about 30m of their operating expenses to bring it to $13.5 per share on a 7-times FCFF multiple, which is about the initial price Chou payed.

Looking at the downside, about $900m of the 2011 revenue came from fulfilment partners. If sales where to drop, OSTK is not stuck with the inventory (only $23m per end of dec. 2011). What really struck my eye though was the fact that OSTK is getting better margins from the fulfilment business than from the products that they take on stock, which makes absolutelly no sense to me. Is this an accounting issue?

Another benefit that I see is the "float" aspect. On average OSTK has about $90m in accounts payables compared to about $10 in receivables.  Still, that would only correspond to about $3.80 per share. 

2011           Direct                   Fulfilment
Rev              163.609           890.668
COGS       149.660           725.529
Margin      9%                   19%

So what does Chou see that I don´t?
Title: Re: OSTK - Overstock.com
Post by: alertmeipp on March 10, 2012, 09:23:01 AM
I think Chou is thinking scale first and cost cutting next thus improve the margin.
If they cut cost by 1% and increases their pricing by 1%, customer will still stay? but all the sudden 20m more FCF.
Title: Re: OSTK - Overstock.com
Post by: beerbaron on March 10, 2012, 09:30:30 AM
Looking at the downside, about $900m of the 2011 revenue came from fulfilment partners. If sales where to drop, OSTK is not stuck with the inventory (only $23m per end of dec. 2011). What really struck my eye though was the fact that OSTK is getting better margins from the fulfilment business than from the products that they take on stock, which makes absolutelly no sense to me. Is this an accounting issue?

What makes no sense, Overstock is an Internet company first and then a distributor. Why would Overstock be able to operate leaner then their partners? They tried a few years ago and they came to the conclusion that they are better off using partners. They used to have a lot more of stock before.

BeerBaron
Title: Re: OSTK - Overstock.com
Post by: ValueCarl on March 10, 2012, 10:30:22 AM
Sportgamma, why do you use the word "skim" from operating expenses? What multiple do you think is fair for FCFP on a public enterprise vs. seven years to earn back one's one dollar of investment capital representing approx. 15 percent per year?

Lastly, where do you think the three percent missing "margin" is in the "fulfillment partner" column numbers you have pasted to this board's attention? tia   
Title: Re: OSTK - Overstock.com
Post by: ValueCarl on March 10, 2012, 10:49:53 AM
Beerbaron, Mr. Buffett likes to take your PRIVATE COMPANIES PUBLIC underneath his Berkshire PUBLIC UMBRELLA with FIVE MULTIPLES or FIVE YEAR PAYBACKS DOLLAR ONE. Why don't we just price Overstock that way so that he can bring his quasi son back to work for him?

Go ahead and make their day! Can you say $3.43 pps with no consideration for tomorrow cash flows, and because this company really sucks?     
Title: Re: OSTK - Overstock.com
Post by: ValueCarl on March 10, 2012, 11:29:46 AM
Let's say that Dr. Byrne borrowed $50M at eight percent, which I wouldn't pay if I were him, in order to buy back X amount of shares as he claims.

Let's assume that Dr. B pays an avg. price of $8 pps for those shares "retiring" 6.25M shares from his books.

Let's also assume that without any "SKIMMING" because that's a DIRTY WORD, that Dr. B makes 30M in fcfp while using my partner's numbers presented earlier including but not limited to "Legal Expense" savings.

Good God can you believe we're partners the way we sometimes chastise one another here including banging heads from time to time, and I still accept him, as he accepts me, because when a man is reasonably right he deserves such respect. That's called mutual friendship, respect and admiration even when we disagree, which can only be expected from any human relationships and interactions. Life just isn't a straight line, nor is it perfect.

Let's also conclude that the claims against these criminal ROBBER BARONS are a complete CF, and there is NO SETTLEMENT from Goldman and the rest.

Finally, let's apply this curmudgeonly SEVEN multiple to the $26M FCFP forward including having subtracted the $4M interest expense on the new straight debt at 8 percent.

I get $10.71 pps using about 17M outstanding shares after the buyback, or a 33.88 percent return on the $50M invested as follows:

2.71 value creation/$8.00 cost=33.88 percent

How are those MARGINS to be delivered by Dr. B compared to investing straight into his business in creating simultaneous VALUE?           
Title: Re: OSTK - Overstock.com
Post by: ValueCarl on March 10, 2012, 12:20:04 PM
So, if I had this close relationship with my personal banker at US BANK CORP., one which continues along amicably including them granting "waivers" by intimately understanding the favorable underlying trends tied to my "internet" business, even accepting and "capping" interest rates at "DIRT CHEAP PRICES" on my ongoing "credit line" with them, and knowing that their COST of FUNDS from the LENDING WINDOWS of the Masters of the Universe(MOTU) who have been enacting ZIRP or ZERO INTEREST RATE POLICIES for an ungodly amount of time, are also near ZERO, I would propose a SIX PERCENT borrow cost to my favorite LENDER, or seek a new LENDER willing to assist my cause at such rates of return.

Depending upon my ultimate $50-$100M borrowing capacity, I just saved my owners another $1-$2M in annual operating cost savings.

This is how banks can assist in building America again, versus trying to kill the GOOSES that lay the GOLDEN EGGS!           
Title: Re: OSTK - Overstock.com
Post by: ValueCarl on March 10, 2012, 01:15:37 PM
Beerbaron, there is one more learning point which should not be missed by you and yours in THE PRIVATE SECTOR. The reason Mr. Buffett is more than happy to pay Wimpy on Tuesday FIVE TIMES the FCF's that his hamburger stands are producing today, is because Mr. Buffett knows intuitively and historically that PUBLIC MARKET multiples during BEAR MARKETS PHASES are TEN, and as much as TWENTY when BULL MARKET PHASES return for most PUBLIC ENTERPRISES' FCF's.

The other fact that must not be ignored, is the GOOD NATURE as well as PUBLIC TRUST including sending their CAPITAL into the hands of those WALL STREET OPERATORS, which makes this magical OVERNIGHT COMPOUNDING EFFECT occur on Mr. Buffett's books beginning Wednesday morning.

Is it no wonder that if a man believes in the longer term, underlying honesty as well as "integrity" of the capital markets, aka, financial markets in his country tied to capitalism being distributed around the globe, that he would "BELIEVE IN AMERICA" going forward, and another BULL MARKET might resume?     

Sportgamma, I am still waiting for your explanation of the 300 basis points missing in the "fulfillment partner" margin line. The calculated margin is 22 percent but quoted as 19. tia   
Title: Re: OSTK - Overstock.com
Post by: Sportgamma on March 10, 2012, 04:05:28 PM
ValueCarl,

When using the phrase skimming, I was mearly refering to a dairy related process. I was unaware of its negative connotation.

http://en.wikipedia.org/wiki/Skim_milk

I´m not familiar with FCFP but I was using a free cash flow to firm multiple which would be comparable to a EBITDA+Capex multiple.

FCFF = EBIT(1-t) - (Capital Expenditures - Depreciation) - Change in non-cash Working Capital

According to Damadoran the average US EV/EBITDA multiple is 7.37 and EV/EBIT is 9.70 (updated in january, n=5891). If you look only at e-commerce EV/EBITDA is 22,08 and EV/EBIT is 32.60 (n=57), so you do have point there. However, I´m more comfortible with a more conservative estimate of fair value.

http://pages.stern.nyu.edu/~adamodar/

Regarding the fulfilment partner margin, I´m not sure what you are refering to. The numbers are taken from the latest 10-k, note 22 on page F-40.
Title: Re: OSTK - Overstock.com
Post by: Parsad on March 10, 2012, 05:36:18 PM
That means shorts are borrowing, begging and stealing shares to short right now!  Who is lending...can only be a few people really...Fairfax, Chou, White Plains, a myriad of smaller investors?  Don't know, but that is a very big short interest.  Cheers!

I cannot see how this could possibly be true.

If shorts are really "begging" to borrow the shares, IB wouldn't have the HTB fee between 1-2%, which it was when I checked last (earlier in the week admittedly). Furthermore, when shorts are falling over themselves, it spills over into the options market, and places heavy premiums on put options. Currently (per yahoo finance) the Sep 2012 $5 puts sell for only about 70 cents, and they are pretty liquid (meaning that's a real price). An extremely heavily shorted stock would see a premium of at least a dollar for those puts, probably much more.

Compare this to a stock that is actually heavily shorted, SHLD. The Sep 2012 $75 puts (stock trading at $80) last price was $21.23, or the equivalent of about $1.40 for OSTK.

Everybody on here is overestimating just how heavily shorted Overstock is, and since generally high short interest stocks drastically underperform the market over the long term, I don't understand the giddy.

But then again short sellers are just sellers, and when a stock becomes too hard to borrow that intrinsically shuts off a certain percentage of the people who are willing to place capital at risk because of their bearish opinion. When these negative opinions can't trade in the stock, it means the stock price gets artificially inflated and hence the underperformance of most high short interest stocks.

Explain where the shares are coming from then?

- Board of Overstock - 36%
- Fairfax - 15%
- Chou - 15%
- Jack Byrne - 5%
- Corner Market Capital & directors - 3.5%

That's already nearly 75% of the total outstanding shares of 23M.  Where is the 3M shares Nasdaq reported short ending February 29th coming from, if only 6M shares are available?  Cheers!
Title: Re: OSTK - Overstock.com
Post by: JEast on March 10, 2012, 05:47:40 PM
On a follow-up to the discussion on legal fees, I would agree that it was quite steep given the market cap.  However, I noticed in the 10-K that the excessive fees may not end as soon as we might expect. While looking at the accrued expenses they appear to have already accrued nearly $7m for 2012.  The report indicates that this $7m is for marketing and legal expenses.  I would suspect that you do not accrue very much for marketing so much of the $7m most likely is for legal support.

Cheers
JEast
Title: Re: OSTK - Overstock.com
Post by: Parsad on March 10, 2012, 06:05:16 PM
Carl, please stick to numbers and facts.  Any future posts that digress will be deleted.  Cheers!
Title: Re: OSTK - Overstock.com
Post by: ValueCarl on March 10, 2012, 09:29:22 PM
Sportgamma, the 10K filing page you have referenced shows no margin percentages. The Fulfillment Partner margin percentage is 22.76 percent according to the factual numbers vs. your 19 percent posted. 

This Free Cash Flow For The Firm(FCFF) is something I was not familiar with. I am familiar with positive free cash flow or FCFP which is reflective of this calculation minus "interest" on debt.

Does FCFF include "interest" on debt as part of "expenses"?

In the case of Overstock, total debt outstanding is now limited to the $17M credit line accessed along with its low interest rate being capped, in order to pay off the almost double, higher amount Senior Convert Notes now retired. 

Skimming is a taboo term that should never be used with references to accounting operations.   

 
Title: Re: OSTK - Overstock.com
Post by: Sportgamma on March 11, 2012, 06:39:30 AM
ValueCarl,

I calculated the margins myself from the numbers given in the 10-K. I don´t know what is causing the discrepancy.

FCFF is used to estimate the value of the enterprise, disgregarding the capital structure. Therefore, it also ignores the tax benefit of interest payments. But you could work it into the appraisal of the debt financing.
Title: Re: OSTK - Overstock.com
Post by: ValueCarl on March 11, 2012, 10:25:15 AM
Sportgamma, ignoring "interest expense" and "taxes" of any given enterprise is dismissing their negative effects to owners in the form of multiples that might be applied to unadulterated free cash flows that truly exist. With "interest expense" mostly a non event except for maybe 500K per year tied to the open $17M credit line which was used to pay off the senior converts, you are only overpaying by about 22 cents per share, today, if you believe in paying 10 multiples vs. 7.   

Please show your math for calculating 19 percent "gross margins" on "Fulfillment Partner" revenues in lieu of the 22.76 percent I have calculated it to be? I believe the error remains in your pen, dissimilar to that MOTLEY FOOL whose errors remain in his SLIPPERY TONGUE.   tia
Title: Re: OSTK - Overstock.com
Post by: Eric50 on March 16, 2012, 11:34:30 AM
Yoy unique visitors down 11.5% in February as per compete.com.... After the SEO google issue in Jan last year, February was the first full month  that gave us a "clean" yoy comp. Not a great news for Q1 results... By comparison, amazon is up 18% yoy in Feb.

http://siteanalytics.compete.com/overstock.com/

Title: Re: OSTK - Overstock.com
Post by: Hester on March 16, 2012, 12:02:00 PM
Yoy unique visitors down 11.5% in February as per compete.com.... After the SEO google issue in Jan last year, February was the first full month  that gave us a "clean" yoy comp. Not a great news for Q1 results... By comparison, amazon is up 18% yoy in Feb.

http://siteanalytics.compete.com/overstock.com/

I was wondering about that. That's a really good data point.
Title: Re: OSTK - Overstock.com
Post by: hellsten on March 19, 2012, 10:31:14 AM
In case you haven't seen, there's a new article on Gurufocus about Overstock:
http://www.gurufocus.com/news/168976/overstock-is-unbelievable--in-a-good-way

Quote
This business is growing at a fair clip. Again, it is a broker. Customers pay for the purchase upfront and Overstock pays the supplier later. This is inherently a negative equity business. The business model is not unlike DELL a decade ago.

Quote
So now you know why Francis Chou is long Overstock and why Costco is Charles Munger’s favorite company.

I'm taking those comments with a grain of salt. Anyway, it seems most people either hate or love Overstock.
Title: Re: OSTK - Overstock.com
Post by: Parsad on March 19, 2012, 10:46:50 AM
It's simplified, but it does describe what I like about the model.  Frankly, I've never understood why Overstock is even in the direct business.  I've sent emails to them before wondering why they just don't stick to the fulfillment business, which has higher margins, no inventory and massive turnover.  Yet, they still go with the direct business and they aren't particularly good on their inventory selection, cost or disposal.  Cheers! 
Title: Re: OSTK - Overstock.com
Post by: lessthaniv on March 19, 2012, 01:21:33 PM
Well, prepare for the worst now ....

I just stepped back into this stock which usually means you should expect a 10-20% swing down anytime!

 :P

I apologize in advance.
Title: Re: OSTK - Overstock.com
Post by: Parsad on March 19, 2012, 02:11:56 PM
Well, prepare for the worst now ....

I just stepped back into this stock which usually means you should expect a 10-20% swing down anytime!

 :P

I apologize in advance.

Way to go Lessthan!  Thanks for screwing us over.   ;D  Cheers!
Title: Re: OSTK - Overstock.com
Post by: Eric50 on March 19, 2012, 02:34:58 PM
I'd love a 20% swing down! I've built a sizable position but I'm hesitant to go really heavy with the yoy decline in unique visitors. Another 20% down in the stock price and I would not hesitate!

FWIW, here is the traffic data on alexa. No hard numbers, just graphs but it seems to confirm the yoy decline seen on compete.

http://www.alexa.com/siteinfo/overstock.com#
Title: Re: OSTK - Overstock.com
Post by: alertmeipp on March 19, 2012, 02:37:30 PM
Well, prepare for the worst now ....

I just stepped back into this stock which usually means you should expect a 10-20% swing down anytime!

 :P

I apologize in advance.

Truth be told, I have similar super-natural power - stock usually goes up 20%+ AFTER I sold some.
Well, I did sell some today (across the board selling to raise cash), so let the battle begins. 8)
Title: Re: OSTK - Overstock.com
Post by: Parsad on March 19, 2012, 02:51:05 PM
I'd love a 20% swing down! I've built a sizable position but I'm hesitant to go really heavy with the yoy decline in unique visitors. Another 20% down in the stock price and I would not hesitate!

FWIW, here is the traffic data on alexa. No hard numbers, just graphs but it seems to confirm the yoy decline seen on compete.

http://www.alexa.com/siteinfo/overstock.com#

Actually, go to the "traffic rank" and compare to Zappos.com over the last three months.  They track almost identical.  I think part of it is seasonal decrease in traffic.  Do it for 6 months and max as well...they track closely.  Cheers!
Title: Re: OSTK - Overstock.com
Post by: Eric50 on March 19, 2012, 03:41:19 PM
I'd love a 20% swing down! I've built a sizable position but I'm hesitant to go really heavy with the yoy decline in unique visitors. Another 20% down in the stock price and I would not hesitate!

FWIW, here is the traffic data on alexa. No hard numbers, just graphs but it seems to confirm the yoy decline seen on compete.

http://www.alexa.com/siteinfo/overstock.com#

Actually, go to the "traffic rank" and compare to Zappos.com over the last three months.  They track almost identical.  I think part of it is seasonal decrease in traffic.  Do it for 6 months and max as well...they track closely.  Cheers!

Yep, I've seen that. Traffic seems better on alexa. What worries me there is the year over year decline in page views per user and time on site. This might mean a lower conversion rate... Do you know any other source that might give us more reliable/precise data on traffic? (I've tried google trends too but found it quite useless).
Title: Re: OSTK - Overstock.com
Post by: prunes on March 19, 2012, 05:13:21 PM
In case you haven't seen, there's a new article on Gurufocus about Overstock:
http://www.gurufocus.com/news/168976/overstock-is-unbelievable--in-a-good-way

Quote
This business is growing at a fair clip. Again, it is a broker. Customers pay for the purchase upfront and Overstock pays the supplier later. This is inherently a negative equity business. The business model is not unlike DELL a decade ago.

Quote
So now you know why Francis Chou is long Overstock and why Costco is Charles Munger’s favorite company.

I'm taking those comments with a grain of salt. Anyway, it seems most people either hate or love Overstock.

I still don't understand what durable competitive advantage the company has versus Amazon. Why can't Amazon compete in this space?
Title: Re: OSTK - Overstock.com
Post by: Parsad on March 19, 2012, 05:35:08 PM
I still don't understand what durable competitive advantage the company has versus Amazon. Why can't Amazon compete in this space?

Amazon doesn't have to compete...they could just buy them for $500M or less right now and it would be cheaper than building the business from scratch.  Frankly, I don't know why Amazon just doesn't make an offer and take them out.  Cheers! 
Title: Re: OSTK - Overstock.com
Post by: compoundinglife on March 19, 2012, 06:33:53 PM

Amazon doesn't have to compete...they could just buy them for $500M or less right now and it would be cheaper than building the business from scratch.  Frankly, I don't know why Amazon just doesn't make an offer and take them out.  Cheers!

Might be addition for SHLD's online business as well, although I doubt they are entertaining any purchases with the current liquidity exercises they are going through.

WRT Amazon and their purchases, this visualization of their investments and purchases is interesting:

http://www.businessinsider.com/~~/f?id=4a6daa20c1432863111130b9





Title: Re: OSTK - Overstock.com
Post by: Parsad on March 19, 2012, 06:41:07 PM
Great chart!  I didn't know Amazon bought Imdb.com.  Cheers!
Title: Re: OSTK - Overstock.com
Post by: lessthaniv on March 20, 2012, 09:00:20 PM
I was intrigued by the analyst questions on the Q42011 conference call referencing internal discussions of stock buybacks using debt. I recognized that nothing is concrete. Just musings at this point. But its interesting to have a closer look at it.

 I've copied the relevant part of the transcript down below, for reference. The numbers given were $50M-$100M of straight debt at a BBB rate (estimated at 8%).

So, just for shits and giggles;

If we take $50M at 9%  then the annual cost of this debt is $4.5M. Let's assume the average cost of the buyback is around $7/share. Those numbers suggest that OSTK could buy in 7M shares representing approximately 30% of the outstanding shares. Assuming those shares are cancelled the share count falls to around 16M. According to the 2011 proxy roughly 15M shares are owned in aggregate by; Chou, Fairfax, Owners & Director's, CMC (according to online posts). 

In other words, for the cost of $4.5M in annual interest payments the entire shareholder base can be solidified for the cost of $4.5M annually. Liquidity would drop but the downside seems low relative to the upside.

Now, looking at the 2011 numbers I note that a $4.5M increase in gross profit is easily attained by a 40 basis point increase in the current gross margin which declined to 17% from 17.4% one year ago. In addition the G&A expenses where huge in 2011. Largely due to legal costs. The annual expense increased 18% or $21M yoy in 2011. While I expect legal costs to continue I would submit that its not likely to continue at this pace annually. That should allow more funds to be loosened up in the coming year.

My point being ... on $1B in revenue - the small margin improvement that I deem possible will easily pay for this and I think it's realistic to be expecting these margin improvements in 2012. I really like this idea.

And if FFH/CHOU could be enticed with a 9% bond the capital structure would remain in solid hands; Overstocks partners are rewarded handsomely by holding attractive debt and supporting their equity stakes; And the long term minority shareholder gets rewarded too with a bigger slice of the pie.

Remember, Francis has all ready expressed a taste for OSTK debt when he began buying the Converts some time ago.

Thoughts?
______________________

Excerpt from Transcript:
Unidentified Analyst

Hi. A question about a comment Patrick you made a little bit ago that I was hopping you could give more clarification on you said that you are not adverse to flopping equity for debt, I presume that means taking on that and buying back shares, what’s the plan for this. What are the thoughts now, things going in wrong directions kind of levering up, if you could just give more color on that comment and then I have one another question for Jonathan after.

Patrick M. Byrne

Sure Steve, I’ve – my – you did read me correctly that yes if we could issue debt had an attractive enough price. That wouldn’t be interested in issuing any debt with any warrants, but a piece of straight debt and at 8-ish percent or something which is where we understand the market for BBB as these days. If we could issue debt at that level and buy an equity, I think that that’s something that we would strongly consider.

Unidentified Analyst

Any thoughts on how much that you would take on, how much stock you would buyback. I know that depends a little bit on the share price but and all for the timing, when you might deal this.

Patrick M. Byrne

Well I shouldn’t be clear this is I’m just sharing my thoughts not that there is no plan to do this. There is no plan as something we’ve of late discussed, but somewhere north of 50 and less than a 100 would be the appetite. And Jonathan is there anything inappropriate without me, so these are just my I’d say my ruminations rather than any corporate plan at this point.

Jonathan E. Johnson III

Yeah, we don’t have a corporate plan in this front, we do have an S3 which filed and effective and it allow us to issue debt and if the market conditions are right and we get the right prices, we always consider, we’re always looking to manage our capital structure on our balance sheet the best we can.
Title: Re: OSTK - Overstock.com
Post by: Parsad on March 20, 2012, 10:38:47 PM
I just merged the "long" and "short" Overstock threads, so now you have just one thread...be it long or short.  Cheers!
Title: Re: OSTK - Overstock.com
Post by: lessthaniv on March 21, 2012, 06:48:24 AM
I just merged the "long" and "short" Overstock threads, so now you have just one thread...be it long or short.  Cheers!

sounds good.

here is the presser with respect to the new hire as marketing head:

Overstock.com Hires Tim Dilworth as SVP, Marketing


2012-03-21 09:00 ET - News Release


Seasoned Coldwater Creek executive brings online and brick and mortar experience to Overstock.com

SALT LAKE CITY, March 21, 2012 /PRNewswire/ -- Overstock.com, Inc. (NASDAQ: OSTK) today announced it has hired Timothy Dilworth, a former executive of Coldwater Creek, as the company's senior vice president of marketing.

(Logo: http://photos.prnewswire.com/prnh/20120110/LA33954LOGO)

The company said Dilworth will be responsible for defining and driving all marketing activities across the Overstock.com organization.

"We're very pleased to welcome Tim to the Overstock.com team," said Patrick Byrne, chairman and CEO of Overstock.com.  "Given Tim's background and experience, we expect he will make an enormous contribution to our company."

Dilworth has worked for Coldwater Creek since 2000 in various positions within the company's marketing group and last held the position of Coldwater Creek's senior vice president of marketing.  Previously, Dilworth had served as vice president of marketing and ecommerce and held other positions at Coldwater Creek in marketing analytics.

Dilworth holds a Business and Information Technology degree from Montana Tech of the University of Montana and a Masters of Business Administration from the University of Idaho.
Title: Re: OSTK - Overstock.com
Post by: alertmeipp on March 21, 2012, 07:13:08 AM
I expected something better.
Title: Re: OSTK - Overstock.com
Post by: Eric50 on March 21, 2012, 09:52:32 AM

Now, looking at the 2011 numbers I note that a $4.5M increase in gross profit is easily attained by a 40 basis point increase in the current gross margin which declined to 17% from 17.4% one year ago. In addition the G&A expenses where huge in 2011. Largely due to legal costs. The annual expense increased 18% or $21M yoy in 2011. While I expect legal costs to continue I would submit that its not likely to continue at this pace annually. That should allow more funds to be loosened up in the coming year.

My point being ... on $1B in revenue - the small margin improvement that I deem possible will easily pay for this and I think it's realistic to be expecting these margin improvements in 2012. I really like this idea.


Overstock is the kind of business that has razor thin margins. To be successful management has to pay permanent attention to details and be relentless in chasing any possible margin improvements. It's a never-ending battle; success is measure by the aggregation of fine tuning all the details. Amazon is doing a great job at that; they are frugal and they keep chasing every single dollar they can on their mature businesses. They have been very consistent in their execution. Had ostk been half that consistent, they would have been very successful...

That's why the stock is so cheap. The market thinks it's a horrible business while it's just a poorly managed one. With a little bit of focus and attention to details, margins could quickly improve. Hopefully the new SVP of marketing understands that... :-)
Title: Re: OSTK - Overstock.com
Post by: Hester on March 21, 2012, 10:19:00 AM
http://yahoo.brand.edgar-online.com/displayfilinginfo.aspx?FilingID=8491369-167470-169748&type=sect&dcn=0001047469-12-002841

Here are the outstanding financial results of Coldwater Creek during the last three years that Tim Dilworth helped them achieve.
Title: Re: OSTK - Overstock.com
Post by: lessthaniv on March 21, 2012, 10:47:24 AM
http://yahoo.brand.edgar-online.com/displayfilinginfo.aspx?FilingID=8491369-167470-169748&type=sect&dcn=0001047469-12-002841

Here are the outstanding financial results of Coldwater Creek during the last three years that Tim Dilworth helped them achieve.

Funny, Sam Antar just tweeted that.
Title: Re: OSTK - Overstock.com
Post by: lessthaniv on March 21, 2012, 11:40:32 AM
Can't attest to the accuracy but this website seems to suggest that Clearwater suffered from a rapid expansion of bricks and mortar businesses:

 The store count went from 345 in 2007 to 421 in 2010. Over the same period net sales per store (1000's) fell from $2,517 in 2007 to $1,782 in 2010. A bonehead time to expand storefronts.

Now they are in the process of rapidly closing storefronts. The 3rd quarter press release suggest they are back to around 366 storefronts with plans to close more.

I find it hard to lay blame on the marketing guy....

I also note that over the same timeframe the e-commerce sales only declined 3% while his marketing budget was essentially halved.

http://retailsails.com/monthly-sales-summary/cwtr/annual/





Title: Re: OSTK - Overstock.com
Post by: txlaw on March 21, 2012, 12:01:38 PM
I was intrigued by the analyst questions on the Q42011 conference call referencing internal discussions of stock buybacks using debt. I recognized that nothing is concrete. Just musings at this point. But its interesting to have a closer look at it.

I found this intriguing as well, but I hadn't done any calculations of what that might mean in terms of percentage ownership after considering a buyback of shares.

This combined with a contribution margin that "wants to be" at 12% could make things interesting.
Title: Re: OSTK - Overstock.com
Post by: Hester on March 21, 2012, 12:10:42 PM
Can't attest to the accuracy but this website seems to suggest that Clearwater suffered from a rapid expansion of bricks and mortar businesses:

 The store count went from 345 in 2007 to 421 in 2010. Over the same period net sales per store (1000's) fell from $2,517 in 2007 to $1,782 in 2010. A bonehead time to expand storefronts.

Now they are in the process of rapidly closing storefronts. The 3rd quarter press release suggest they are back to around 366 storefronts with plans to close more.

I find it hard to lay blame on the marketing guy....

I also note that over the same timeframe the e-commerce sales only declined 3% while his marketing budget was essentially halved.

http://retailsails.com/monthly-sales-summary/cwtr/annual/

Still, I don't think it is a stretch to say ostk shareholders expected a new marketing guy with more accomplishments than, "He wasn't responsible for his previous employers ugly demise."
Title: Re: OSTK - Overstock.com
Post by: lessthaniv on March 21, 2012, 02:30:06 PM
Can't attest to the accuracy but this website seems to suggest that Clearwater suffered from a rapid expansion of bricks and mortar businesses:

 The store count went from 345 in 2007 to 421 in 2010. Over the same period net sales per store (1000's) fell from $2,517 in 2007 to $1,782 in 2010. A bonehead time to expand storefronts.

Now they are in the process of rapidly closing storefronts. The 3rd quarter press release suggest they are back to around 366 storefronts with plans to close more.

I find it hard to lay blame on the marketing guy....

I also note that over the same timeframe the e-commerce sales only declined 3% while his marketing budget was essentially halved.

http://retailsails.com/monthly-sales-summary/cwtr/annual/

Still, I don't think it is a stretch to say ostk shareholders expected a new marketing guy with more accomplishments than, "He wasn't responsible for his previous employers ugly demise."

That is just a ridiculous comment.  You're willing to piss all over the guy within minutes of the press release (a carbon copy of Sam Antar's morning tweets) being issued and you blindly and carelessly attribute his past employers financial performance to his lack of skill ?!? The truth is you have no fricking clue what role his efforts played in the companies recent financial performance. You just saw it as an easy opportunity to take a shot a Overstock. Plain and simple.
Title: Re: OSTK - Overstock.com
Post by: Parsad on March 21, 2012, 03:05:25 PM
The proof is in the pudding.  Let's wait and see what changes happen, and how it drives traffic and sales.  I like where he's from, because they need someone who understands Overstock's demographic.  I'm disappointed, like others, that he came from a business that is struggling and it's hard to decipher his work against the business' results.  Like I said, let's wait and see.  Besides, having marketing out of Patrick's hands is already really good news!  Cheers! 
Title: Re: OSTK - Overstock.com
Post by: alertmeipp on March 21, 2012, 03:14:53 PM
u guys should listen to what Patrick said about this incoming executive - gave me high hope...
Title: Re: OSTK - Overstock.com
Post by: Hester on March 21, 2012, 06:03:55 PM

That is just a ridiculous comment.  You're willing to piss all over the guy within minutes of the press release (a carbon copy of Sam Antar's morning tweets) being issued and you blindly and carelessly attribute his past employers financial performance to his lack of skill ?!? The truth is you have no fricking clue what role his efforts played in the companies recent financial performance. You just saw it as an easy opportunity to take a shot a Overstock. Plain and simple.

lol, calm down.

I didn't know Sam Antar patented the act of looking at the past business performance of a company that a new executive came from. WTF. Next time I look at the income statement of a company that a new executive worked at for 10 years and see that they lost $100 million on $775 million in sales last year, I'll be sure to check Sam Antar's twitter to make sure he didn't also mention this blatantly obvious fact.

Second, I didn't "blindlessly and carelessly" attribute the past financial performance to his lack of skill. I actually agreed with you in my last post and pointed out not that he has no skill, but rather that he has no noticeable accomplishments.

Read my last post closer and take it easy on the caffeine.
Title: Re: OSTK - Overstock.com
Post by: Mephistopheles on March 28, 2012, 07:25:54 PM
The proof is in the pudding.  Let's wait and see what changes happen, and how it drives traffic and sales.  I like where he's from, because they need someone who understands Overstock's demographic.  I'm disappointed, like others, that he came from a business that is struggling and it's hard to decipher his work against the business' results.  Like I said, let's wait and see.  Besides, having marketing out of Patrick's hands is already really good news!  Cheers!

Hi Parsad,

I've researched quite a bit about this company, and I like many things about it that have been mentioned about it on this thread. But what worries me is the recent drop in yoy sales, customer traffic, and customer orders, given that a major thesis is the sales growth rates, and especially given that in the same periods Amazon fared much, much better. I know that it's such a short period to measure, especially put up against 10 years of immense growth, but the 10% sales drop in the most important quarter of the year raises a red flag. It's hard to blame it on the Google penalty, given that it was resolved last summer.

So anyway, I was wondering what your take is on this.

Thanks
Title: Re: OSTK - Overstock.com
Post by: Parsad on March 28, 2012, 11:22:01 PM
The proof is in the pudding.  Let's wait and see what changes happen, and how it drives traffic and sales.  I like where he's from, because they need someone who understands Overstock's demographic.  I'm disappointed, like others, that he came from a business that is struggling and it's hard to decipher his work against the business' results.  Like I said, let's wait and see.  Besides, having marketing out of Patrick's hands is already really good news!  Cheers!

Hi Parsad,

I've researched quite a bit about this company, and I like many things about it that have been mentioned about it on this thread. But what worries me is the recent drop in yoy sales, customer traffic, and customer orders, given that a major thesis is the sales growth rates, and especially given that in the same periods Amazon fared much, much better. I know that it's such a short period to measure, especially put up against 10 years of immense growth, but the 10% sales drop in the most important quarter of the year raises a red flag. It's hard to blame it on the Google penalty, given that it was resolved last summer.

So anyway, I was wondering what your take is on this.

Thanks

I agree...it is a concern.  Unfortunately, you cannot do anything unless you are actually running the company.  You are going to have to factor the risk into your analysis. 

Our contention is that someone who grows a company from zero to $1.1B in revenue in ten years didn't suddenly become stupid.  They still had $1.07B in sales over the last 4 quarters and nearly 25m customers...so it's either an operational miscalculation (inventory selection, pricing, service) or a marketing mistake (O.co, Google penalty, online and offline advertising).  I think it was a little of both, but more on the marketing side.  We'll have to see how they do quarter after quarter going forward, and if there is any improvement with the addtion of Tim Dilworth.  Cheers!
Title: Re: OSTK - Overstock.com
Post by: valueInv on March 28, 2012, 11:43:53 PM
Our contention is that someone who grows a company from zero to $1.1B in revenue in ten years didn't suddenly become stupid. 
Careful with that reasoning. Taking a company from $1B to $2B may require a very different managerial skillset than taking a company from 0 to $1B.
They may also be operating in very different environment. This same reasoning was applied to RIMs previous management. The problem is they kept doing what made them successful in the first place when they needed to do something completely different. I have seen companies fail because of this.
Compare how Nokia has responded to the iPhone/Android threat to how RIM has responded to a good case study on this.

Its not that management suddenly turned stupid. They did what was logical - relied on methods that were "tried and true".
Title: Re: OSTK - Overstock.com
Post by: Parsad on March 29, 2012, 12:15:16 AM
Our contention is that someone who grows a company from zero to $1.1B in revenue in ten years didn't suddenly become stupid. 
Careful with that reasoning. Taking a company from $1B to $2B may require a very different managerial skillset than taking a company from 0 to $1B.
They may also be operating in very different environment. This same reasoning was applied to RIMs previous management. The problem is they kept doing what made them successful in the first place when they needed to do something completely different. I have seen companies fail because of this.
Compare how Nokia has responded to the iPhone/Android threat to how RIM has responded to a good case study on this.

Its not that management suddenly turned stupid. They did what was logical - relied on methods that were "tried and true".

Of course. 

I think you have to take a look and examine what aspects of the business or environment has changed?  Has Overstock's customer base or demographics changed?  Has their retail niche of excess or closeout inventory changed?  Has their competition changed?  Are their competitors using a completely different form of sales?  Does the existing management team have the skills to grow the business further?  Are they still competitive on price, service, execution and shipping?  Are they spending advertising dollars wisely, and with very specific targets in mind?  Are general operating costs adequate...or are they too high?  Is their inventory selection meeting the demands of their customer base?  Is their core customer base growing?  Do they have adequate independent oversight on the board?  Are compensation incentives aligned with operational and shareholder interests? 

These are just a fraction of the questions you ask and run through to determine the strengthes and weaknesses of a business.  And they change based on economic conditions, the competitive environment and simply over the passage of time.  Evaluating a business is never static. 

What Prem may have seen in RIMM 2 years ago, could have changed far more rapidly than he ever expected.  Or even what Steve Jobs saw in Apple ten years ago when he returned, could never have been imagined in less than a decade by virtually anyone else...maybe not even Jobs!  That's why investing is as much art as science.  You calculate risk to the best of your abilities...both tangible and intangible...and then you make your bet and analyze quarter by quarter, year by year to see what portion of your theories have changed.  Cheers!   
Title: Re: OSTK - Overstock.com
Post by: Parsad on April 02, 2012, 09:53:52 AM
SEC closes 2009 OSTK investigation.  Wonder what else Sam is going to come up with now!  Cheers!

http://finance.yahoo.com/news/overstock-com-announces-close-sec-130000147.html
Title: Re: OSTK - Overstock.com
Post by: alertmeipp on April 02, 2012, 10:29:08 AM
With OSTK near multiple years low?
Title: Re: OSTK - Overstock.com
Post by: lessthaniv on April 02, 2012, 10:33:00 AM
SEC closes 2009 OSTK investigation.  Wonder what else Sam is going to come up with now!  Cheers!

http://finance.yahoo.com/news/overstock-com-announces-close-sec-130000147.html

Differences between 2011 and 2012:

1) About $8M in excess legal expense due to patent troll lawsuits.
2) About $8.5M in excess Tech related labour costs that has now been reduced in Jan 2012.
3) Contribution Margin was hurt due to Google penalties and branding issues. I look for a potential 1% improvement. On $1B in sales that's another $10M.
4) They paid off $35M in convertible notes, $25M in Master lease agreements, and borrowed $17M from the LOC to help cover this leaving them with $97M in cash. So, CFF where negatively impacted by  ($43M) due to extinguishing debt.

If they can get their top line growth back - that's gravy.

Also, in the last 3 years their working capital requirements have been reduced by $65M and now are ($14M). Sam and his calloused fingered friends suggest OSTK is on the brink of bankruptcy because the working capital is negative. They go on to say that OSTK will have to dilute by raising capital. On the contrary this shows the efficiency of OSTK's model. A consumer buys a rug. The credit card gets charged and collected quickly. The rug gets shipped (customer is happy) and roughly 30 later OSTK pays out the supplier. The fact that they are collecting cash much faster then they need to pay out suppliers is a good thing. Although Sam Antar, in true Chicken Little fashion, believes the world is coming to an end.

OSTK pays out its suppliers in 30 days. Amazon pays out its suppliers in 90 days. In other words, as OSTK gains scale we could see OSTK negotiate longer payable periods and perhaps continue to reduce their working capital needs.

The invested capital is low (sets up a great ROIC) and free cash flow is set to continue to grow.  Ask Mr. B over at Amazon what  the best way to measure this business is!

 ;D


 
Title: Re: OSTK - Overstock.com
Post by: CONeal on April 04, 2012, 08:24:19 PM
Been looking at the company for the past few months and while the company is cheap decided to pass for the following reasons.

In my view Patrick's extracurricular activities (the lawsuit) has me wondering what is more important to him.  Building a top notch company or go into raving rants about Darth Vador during conference calls.  While he has a point about the lawsuit, His distractors are actually winning bc they have got him to focus his attention on things that are not related to building the business.  With the appeal, it doesn't seem like this is changing anytime soon nor the legal fees. 

The most important reason for staying away though is sales tax on purchases over the Internet.  This will probably cause a major shift in consumer behavior since most purchases are done to avoid the tax.  If a bill is not passed pretty soon allowing for a federal tax to be charged, some states will prusue it on their own.  If this occurs how will it affect businesses and also the valuations paid in takeovers.

Feel free to point out where I've fallen off the wagon but these are the two sticking points that has me staying away from investing in Patrick and Overstock.
Title: Re: OSTK - Overstock.com
Post by: compoundinglife on April 04, 2012, 09:09:39 PM

The most important reason for staying away though is sales tax on purchases over the Internet.  This will probably cause a major shift in consumer behavior since most purchases are done to avoid the tax.  If a bill is not passed pretty soon allowing for a federal tax to be charged, some states will prusue it on their own.  If this occurs how will it affect businesses and also the valuations paid in takeovers.


You think there will be a shift in U.S. Internet consumer behavior or specifically in OSTK customer behavior? Also curious what data you used to come to the conclusion that sales tax avoidance is the driver.
Title: Re: OSTK - Overstock.com
Post by: CONeal on April 04, 2012, 09:21:31 PM

The most important reason for staying away though is sales tax on purchases over the Internet.  This will probably cause a major shift in consumer behavior since most purchases are done to avoid the tax.  If a bill is not passed pretty soon allowing for a federal tax to be charged, some states will prusue it on their own.  If this occurs how will it affect businesses and also the valuations paid in takeovers.


You think there will be a shift in U.S. Internet consumer behavior or specifically in OSTK customer behavior? Also curious what data you used to come to the conclusion that sales tax avoidance is the driver.

I think a shift is coming for the Internet in general if/when this goes into affect, Calif starts charging Amazon in Sept if Federal tax is not passed by then. 

I can't provide hard data, just from watching friends buying habits how they preach buying stuff online to avoid the tax.
Title: Re: OSTK - Overstock.com
Post by: valueInv on April 04, 2012, 11:34:07 PM

The most important reason for staying away though is sales tax on purchases over the Internet.  This will probably cause a major shift in consumer behavior since most purchases are done to avoid the tax.  If a bill is not passed pretty soon allowing for a federal tax to be charged, some states will prusue it on their own.  If this occurs how will it affect businesses and also the valuations paid in takeovers.


You think there will be a shift in U.S. Internet consumer behavior or specifically in OSTK customer behavior? Also curious what data you used to come to the conclusion that sales tax avoidance is the driver.

I think a shift is coming for the Internet in general if/when this goes into affect, Calif starts charging Amazon in Sept if Federal tax is not passed by then. 

I can't provide hard data, just from watching friends buying habits how they preach buying stuff online to avoid the tax.

There are a lot of factors driving online buying other than sales tax avoidance:
 - Convenience:  You don't have to drive an hour each way. find parking, lose half your day. etc
 - Selection and long tail: There are a lot of items that you can find online that you cannot find locally. Where can you find a store with Amazon's selection?
 - Information: You can research and compare items online in ways that are not simply possible offline.

I don't expect buyer behavior to change much but margins may narrow a bit.
Title: Re: OSTK - Overstock.com
Post by: CONeal on April 05, 2012, 07:47:59 AM
ValueInv,

Your right there are convience and other factors at play also.  I'm not saying that online purchases will disappear althougher.  I'm saying the 7% discount (sales tax) that factors into decisions to buy online will be gone.  This drives a certain % of online sales. (What % I don't know)

Convience works both ways.  When you have to sign for a package that was purchased online its also a hassle for timing the FedEx guy and getting off work.
Title: Re: OSTK - Overstock.com
Post by: beerbaron on April 05, 2012, 03:13:38 PM
Convience works both ways.  When you have to sign for a package that was purchased online its also a hassle for timing the FedEx guy and getting off work.

Just ship to your work instead. It's the most wonderfull thing in the world to break a crappy day by the good feeling of receiving your new toy :)

BeerBaron
Title: Re: OSTK - Overstock.com
Post by: hellsten on April 15, 2012, 03:09:07 PM
Here's a link to the latest attack on Overstock and Patrick Byrne, this time by an amateur boxer and bouncer:
http://dagblog.com/business/overstockcom-ceo-patrick-byrne-palling-around-terrorists-13567

The article is not interesting in itself, but it led me to this article from 2005:
http://money.cnn.com/magazines/fortune/fortune_archive/2005/11/14/8360711/index.htm

Interesting to see that no other than Michael Burry and Scion Capital were interested in Overstock. In June 30, 2005, Michael Burry owned 6.95% of Overstock, or almost 19 million shares:
http://www.sec.gov/Archives/edgar/data/1130713/000092299605000099/scion_13g-overstock.htm

In September 2007 he held only 250 000 shares:
http://www.sec.gov/Archives/edgar/data/1182422/000108514607001105/scio3q07.txt

Would be interesting to hear Michael Burry's thoughts about Overstock then, and now.
Title: Re: OSTK - Overstock.com
Post by: Eric50 on April 15, 2012, 11:51:22 PM
YOY unique visitors down 9.6% in March....

http://siteanalytics.compete.com/overstock.com/
Title: Re: OSTK - Overstock.com
Post by: Hester on April 16, 2012, 08:13:25 AM
http://siteanalytics.compete.com/zappos.com/
http://siteanalytics.compete.com/amazon.com/

Zappos unique visitors up over 19% YOY, Amazon up 15% YOY.
Title: Re: OSTK - Overstock.com
Post by: stahleyp on April 16, 2012, 10:02:33 AM
Doesn't that include the deals OSTK had with living social and things too?
Title: Re: OSTK - Overstock.com
Post by: Parsad on April 19, 2012, 07:20:47 AM
1st Q report out:

http://finance.yahoo.com/news/overstock-com-returns-1st-quarter-141104770.html

Good progress on cost cutting.  As I said before...absolutely no reason why this company cannot be profitable on an annual basis. 

Need to push fulfillment business, rather than direct business.  With continued cost cutting, improved merchandising and marketing, revenues and profits should increase.  Cheers!
Title: Re: OSTK - Overstock.com
Post by: lessthaniv on April 19, 2012, 07:34:21 AM
 
1st Q report out:

http://finance.yahoo.com/news/overstock-com-returns-1st-quarter-141104770.html

Good progress on cost cutting.  As I said before...absolutely no reason why this company cannot be profitable on an annual basis. 

Need to push fulfillment business, rather than direct business.  With continued cost cutting, improved merchandising and marketing, revenues and profits should increase.  Cheers!

 ;D
Title: Re: OSTK - Overstock.com
Post by: Mephistopheles on April 21, 2012, 10:31:19 PM
1st Q report out:

http://finance.yahoo.com/news/overstock-com-returns-1st-quarter-141104770.html

Good progress on cost cutting.  As I said before...absolutely no reason why this company cannot be profitable on an annual basis. 

Need to push fulfillment business, rather than direct business.  With continued cost cutting, improved merchandising and marketing, revenues and profits should increase.  Cheers!

Agree on the cost cutting. Was disappointed that they didn't talk about buying back stock like they did in the last CC. Overall I was pleased.
Title: Re: OSTK - Overstock.com
Post by: Mephistopheles on April 30, 2012, 01:35:38 PM
I thought I'd share with you all this web analytics site I came across that is much better, in my opinion, than Compete.com.

http://www.alexa.com/
Title: Re: OSTK - Overstock.com
Post by: manualofideas on June 08, 2012, 04:49:55 PM
Interview with Glenn Surowiec on Overstock - enjoy!

http://greatinvestors.tv/video/what-the-market-is-missing-in-overstock-ostk-and-why-it-is-t.html
Title: Re: OSTK - Overstock.com
Post by: lessthaniv on June 08, 2012, 05:16:56 PM
Great stuff MOI, thanks for sharing !!
Title: Re: OSTK - Overstock.com
Post by: OracleofCarolina on June 12, 2012, 12:24:59 PM
http://m.seekingalpha.com/article/654111-overstock-com-oversold?source=yahoo

Bullish article from SA
Title: Re: OSTK - Overstock.com
Post by: Granitepost on July 19, 2012, 06:17:00 AM
OSTK 2012 Q2 earnings look encouraging.  It is nice to see a profit, even though it is not large.
Revenue: $239.5M vs. $235.0M (2% increase);
Gross margin: 18.0% vs. 16.9% (110 basis point increase);
Gross profit: $43.2M vs. $39.8M (8.5% increase);
Sales and marketing expense: $13.5M vs. $13.7M (1% decrease);
Net income (loss): $470,000 vs. $(7.8)M ($8.3M increase); and
Diluted EPS: $0.02/share vs. $(0.34)/share ($0.36 increase).
Title: Re: OSTK - Overstock.com
Post by: Parsad on July 19, 2012, 01:41:03 PM
OSTK 2012 Q2 earnings look encouraging.  It is nice to see a profit, even though it is not large.
Revenue: $239.5M vs. $235.0M (2% increase);
Gross margin: 18.0% vs. 16.9% (110 basis point increase);
Gross profit: $43.2M vs. $39.8M (8.5% increase);
Sales and marketing expense: $13.5M vs. $13.7M (1% decrease);
Net income (loss): $470,000 vs. $(7.8)M ($8.3M increase); and
Diluted EPS: $0.02/share vs. $(0.34)/share ($0.36 increase).

Hey, I said this business should be profitable quarter in and quarter out.  I spoke to Sam Mitchell about this in Toronto, and I think the Overstock team, as well as their board, is focused on doing just that.  Sam said 2012 was their year to prove it and so far so good.  Usually the 2nd quarter is a tough quarter and they lose money in the 3rd quarter as well, as they ramp up for the big 4th quarter, but if they have a profitable 3rd quarter as I expect, then they should finish 2012 with excellent results.  Cheers!
Title: Re: OSTK - Overstock.com
Post by: premfan on July 19, 2012, 02:08:33 PM
I  have been thinking about starting a small position for months but cant make myself to pull the trigger due to managements inability to control SG & A. Comparing the numbers with amazon there is no reason why overstock cant earn sustainable profits.  I fear that management will keep ramping up the SG & A percent to revenue each year. The company is growing revenue at an impressive rate for the last decade. Management needs to have some sort of normalized SG & A percent to revenue like amazon does.  Amazon is 11-13 percent SG & A since 06.  Overstock since 06 is 9-17 percent SG and A compared to revenue. Thats a massive spread due to horrible management. I love there business but new management is definitely needed. I would like to understand this story better. Overstock experts any insight?
Title: Re: OSTK - Overstock.com
Post by: Parsad on July 19, 2012, 02:44:25 PM
I  have been thinking about starting a small position for months but cant make myself to pull the trigger due to managements inability to control SG & A. Comparing the numbers with amazon there is no reason why overstock cant earn sustainable profits.  I fear that management will keep ramping up the SG & A percent to revenue each year. The company is growing revenue at an impressive rate for the last decade. Management needs to have some sort of normalized SG & A percent to revenue like amazon does.  Amazon is 11-13 percent SG & A since 06.  Overstock since 06 is 9-17 percent SG and A compared to revenue. Thats a massive spread due to horrible management. I love there business but new management is definitely needed. I would like to understand this story better. Overstock experts any insight?

I think that Steve Chestnut and Jonathan Johnson are working to help keep things more orderly.  Along with the board playing a more intricate role...such as not allowing the buybacks just yet.  As long as they can keep Patrick focused, Overstock will do fine.  Cheers!
Title: Re: OSTK - Overstock.com
Post by: link01 on July 19, 2012, 04:07:39 PM
I  have been thinking about starting a small position for months but cant make myself to pull the trigger due to managements inability to control SG & A. Comparing the numbers with amazon there is no reason why overstock cant earn sustainable profits.  I fear that management will keep ramping up the SG & A percent to revenue each year. The company is growing revenue at an impressive rate for the last decade. Management needs to have some sort of normalized SG & A percent to revenue like amazon does.  Amazon is 11-13 percent SG & A since 06.  Overstock since 06 is 9-17 percent SG and A compared to revenue. Thats a massive spread due to horrible management. I love there business but new management is definitely needed. I would like to understand this story better. Overstock experts any insight?

yea, i go way back with overstock. as more of a buy & holder than a trader i've got what can be charitably called a checkered history with ostk as an investment over the yrs.

patrick may be a dr of philosopy with a major in the taoist/buddhist disciplines but at heart he's a very emotional, gut-feel, shoot from the hip kind of guy. when he's had a good qtr or 2 of favorable comps & the wind at his back he tends to go off the rails & swing for the fences, eschewing the smaller, more measured incremental gains that take deeper root in more fertile ground & sow the seeds for future solid compounded growth.
that said, i seem to have a soft spot in my heart (as well in my head!) for the the good dr & ostk, and am a perennial fan, always richer in hope & poorer in  pocket for my foibles.
Title: Re: OSTK - Overstock.com
Post by: Parsad on July 19, 2012, 04:12:26 PM
yea, i go way back with overstock. as more of a buy & holder than a trader i've got what can be charitably called a checkered history with ostk as an investment over the yrs.

patrick may be a dr of philosopy with a major in the taoist/buddhist disciplines but at heart he's a very emotional, gut-feel, shoot from the hip kind of guy. when he's had a good qtr or 2 of favorable comps & the wind at his back he tends to go off the rails & swing for the fences, eschewing the smaller, more measured incremental gains that take deeper root in more fertile ground & sow the seeds for future solid compounded growth.
that said, i seem to have a soft spot in my heart (as well in my head!) for the the good dr & ostk, and am a perennial fan, always richer in hope & poorer in  pocket for my foibles.


That's about as good as anyone can explain Overstock and Byrne!  Brilliant.  Cheers!
Title: Re: OSTK - Overstock.com
Post by: dcollon on August 04, 2012, 07:22:04 AM
The Naked Truth?  See attached from Barrons
Title: Re: OSTK - Overstock.com
Post by: hellsten on August 04, 2012, 02:39:34 PM
Thanks for posting. Gary Weiss has always had a lot to say about Overstock. To me all he writes is FUD. This article is no different. This quote from Arthur Conan Doyle gives you a clue of what I think of Gary's article:
Quote
I consider that a man's brain originally is like a little empty attic, and you have to stock it with such furniture as you choose. A fool takes in all the lumber of every sort that he comes across, so that the knowledge which might be useful to him gets crowded out, or at best is jumbled up with a lot of other things, so that he has a difficulty in laying his hands upon it. Now the skillful workman is very careful indeed as to what he takes into his brain-attic. He will have nothing but the tools which may help him in doing his work, but of these he has a large assortment, and all in the most perfect order. It is a mistake to think that that little room has elastic walls and can distend to any extent. Depend upon it there comes a time when for every addition of knowledge you forget something that you knew before. It is of the highest importance, therefore, not to have useless facts elbowing out the useful ones.

Perhaps I'm biased, like Gary. Either way, what Gary writes is FUD sprinkled with empty words:
Quote
A further price decline would aid Overstock's adversaries

Overstock is up 70% from its lows.
Title: Re: OSTK - Overstock.com
Post by: hellsten on August 10, 2012, 06:39:55 AM
Short interest is rising fast. Faster than the stock :o

30-50 days to cover:
http://www.nasdaq.com/symbol/ostk/short-interest

Wonder why. The latest news from OSTK has been positive.
Title: Re: OSTK - Overstock.com
Post by: Parsad on August 10, 2012, 10:35:50 AM
Short interest is rising fast. Faster than the stock :o

30-50 days to cover:
http://www.nasdaq.com/symbol/ostk/short-interest

Wonder why. The latest news from OSTK has been positive.

Have no clue where these shares are coming from.  That's pretty much 45% of the available float.  If they have a profitable 3rd quarter, which looks very likely, the shorts are going to get the crap squeezed out of them, as the 4th quarter is usually profitable.  An entire year of profits at Overstock would certainly kill alot of arguments around the business' viability.  Cheers!
Title: Re: OSTK - Overstock.com
Post by: lessthaniv on August 10, 2012, 11:52:50 AM
no wonder shareholders were asking for certs.
Title: Re: OSTK - Overstock.com
Post by: hellsten on August 16, 2012, 01:02:14 PM
http://redeye.firstround.com/2010/03/some-more-thoughts-on-innovation-in-ecommerce.html:
Quote
…of the top 15 most trafficked eCommerce websites today, just one of them did not exist back in 1999 (NewEgg - which launched in 2001).  Which means that over 90% of the top eCommerce websites are over 12 years old!  That is pretty remarkable to me -- and reflects an amazing lack of external innovation (and disruption).   

Quote
if you compare today's top 15 list of eCommerce websites to this list from 2005, you'll see it's almost identical.  So not only have almost all the top eCommerce sites existed for 12 years -- there has been virtually no dislocation among the leaders.

Via http://cdixon.org/2012/08/15/e-commerce-startups/
Title: Re: OSTK - Overstock.com
Post by: ERICOPOLY on August 16, 2012, 04:09:54 PM
Here is where the shares are coming from (without naked short selling thrown in):

a shareholder is "long" and his broker lends the share to short #1
the valid share is sold by short #1 and delivered to a new long shareholder
the new long shareholder gets the share delivered and his broker lends it to short #2
short #2 sells it and it is delivered to a new long shareholder
the new long shareholder gets the share delivered and his broker lends it to short #3
short #3 sells it and it gets delivered to a new long shareholder.
the new long shareholder gets the share delivered and his broker lends it to short #4
etc...
etc...
etc...
Title: Re: OSTK - Overstock.com
Post by: Liberty on August 16, 2012, 04:16:10 PM
Here is where the shares are coming from (without naked short selling thrown in):

a shareholder is "long" and his broker lends the share to short #1
the valid share is sold by short #1 and delivered to a new long shareholder
the new long shareholder gets the share delivered and his broker lends it to short #2
short #2 sells it and it is delivered to a new long shareholder
the new long shareholder gets the share delivered and his broker lends it to short #3
short #3 sells it and it gets delivered to a new long shareholder.
the new long shareholder gets the share delivered and his broker lends it to short #4
etc...
etc...
etc...

Interesting. It's the first time I think about it this way... So there's no limits to how many times the same share can be recycled? In theory, couldn't you have more shares sold short than the entire number of outstanding shares? Kind of crazy.
Title: Re: OSTK - Overstock.com
Post by: hellsten on September 25, 2012, 07:25:26 AM
"Desperate Measures At Overstock.com" by BO'hara:
http://seekingalpha.com/article/885201-desperate-measures-at-overstock-com

Quote
Patrick Byrne, Overstock's CEO, is a fisherman lost at sea and dying of thirst. He has tried every survival trick in the book, but he has reached the end of his rope.

Quote
As one of what appears to be hundreds of vendors buried deep within Sears.com, how is Overstock going to derive significant revenues from this relationship? Well, Sears.com does a lot of business, and some of it will trickle down to Overstock. How much? Your guess is as good as mine, but management is rumored to be talking up "six or seven figures" in revenue from this relationship.

Quote
If Overstock's dramatic share price appreciation has anything to do with its Sears partnership (or speculation about other partners) it is a fairly large misread by the market. The market is overestimating the returns this business can bring while failing to recognize the risks inherent in the new strategy. The market also seems to be ignoring the declining popularity of Overstock's web site. Overstock is throwing in the towel on its brand which will ultimately have investors throwing in the towel on its stock.

Quote
Another theory regarding OSTK's rapid ascent has to do with the fact that the company isn't collecting sales taxes from customers in many of the states where Amazon and others are being forced to do so. I don't think this is a big factor.

This is his second article, both have been about OSTK. He's followed by Sam Antar on Seeking Alpha…

Maybe the real reason behind the 100% rise in OSTK's share price is a short squeeze?
Title: Re: OSTK - Overstock.com
Post by: Parsad on September 25, 2012, 05:19:39 PM
I don't pay any attention to what others say.  The guy is short Overstock, yet the stock has risen nearly 100% since he began shorting.  There are always detractors to good ideas...because they have a hard time distinguishing between a good/bad business and price/value. 

The logical argument is always Overstock is not as good a business as Amazon or Ebay, so why would you invest?  Because at some point it gets cheap enough, even if it isn't as good a business, where there is significant value that can be realized.  This is what happened when the shorts were squeezing Fairfax.  That Fairfax was not as good an insurer as Berkshire...so what!  Or that BAC has huge litigation issues and loan losses...well at some price who gives a rat's ass, as long as the business can settle litigation and provision for losses from existing cash flows...and is sellling well under tangible book. 

You are watching it unfold at Dell now too.  Dell's business is inferior to IBM's and tablets are dominating laptops or desktops as the argument goes...our Apple fiends are well versed in this line of thought.  Well that's completely true, but at some point the existing discounted cash flows (even if their formerly dominant lines of business are declining) become cheaper than the market price of the company.  It's not rocket science, but the logical (if you can call it that) reasoning that average investor's tend to apply is that the business is of lesser quality or that the model is outdated.  It just doesn't matter if the company is cheap enough and their cash flows survive longer than the assumptions you've implemented.

One of my close friends and a very good investment manager told me I'm going to take it up the butt with Dell...and that was the PG/clean version.   ;D  But I don't care what he thinks, just like I won't be persuaded by arguments from anyone else...the cash flows are robust enough and solid enough, where frankly, investors are wrong at these prices.  I think Dell has 50% upside in the short-term and over 100% upside over two years.  We'll see what happens in a year or two...I may very well be eating my words...but I've done the analysis, and I cannot veer away from the logical investment framework that is telling me that the company is dirt cheap.  Cheers!   
Title: Re: OSTK - Overstock.com
Post by: txlaw on September 25, 2012, 07:45:08 PM
I don't pay any attention to what others say.  The guy is short Overstock, yet the stock has risen nearly 100% since he began shorting.  There are always detractors to good ideas...because they have a hard time distinguishing between a good/bad business and price/value. 

The logical argument is always Overstock is not as good a business as Amazon or Ebay, so why would you invest?  Because at some point it gets cheap enough, even if it isn't as good a business, where there is significant value that can be realized.  This is what happened when the shorts were squeezing Fairfax.  That Fairfax was not as good an insurer as Berkshire...so what!  Or that BAC has huge litigation issues and loan losses...well at some price who gives a rat's ass, as long as the business can settle litigation and provision for losses from existing cash flows...and is sellling well under tangible book. 

You are watching it unfold at Dell now too.  Dell's business is inferior to IBM's and tablets are dominating laptops or desktops as the argument goes...our Apple fiends are well versed in this line of thought.  Well that's completely true, but at some point the existing discounted cash flows (even if their formerly dominant lines of business are declining) become cheaper than the market price of the company.  It's not rocket science, but the logical (if you can call it that) reasoning that average investor's tend to apply is that the business is of lesser quality or that the model is outdated.  It just doesn't matter if the company is cheap enough and their cash flows survive longer than the assumptions you've implemented.

One of my close friends and a very good investment manager told me I'm going to take it up the butt with Dell...and that was the PG/clean version.   ;D  But I don't care what he thinks, just like I won't be persuaded by arguments from anyone else...the cash flows are robust enough and solid enough, where frankly, investors are wrong at these prices.  I think Dell has 50% upside in the short-term and over 100% upside over two years.  We'll see what happens in a year or two...I may very well be eating my words...but I've done the analysis, and I cannot veer away from the logical investment framework that is telling me that the company is dirt cheap.  Cheers!   

I'm with you on DELL, man.  We'll just see whether or not we're right a couple years from now.

In the mean time, we should ignore the crowd.
Title: Re: OSTK - Overstock.com
Post by: hellsten on September 26, 2012, 10:03:31 AM
I don't pay any attention to what others say.  The guy is short Overstock, yet the stock has risen nearly 100% since he began shorting.  There are always detractors to good ideas...because they have a hard time distinguishing between a good/bad business and price/value. 

The logical argument is always Overstock is not as good a business as Amazon or Ebay, so why would you invest?  Because at some point it gets cheap enough, even if it isn't as good a business, where there is significant value that can be realized.  This is what happened when the shorts were squeezing Fairfax.  That Fairfax was not as good an insurer as Berkshire...so what!  Or that BAC has huge litigation issues and loan losses...well at some price who gives a rat's ass, as long as the business can settle litigation and provision for losses from existing cash flows...and is sellling well under tangible book.

I'm sure most investors that look at OSTK read the same material I read. What they see is a crazy CEO and a bad business model. I see a smart and persistent CEO, and a quite good business model. The price when I bought OSTK was very attractive and it still is if you think Overstock can grow.

Anyway, in 5-10 years we'll know who was right. Hope I have the mental strength to own OSTK that long as it's probably going to be a bumpy ride ;D

Short interest is still high, see attached graph:
http://www.nasdaq.com/symbol/ostk/short-interest
Title: Re: OSTK - Overstock.com
Post by: Parsad on October 25, 2012, 02:55:40 PM
Short interest is rising fast. Faster than the stock :o

30-50 days to cover:
http://www.nasdaq.com/symbol/ostk/short-interest

Wonder why. The latest news from OSTK has been positive.

Have no clue where these shares are coming from.  That's pretty much 45% of the available float.  If they have a profitable 3rd quarter, which looks very likely, the shorts are going to get the crap squeezed out of them, as the 4th quarter is usually profitable.  An entire year of profits at Overstock would certainly kill alot of arguments around the business' viability.  Cheers!

Way to go Overstock!  We'll see a full year of profits, and probably about $1.05-1.10 in earnings for the entire year. 

Thanks to everyone at Overstock.com and the board of directors for their efforts.  Head down, focus and keep up the great work!  Cheers!
Title: Re: OSTK - Overstock.com
Post by: alertmeipp on October 25, 2012, 03:37:49 PM
damn it, and I sold ostk to buy more atpg.

this year so far be concluded as WTF is wrong with me.
Title: Re: OSTK - Overstock.com
Post by: valuecfa on October 26, 2012, 11:29:13 AM
Loving it!

I bet Patrick is walking around with a big smile today... a little vindication against the shorts.
Title: Re: OSTK - Overstock.com
Post by: Parsad on October 26, 2012, 12:00:38 PM
Loving it!

I bet Patrick is walking around with a big smile today... a little vindication against the shorts.

The ironic thing is that he got his vindication when he stopped worrying about the shorts and focused on the business.  It's kind of what Glenn Suroweic and I tried to hammer into them in the conference call early this year, and when I spoke to Sam Mitchell in Toronto in April.  Do the same thing Fairfax did...head down and focus on the company first...worry about the shorts second.  There was no reason why this business was not profitable on an annual basis, but they were just spending too much on litigation and not streamlining the business.  I'm glad to see them screw the shorts while restoring the operating business!  Cheers!
Title: Re: OSTK - Overstock.com
Post by: valuecfa on October 26, 2012, 03:32:28 PM
Loving it!

I bet Patrick is walking around with a big smile today... a little vindication against the shorts.

The ironic thing is that he got his vindication when he stopped worrying about the shorts and focused on the business. 

I completely agree. You could tell he is very passionate about enlightening the public at large of the alleged illegal activities going on in major financial firms and this seemed to be a distraction from operating his own business.

I like his passion. I just wish more of were directed at Overstock. I give him enormous credit for taking a stand though, especially given the flow back he received.
Title: Re: OSTK - Overstock.com
Post by: hellsten on November 01, 2012, 02:30:11 PM
I noticed Francis Chou sold a few shares of OSTK a few days ago. This article explains why:
http://www.gurufocus.com/news/194103/the-latest-on-overstockcom-and-francis-chous-stake-with-the-online-retailer

Quote
The transaction purpose was outlined in Chou’s SEC filing stating: The transaction was “due to appreciation” and that “the value of investments in securities of the issuer represented over 30%” of the fund’s total investments, as of the date of the transaction. Additionally, the transaction “was effected solely for diversification purposes and more specifically, to reduce the concentration of the fund’s investments in securities…As of the date hereof, [Chou Associates] continues to believe that the subject of class of securities is undervalued and represents an attractive investment opportunity.”

Sanjeev is also mentioned in the article:
Quote
During a Fairfax shareholder dinner in April hosted by Sanjeev Parsad of business-investment firm Corner Market Capital Corp., Chou, who was in attendance with fellow value investor Prem Watsa and several others, was noted giving his insight on his shareholding of Overstock.
Title: Re: OSTK - Overstock.com
Post by: Parsad on November 01, 2012, 02:38:15 PM
I noticed Francis Chou sold a few shares of OSTK a few days ago. This article explains why:
http://www.gurufocus.com/news/194103/the-latest-on-overstockcom-and-francis-chous-stake-with-the-online-retailer

Quote
The transaction purpose was outlined in Chou’s SEC filing stating: The transaction was “due to appreciation” and that “the value of investments in securities of the issuer represented over 30%” of the fund’s total investments, as of the date of the transaction. Additionally, the transaction “was effected solely for diversification purposes and more specifically, to reduce the concentration of the fund’s investments in securities…As of the date hereof, [Chou Associates] continues to believe that the subject of class of securities is undervalued and represents an attractive investment opportunity.”

Sanjeev is also mentioned in the article:
Quote
During a Fairfax shareholder dinner in April hosted by Sanjeev Parsad of business-investment firm Corner Market Capital Corp., Chou, who was in attendance with fellow value investor Prem Watsa and several others, was noted giving his insight on his shareholding of Overstock.

Also mention of NormR and his dinner transcript...they've even got a link to a PDF copy!  Cheers!

In a transcribed summary of the dinner by financial consultant and founder of stock research site, StingyInvestor.com, Norman Rothery first cited Overstock in comments made by Hamblin-Watsa’s Sam Mitchell.

According to Rothery, Mitchell said that Fairfax Financial Holdings’ decision to switch to Overstock was wrong because it “did not stick to its value proposition which was ‘great stuff at low prices,’” by establishing its O brands, and referring to Overstock as one of the firm’s “screw ups from last year.”
Title: Re: OSTK - Overstock.com
Post by: valuecfa on November 02, 2012, 05:27:24 PM
Well i am disappointed by a recent Overstock.com customer experience.

I tried to help next quarter's numbers by buying a travel book for a country i am visiting from Overstock, instead of the usual Amazon. Overstock actually beat every competitor's price i could find by 1%(that was a good sign).

 I placed the order on October 29th. I leave on November 10th for a several week journey. I did the live chat with an overstock rep and they said standard shipping of books can take up to 3 weeks! I must have missed that if they disclosed it during the checkout process. The customer rep was nice enough, but said that he can not cancel the order, b/c it has been "processed", but not shipped yet. Anyway just venting....since the book will be useless to me if it arrives after Nov 9th, which the rep hinted seemed likely, especially since they are having additional shipping delays due to the hurricane. Not the best O.co experience.

Nevertheless, i will continue to hold my shares  :-\
Title: Re: OSTK - Overstock.com
Post by: DCG on November 03, 2012, 07:56:54 AM
Well i am disappointed by a recent Overstock.com customer experience.

I tried to help next quarter's numbers by buying a travel book for a country i am visiting from Overstock, instead of the usual Amazon. Overstock actually beat every competitor's price i could find by 1%(that was a good sign).

 I placed the order on October 29th. I leave on November 10th for a several week journey. I did the live chat with an overstock rep and they said standard shipping of books can take up to 3 weeks! I must have missed that if they disclosed it during the checkout process. The customer rep was nice enough, but said that he can not cancel the order, b/c it has been "processed", but not shipped yet. Anyway just venting....since the book will be useless to me if it arrives after Nov 9th, which the rep hinted seemed likely, especially since they are having additional shipping delays due to the hurricane. Not the best O.co experience.

Nevertheless, i will continue to hold my shares  :-\

Any delivery time of 3 weeks means it most likely takes them 2 weeks just to ship your order. Unimpressive, especially considering that when there have been times I've ordered from Amazon around 9pm and the order was still shipped that day.
Title: Re: OSTK - Overstock.com
Post by: bookie71 on November 03, 2012, 10:19:13 AM
You should live in Alaska, sometimes priority mail takes 3 weeks from the lower 48.  Other times it might be 2-3 days, depends on whether it comes via highway or air (P.O.'s choice)
Title: Re: OSTK - Overstock.com
Post by: hellsten on December 18, 2012, 12:50:16 PM
Interesting developments at OSTK:
http://www.wired.com/wiredenterprise/2012/12/mahout/

Quote
We’re saving $2 million a year with Mahout, and that never would have happened if not for the sort of experimental stuff we’re doing in the labs,” says Bagley. “We’re discovering things that can then have benefit across the company.

http://seekingalpha.com/article/1070741-has-overstock-com-turned-around

Quote
Byrne has been divesting his own holdings, selling 263,000 shares at the first of this month. The largest shareholder is now Canadian mutual fund manager Francis M.S. Chou, who holds 2.3 million shares. Chou and the other institutional holders might be ready to cash out, and if they do you'll make a fat profit. Even if they don't, you're less likely to get "Byrned" now than you were.

http://www.internetretailer.com/2012/11/29/small-online-retailers-rack-big-holiday-sales

Quote
Of the 25 large retailers it tracked from Black Friday to Cyber Monday, J.C. Penney connected customers to live agents by phone the fastest, in just 22 seconds on average compared with an average wait time of four minutes and 27 seconds for all the retailers over the four-day period.  Overstock.com Inc.’s live chat agents responded fastest, in 22 second on average.

Behind the scenes at Overstock.com:
http://www.ksl.com/?nid=148&sid=23267030

Title: Re: OSTK - Overstock.com
Post by: Parsad on December 18, 2012, 04:48:34 PM
That guy got it wrong.  Byrne still owns a ton of shares through his investment company...White Plains Investments.  Cheers! 
Title: Re: OSTK - Overstock.com
Post by: ASTA on January 03, 2013, 09:03:25 AM
I am wondering what others are doing with this stock?
As I am sitting on 170% gains it became 20% of my portfolio but sold half before at 15.93.
As the stock is climbing again to the 15 mark what should I do?
My latest idea is to wait for the 4th quarter results.
Title: Re: OSTK - Overstock.com
Post by: Parsad on January 03, 2013, 09:58:59 AM
I am wondering what others are doing with this stock?
As I am sitting on 170% gains it became 20% of my portfolio but sold half before at 15.93.
As the stock is climbing again to the 15 mark what should I do?
My latest idea is to wait for the 4th quarter results.

You can thin it out a bit if you want, but the 4th Q results (not unlike BAC) should be pretty good.  I expect that OSTK made close to a dollar a share in the 4th Q.  Probably close to $1.15-1.25 for the year.  So if they can keep it going, it's not overvalued.  Cheers!
Title: Re: OSTK - Overstock.com
Post by: hellsten on January 03, 2013, 10:05:51 AM
I am wondering what others are doing with this stock?
As I am sitting on 170% gains it became 20% of my portfolio but sold half before at 15.93.
As the stock is climbing again to the 15 mark what should I do?
My latest idea is to wait for the 4th quarter results.

I'm in a similar position. I have not sold any shares so far. I guess the 4th quarter results will be good, but I don't know how the market will react to it:
Quote
President Jonathan Johnson wouldn't venture a figure, but he says Q4 sales are tracking higher than Q4 2011. Overstock had three straight quarters of year-over-year revenue declines before notching a 2% rise in Q2 and 7% rise in Q3. He says Q4 is on track for another upswing in that trend.
"We've had a good quarter," Johnson told IBD.
With the economy, fiscal cliff and people nervous about their personal budgets, shoppers are always looking for deals, and "Overstock has always been the place to find things at the lowest price," he said.
Overstock's hottest sellers this year include tablet computers and furniture. And one of the most popular stuffed animals in U.S. history is making a comeback, Johnson says.
"On the toy front, Furby was a big seller this year," he said.
http://news.investors.com/technology/122412-638216-some-online-retailers-see-big-season.htm

I'm happy to hold on to OSTK. I have my seat belt on :)
Title: Re: OSTK - Overstock.com
Post by: valuecfa on January 03, 2013, 10:23:31 AM
Still holding all shares. Even after the run up, i believe the stock still has a lot of upside optionality over a short time period.
Title: Re: OSTK - Overstock.com
Post by: ASTA on January 03, 2013, 10:32:49 AM
Thanks for the replay.
Well Parsad I will buy you a expensive wine when I come to the Fairfax annual meeting this year or next.
Hellsten I think I am going to jump in the car with you and buckle up hope the car has airbags and good torque up ;D
And I am sure we can maybe rent a mini bus for the forum members how are on this little adventure.   
Title: Re: OSTK - Overstock.com
Post by: hellsten on January 24, 2013, 06:39:46 AM
Overstock.com Reports FY and Q4 2012 Results:
http://investors.overstock.com/phoenix.zhtml?c=131091&p=irol-newsArticle&ID=1777664&highlight=

Quote
Key FY 2012 metrics (comparison to FY 2011):
Revenue:  $1,099M vs. $1,054M (4% increase);
Gross margin: 18.1% vs. 17.0% (110 basis point increase);
Gross profit: $198.4M vs. $179.1M (11% increase);
Sales and marketing expense: $63.5M vs. $61.8M (3% increase);
Contribution (non-GAAP measure): $135.0M vs. $117.3M (15% increase);
G&A/Technology expense: $122.7M vs. $134.8M (9% decrease);
Net income (loss): $14.7M vs. $(19.4)M ($34.1M increase); and
Diluted EPS: $0.62/share vs. $(0.84)/share ($1.46 increase).

Key Q4 2012 metrics (comparison to Q4 2011):
Revenue:  $342.0M vs. $314.1M (9% increase);
Gross margin: 17.9% vs. 16.2% (170 basis point increase);
Gross profit: $61.2M vs. $50.9M (20% increase);
Sales and marketing expense: $20.6M vs. $18.9M (9% increase);
Contribution (non-GAAP measure): $40.6M vs. $32.0M (27% increase);
G&A/Technology expense: $32.7M vs. $34.1M (4% decrease);
Net income (loss): $8.8M vs. $(3.4)M ($12.2M increase); and
Diluted EPS: $0.37/share vs. $(0.15)/share ($0.52 increase).
Title: Re: OSTK - Overstock.com
Post by: Ross812 on January 24, 2013, 06:53:55 AM
Great quarter. I'm glad Chou has made some money on this one.
Title: Re: OSTK - Overstock.com
Post by: lessthaniv on January 24, 2013, 07:30:47 AM
 ;D
Title: Re: OSTK - Overstock.com
Post by: Parsad on January 24, 2013, 10:40:15 AM
Great year...but I was less impressed with the 4th quarter where I thought they would have made more.  Looks like they increased marketing costs in the 4th.  Markets thought different I guess.  Cheers!
 
Title: Re: OSTK - Overstock.com
Post by: lessthaniv on January 24, 2013, 11:35:12 AM
yes, i'm anxious to see some topline growth show up. but i'm happy to see a full year of profitibily throughout each quarter.
i like the direction.
Title: Re: OSTK - Overstock.com
Post by: hellsten on January 24, 2013, 12:05:41 PM
Link to presentation covered in webcast:
http://phx.corporate-ir.net/External.File?t=1&item=VHlwZT0yfFBhcmVudElEPTQ4ODg1NTB8Q2hpbGRJRD00OTExMTM=

Quote
Overstock is well-positioned to weather any national or global financial crisis in 2013 because the company has planned for many scenarios and because of ongoing efforts to make its global supply chain increasingly nimble, CEO Patrick Byrne told analysts on the company’s year-end earnings call. “We’ve spent the past 18 months making the supply chain more agile and we see that as a competitive advantage,” Byrne told Wall Street analysts. “As for any financial changes nationally or globally we have files in the file drawer ready for any number of scenarios.”

Going forward Overstock also sees more competition coming from store-based retailers, particularly chains that have what Byrne calls a good “clicks-and-bricks” strategy. “The big chains are getting better at this and they have an advantage over the pure-plays with their clicks-and-bricks model,” Byrne told analysts. “The store retailers are the competitive segment to watch.”

Chain store retailers can take advantage of foot traffic to stores to market their e-commerce brand—a distinct advantage over web-only merchants, Byrne says.
http://www.internetretailer.com/2013/01/24/overstock-boosts-sales-and-profits

I sold half my position today. The position became too big and the investment thesis has played out pretty much as I wanted. I would have liked to see a big short squeeze.
Title: Re: OSTK - Overstock.com
Post by: Parsad on January 24, 2013, 01:41:15 PM
Link to presentation covered in webcast:
http://phx.corporate-ir.net/External.File?t=1&item=VHlwZT0yfFBhcmVudElEPTQ4ODg1NTB8Q2hpbGRJRD00OTExMTM=

Quote
Overstock is well-positioned to weather any national or global financial crisis in 2013 because the company has planned for many scenarios and because of ongoing efforts to make its global supply chain increasingly nimble, CEO Patrick Byrne told analysts on the company’s year-end earnings call. “We’ve spent the past 18 months making the supply chain more agile and we see that as a competitive advantage,” Byrne told Wall Street analysts. “As for any financial changes nationally or globally we have files in the file drawer ready for any number of scenarios.”

Going forward Overstock also sees more competition coming from store-based retailers, particularly chains that have what Byrne calls a good “clicks-and-bricks” strategy. “The big chains are getting better at this and they have an advantage over the pure-plays with their clicks-and-bricks model,” Byrne told analysts. “The store retailers are the competitive segment to watch.”

Chain store retailers can take advantage of foot traffic to stores to market their e-commerce brand—a distinct advantage over web-only merchants, Byrne says.
http://www.internetretailer.com/2013/01/24/overstock-boosts-sales-and-profits

I sold half my position today. The position became too big and the investment thesis has played out pretty much as I wanted. I would have liked to see a big short squeeze.

Good for you!  I would have liked to see the squeeze too.   ;D  Cheers!
Title: Re: OSTK - Overstock.com
Post by: ASTA on January 25, 2013, 01:11:04 AM
Well I got scared and sold my other half at 200% return yesterday that's enough of a return ;D
Now have 27% cash and more coming with dell soon as its 10%.
The question now is what to do with 38% cash in the coming months.
Title: Re: OSTK - Overstock.com
Post by: Parsad on January 25, 2013, 07:49:11 AM
Well I got scared and sold my other half at 200% return yesterday that's enough of a return ;D
Now have 27% cash and more coming with dell soon as its 10%.
The question now is what to do with 38% cash in the coming months.

Nibble on Apple and sit on the rest until something else comes your way.  We are sitting on 40% cash right now too!  Cheers!
Title: Re: OSTK - Overstock.com
Post by: ASTA on January 25, 2013, 09:11:54 AM
Thanks again for this little stock gift. Others helped as well Chou and MOI.
Well regarding the cash pile think that msft on a dip also sounds good we will see.
Cheers 
Title: Re: OSTK - Overstock.com
Post by: hellsten on January 25, 2013, 01:16:17 PM
Thanks again for this little stock gift. Others helped as well Chou and MOI.
Well regarding the cash pile think that msft on a dip also sounds good we will see.
Cheers

Here's some advice from Warren and Charlie on what to do with extra cash:

Quote
I had a lot of money around. I make mistakes when I get cash. Charlie tells me to go to a bar instead. Don’t hang around the office. But I hang around the office and I have money in my pocket, I do something dumb. It happens every time. So I bought this thing. Nobody made me buy it. I now have an 800 number I call every time I think about buying a stock in an airline. I say, “I am Warren and I am an air-aholic.” They try to talk me down, “Keep talking don’t do anything rash.” Finally I got over it. But I bought it. And it looked like we would lose all our money in it. And we came very close to losing all our money in it.   You can say we deserved to lose our money it.
http://www.buffettfaq.com/

Sounds like we should go to a bar and avoid airline stocks.
Title: Re: OSTK - Overstock.com
Post by: ASTA on January 26, 2013, 02:50:27 AM
Hellsten what I really need is a toll free phone number to talk me out of hpq and nok as I lost more then 60% on both ;D
Well have a empty whisky bottle on my desk so no bar for me something else perhaps go to gym and get my sixpack back.     
Title: Re: OSTK - Overstock.com
Post by: valuecfa on January 29, 2013, 04:44:11 PM
Noticed Chou has been doing some selling in past few trading days...

I got the time to read the conference call transcript, just now.  This stood out:

Justin Ruiss  — Sidoti & Company - Analyst

 Very nice. My last question is - now that you have paid off the debt, and you are debt free, any ideas with cash what that would be used for?

 Patrick Byrne  — Overstock.com - Chairman, CEO

At these prices I would start buying-in stock. That would be my preference, Jonathan, Steve Chesnut, what do you say. Not to that, but what would you do with more cash?

Steve Chesnut  — Overstock.com - SVP, Finance and Risk Management

Clearly the stock price where it is provides an opportunity. I think we also see opportunities to continue to whether it is technology enhancing the business as we have continue to invest, fundamentally investing in the business as we know it today to keep extending the reach.

Jonathan Johnson  — Overstock.com - President

I agree with that. I think we can spend our cash within the business in ways that will have nice ROI, and we always have projects on our list that we want to get done and not having to service debt will help us do that.
Title: Re: OSTK - Overstock.com
Post by: Parsad on February 12, 2013, 10:50:20 AM
Patrick takes a temporary leave of absence to deal with some cardiac issues.  Cheers!

http://finance.yahoo.com/news/overstock-com-ceo-taking-temporary-140100597.html
Title: Re: OSTK - Overstock.com
Post by: wellmont on February 12, 2013, 12:31:26 PM
Thanks again for this little stock gift. Others helped as well Chou and MOI.
Well regarding the cash pile think that msft on a dip also sounds good we will see.
Cheers

Here's some advice from Warren and Charlie on what to do with extra cash:

Quote
I had a lot of money around. I make mistakes when I get cash. Charlie tells me to go to a bar instead. Don’t hang around the office. But I hang around the office and I have money in my pocket, I do something dumb. It happens every time. So I bought this thing. Nobody made me buy it. I now have an 800 number I call every time I think about buying a stock in an airline. I say, “I am Warren and I am an air-aholic.” They try to talk me down, “Keep talking don’t do anything rash.” Finally I got over it. But I bought it. And it looked like we would lose all our money in it. And we came very close to losing all our money in it.   You can say we deserved to lose our money it.
http://www.buffettfaq.com/

Sounds like we should go to a bar and avoid airline stocks.

oh warren. the dirty little secret is he made a lot of money in US Air. :)
Title: Re: OSTK - Overstock.com
Post by: mcliu on February 15, 2013, 04:39:36 PM
I'm relatively new to this company compared to you guys, would be very helpful to get your thoughts on some of the questions I have.

1) What's the business model like? I noticed Byrne saying that OSTK shuffles more electrons than goods.. Does that mean they're more commission based connecting buyers to sellers that fulfill orders? If that's the case, why do they maintain a warehouse and inventory? Or would they first purchase overstocked products from the sellers, store them in their warehouse, and then re-ship the products?

2) What do you guys think of operating efficiency/competitive advantage? I was looking at the clip of their warehouse posted earlier and it seems like they're still using runners. I thought most large distribution centres have switched to robots (Kiva), etc?

3) Are they almost more of a logistic company compared to a true retailer/distributor?

Seems like the game is getting tougher as Amazon's keeping margins down while Brick-and-Mortars start to catch up in the online game.. Can we continue to see operational improvements at the company?
Title: Re: OSTK - Overstock.com
Post by: mscotten on February 27, 2013, 08:13:47 PM
I noticed that Steve Chestnut and Tim Dilworth have both left Overstock as part of the management shuffle announced earlier in the week.

On recent calls, Patrick was appeared to be very high on both these executives. Does anyone have any insight into why they left?

I hope this isn't the start of another bad year which inevitably seems to follow a good year at Overstock.
Title: Re: OSTK - Overstock.com
Post by: Parsad on February 27, 2013, 08:49:21 PM
I noticed that Steve Chestnut and Tim Dilworth have both left Overstock as part of the management shuffle announced earlier in the week.

On recent calls, Patrick was appeared to be very high on both these executives. Does anyone have any insight into why they left?

I hope this isn't the start of another bad year which inevitably seems to follow a good year at Overstock.

Both Sam Mitchell and Jonathan Johnson will be in Toronto, and both will be at our dinner, so someone can ask them this question.  So far, the changes they have made in the last year have been great, so this may be continued improvement...we don't know.  Cheers!
Title: Re: OSTK - Overstock.com
Post by: Parsad on April 15, 2013, 11:48:47 AM
Patrick Byrne returns to Overstock.com after some cardiac issues possibly related to cancer treatments earlier in his life:

http://finance.yahoo.com/news/patrick-byrne-returns-helm-overstock-130000915.html

I'm glad Jonathan will be added to the board.  Good to see him at our dinner this year as well!  Cheers!
Title: Re: OSTK - Overstock.com
Post by: hellsten on April 18, 2013, 06:36:57 AM
Q1 2013 results are out:
http://investors.overstock.com/phoenix.zhtml?c=131091&p=irol-newsArticle&ID=1808187&highlight=

Quote
Key Q1 2013 metrics (comparison to Q1 2012):
Revenue: $312.0M vs. $262.4M (19% increase);
Gross margin: 18.9% vs. 18.1% (80 basis point increase);
Gross profit: $58.9M vs. $47.5M (24% increase);
Sales and marketing expense: $18.7M vs. $14.5M (29% increase);
Contribution (non-GAAP measure): $40.2M vs. $33.0M (22% increase);
G&A/Technology expense: $33.2M vs. $30.5M (9% increase);
Net income: $7.7M vs. $2.7M ($5.0M increase); and
Diluted EPS: $0.32/share vs. $0.12/share ($0.20/share increase).

Good to have Patrick back.
Title: Re: OSTK - Overstock.com
Post by: lessthaniv on April 24, 2013, 08:29:33 AM
Francis trimmed 132,000 shares. Not huge.
Title: Re: OSTK - Overstock.com
Post by: lessthaniv on May 03, 2013, 08:40:39 AM
Francis keeps trimming.

Anyone with access to a Bloomberg terminal that can tell me what the current short interest is?

Thanks in advance.
Title: Re: OSTK - Overstock.com
Post by: valueinvesting101 on May 03, 2013, 09:27:19 AM
Short interest = 3.3M

% of float = 20.91%
Title: Re: OSTK - Overstock.com
Post by: lessthaniv on May 03, 2013, 12:50:04 PM
Short interest = 3.3M

% of float = 20.91%

Does that come from the Nasdaq site or is that up to the day?
Thanks for helping out.
Title: Re: OSTK - Overstock.com
Post by: txlaw on July 30, 2013, 04:42:15 PM
http://gigaom.com/2013/07/30/why-overstock-decided-to-start-a-price-war-with-amazon
Title: Re: OSTK - Overstock.com
Post by: Parsad on July 30, 2013, 07:30:13 PM
Boy, that's a mistake!  They tried this back in 2003...how did that go?  You can see the old video on YouTube where Patrick talks to CNBC about undercutting Amazon's book business. 

I don't know why they want to take on the goliath.  Did Costco take on Walmart or stick to a niche area?  See's isn't going to hunt down Hershey's.  You can make a great little business, with a cult following, in a very specific niche, and make your shareholders and employees rich over time.  Or you can possibly go out of business because you decide to take on the incumbent leader.  Cheers!
Title: Re: OSTK - Overstock.com
Post by: fareastwarriors on August 20, 2013, 10:23:10 AM
http://www.digitalbookworld.com/2013/overstock-continues-to-wage-pricing-war-with-amazon-with-new-discounts/ (http://www.digitalbookworld.com/2013/overstock-continues-to-wage-pricing-war-with-amazon-with-new-discounts/)


Overstock Continues to Wage ‘Pricing War’ With Amazon With New Discounts
Title: Re: OSTK - Overstock.com
Post by: hellsten on August 20, 2013, 11:59:58 AM
Quote
Overstock.com intends to begin rolling out a new international program by mid-October, and hopes to introduce software, logistics systems, and e-commerce businesses for over 100 countries in six to nine months, Byrne said. "We think there are some places that have very little e-commerce now in their native languages and will be good opportunities for us," the CEO told The Fly in an interview yesterday. "We figured out a supply chain and website that works for international operations," he added. Overstock currently has product descriptions in eight different languages and offers shipping to foreign countries on its main website, but only about 2% of its revenue comes from abroad, Byrne noted.

Quote
Overstock is growing more than 15%, while the ecommerce sector as a whole is expanding at a 15% pace, so Overstock should be gaining market share, Byrne added.

Quote
Overstock recently ended a promotion in which the company sold books for at least 10% below Amazon’s prices. The promotion generated a "huge spike in traffic," but would have cost Overstock $3 million per year to maintain, Byrne stated, adding that he estimates the resulting price war would have cost Amazon $500 million annually. "It was a close call," but Overstock decided not to take that route, Byrne indicated.

http://www.theflyonthewall.com/permalinks/entry.php/OSTK;AMZN;EBAY;GOOGid1877377/OSTK;AMZN;EBAY;GOOG-Overstockcom-targets-major-international-presence-by-mid
Title: Re: OSTK - Overstock.com
Post by: Parsad on August 20, 2013, 03:51:58 PM
Quote
Overstock.com intends to begin rolling out a new international program by mid-October, and hopes to introduce software, logistics systems, and e-commerce businesses for over 100 countries in six to nine months, Byrne said. "We think there are some places that have very little e-commerce now in their native languages and will be good opportunities for us," the CEO told The Fly in an interview yesterday. "We figured out a supply chain and website that works for international operations," he added. Overstock currently has product descriptions in eight different languages and offers shipping to foreign countries on its main website, but only about 2% of its revenue comes from abroad, Byrne noted.

Quote
Overstock is growing more than 15%, while the ecommerce sector as a whole is expanding at a 15% pace, so Overstock should be gaining market share, Byrne added.

Quote
Overstock recently ended a promotion in which the company sold books for at least 10% below Amazon’s prices. The promotion generated a "huge spike in traffic," but would have cost Overstock $3 million per year to maintain, Byrne stated, adding that he estimates the resulting price war would have cost Amazon $500 million annually. "It was a close call," but Overstock decided not to take that route, Byrne indicated.

http://www.theflyonthewall.com/permalinks/entry.php/OSTK;AMZN;EBAY;GOOGid1877377/OSTK;AMZN;EBAY;GOOG-Overstockcom-targets-major-international-presence-by-mid

They should just let me run the company!   ;D  Cheers!
Title: Re: OSTK - Overstock.com
Post by: lessthaniv on August 20, 2013, 04:14:16 PM
At least he came to his senses!
Title: Re: OSTK - Overstock.com
Post by: hellsten on October 17, 2013, 06:26:57 AM
Q3 results are out:
http://investors.overstock.com/phoenix.zhtml?c=131091&p=irol-newsArticle&ID=1865548&highlight=

Quote
Key Q3 2013 metrics (comparison to Q3 2012):
Revenue: $301.4M vs. $255.4M (18% increase);
Gross margin: 19.6% vs. 18.2% (140 basis point increase);
Gross profit: $59.2M vs. $46.5M (27% increase);
Sales and marketing expense: $22.5M vs. $14.9M (51% increase);
Contribution (non-GAAP measure): $36.7M vs. $31.6M (16% increase);
Technology and G&A expense: $33.2M vs. $29.9M (11% increase);
Net income: $3.5M vs. $2.7M (31% increase); and
Diluted EPS: $0.14/share vs. $0.11/share ($0.03/share improvement; 27% increase).

I guess the result is OK, but market is unhappy and OSTK is down 8% pre-market…
Title: Re: OSTK - Overstock.com
Post by: Parsad on October 17, 2013, 07:36:39 AM
Q3 results are out:
http://investors.overstock.com/phoenix.zhtml?c=131091&p=irol-newsArticle&ID=1865548&highlight=

Quote
Key Q3 2013 metrics (comparison to Q3 2012):
Revenue: $301.4M vs. $255.4M (18% increase);
Gross margin: 19.6% vs. 18.2% (140 basis point increase);
Gross profit: $59.2M vs. $46.5M (27% increase);
Sales and marketing expense: $22.5M vs. $14.9M (51% increase);
Contribution (non-GAAP measure): $36.7M vs. $31.6M (16% increase);
Technology and G&A expense: $33.2M vs. $29.9M (11% increase);
Net income: $3.5M vs. $2.7M (31% increase); and
Diluted EPS: $0.14/share vs. $0.11/share ($0.03/share improvement; 27% increase).

I guess the result is OK, but market is unhappy and OSTK is down 8% pre-market…

I think they are unhappy for two reasons...the stock was way ahead of itself and look at that sales/marketing expense line...there's another $5-7M in profit in that line.  I don't know why the big jump, even with the ramp up to Christmas!  Cheers!
Title: Re: OSTK - Overstock.com
Post by: hellsten on October 17, 2013, 08:43:50 AM
Q3 results are out:
http://investors.overstock.com/phoenix.zhtml?c=131091&p=irol-newsArticle&ID=1865548&highlight=

Quote
Key Q3 2013 metrics (comparison to Q3 2012):
Revenue: $301.4M vs. $255.4M (18% increase);
Gross margin: 19.6% vs. 18.2% (140 basis point increase);
Gross profit: $59.2M vs. $46.5M (27% increase);
Sales and marketing expense: $22.5M vs. $14.9M (51% increase);
Contribution (non-GAAP measure): $36.7M vs. $31.6M (16% increase);
Technology and G&A expense: $33.2M vs. $29.9M (11% increase);
Net income: $3.5M vs. $2.7M (31% increase); and
Diluted EPS: $0.14/share vs. $0.11/share ($0.03/share improvement; 27% increase).

I guess the result is OK, but market is unhappy and OSTK is down 8% pre-market…

I think they are unhappy for two reasons...the stock was way ahead of itself and look at that sales/marketing expense line...there's another $5-7M in profit in that line.  I don't know why the big jump, even with the ramp up to Christmas!  Cheers!

Yes, part of the increase (1-2 million?) is from the book promotion campaign. I wonder where the rest comes from, international expansion? Luckily I averaged out a few months ago. Chou Opportunity has sold -87.02%. Short interest is 15%. I would really like to hear what Chou thinks of JCP and SHLD; I guess there's not much to add to what has been discussed on this board.

-18% now :o Mr. Market is back.
Title: Re: OSTK - Overstock.com
Post by: DCG on December 25, 2013, 08:51:47 AM
So I placed separate orders through this crappy company for Christmas gifts over 3 weeks ago. Neither order shipped. Their custom service department of course apparently doesn't even take phone calls. I chatted them and they said they'll email me an answer in 2-3 days. I chatted them again and the guy was arguing with me saying that the orders did ship, when the Fedex tracking info clearly shows they did not. The best resolution they were able to offer me was a $5 store credit (which is useless, since I'll never order from them again) and that they'll contact me in a few days to let me know if they can actually ship these orders.


Awful experience and the last time I'll order from this company.
Title: Re: OSTK - Overstock.com
Post by: DCG on December 28, 2013, 01:12:11 PM
So I placed separate orders through this crappy company for Christmas gifts over 3 weeks ago. Neither order shipped. Their custom service department of course apparently doesn't even take phone calls. I chatted them and they said they'll email me an answer in 2-3 days. I chatted them again and the guy was arguing with me saying that the orders did ship, when the Fedex tracking info clearly shows they did not. The best resolution they were able to offer me was a $5 store credit (which is useless, since I'll never order from them again) and that they'll contact me in a few days to let me know if they can actually ship these orders.


Awful experience and the last time I'll order from this company.

So I finally received 2 emails from overstock (4 days later) saying they can't locate the products I ordered in their warehouse. Then they send another canned-response email a few minutes later saying 'We believe that we have resolved your inquiry. However, if it has not been answered to your satisfaction, you may reopen it within the next 7 days.'. They of course resolved nothing.

Worse shopping experience I've had in a long time. I understand that mistakes happen, but their customer service was pathetic.
Title: Re: OSTK - Overstock.com
Post by: Mephistopheles on December 28, 2013, 04:38:30 PM
So I placed separate orders through this crappy company for Christmas gifts over 3 weeks ago. Neither order shipped. Their custom service department of course apparently doesn't even take phone calls. I chatted them and they said they'll email me an answer in 2-3 days. I chatted them again and the guy was arguing with me saying that the orders did ship, when the Fedex tracking info clearly shows they did not. The best resolution they were able to offer me was a $5 store credit (which is useless, since I'll never order from them again) and that they'll contact me in a few days to let me know if they can actually ship these orders.


Awful experience and the last time I'll order from this company.

So I finally received 2 emails from overstock (4 days later) saying they can't locate the products I ordered in their warehouse. Then they send another canned-response email a few minutes later saying 'We believe that we have resolved your inquiry. However, if it has not been answered to your satisfaction, you may reopen it within the next 7 days.'. They of course resolved nothing.

Worse shopping experience I've had in a long time. I understand that mistakes happen, but their customer service was pathetic.

You should complain on their fb page, they tend to be helpful and responsive there it seems like.
Title: Re: OSTK - Overstock.com
Post by: constructive on February 08, 2014, 02:18:59 PM
Is anyone interested again, since the Q4 results and the plunge from $30 to $20?

I find it interesting that OSTK pre-profitability, and unprofitable retailers like SHLD and JCP, seem to attract much more discussion than OSTK post-profitability.

Certainly there is a huge disconnect between OSTK and AMZN/NILE/ZU ratios.
Title: Re: OSTK - Overstock.com
Post by: OracleofCarolina on February 20, 2014, 07:52:37 PM
http://www.mercurynews.com/business/ci_25195165/overstock-com-slapped-nearly-7-million-fine-false

Why doesn't this surprise me?
Title: Re: OSTK - Overstock.com
Post by: OracleofCarolina on May 07, 2014, 01:48:25 PM
With OSTK getting back down to the $14 dollar range, i decided to take a look again. Then I saw this today..wtf...$75-90 million for a headquarters??

Item 1.01 Entry into a Material Definitive Agreement.


On May 5, 2014, O.Com Land LLC (the “Company”), a wholly owned subsidiary of Overstock.com, Inc., entered into a Purchase and Sale Agreement dated May 5, 2014 with Gardner Bingham Junction Holdings, L.C. and Arbor Bingham Junction Holdings, L.C. (the “Agreement”) to purchase approximately 13.99 acres of real property located in the Salt Lake Valley, together with its improvements and appurtenances (collectively, the “Parcel”). The Agreement requires an earnest money deposit of $125,000. The Parcel purchase price is approximately $7,920,000. The Agreement provides for a due diligence
period of 90 days for the Company to survey and review information concerning the Parcel and obtain permits and approvals to allow for the Company’s development of a headquarters facility on the Parcel. The Agreement provides for a right of repurchase in the seller if the Company does not commence construction of an office building of at least 220,000 square feet and specified parking facilities within 24 months of the closing date of the Parcel purchase.


On May 5, 2014, O.Com Land LLC (the “Company”), a wholly owned subsidiary of Overstock.com, Inc., entered into a Project Management Agreement (the “Agreement”) for the development of an office building to serve as Overstock.com headquarters (the “Project”), to be constructed in the Salt Lake Valley on approximately 13.99 acres of real property which the Company intends to purchase. The Agreement covers development services to be performed by Gardner CMS, L.C. a Salt Lake City-based developer. Services include enumerated pre-construction, construction, and completion phases of the Project and other services. The Company will pay $3,500,000 for the development services.


The Company's preliminary estimate of the aggregate costs of the corporate facility are likely to be in the range of $75 million to $90 million.
[/b]
Title: Re: OSTK - Overstock.com
Post by: valuecfa on May 15, 2014, 08:34:59 AM
Thank you for bringing it to my attention. I wasn't expecting to get back into OSTK so soon. Great value at current prices

With OSTK getting back down to the $14 dollar range, i decided to take a look again. Then I saw this today..wtf...$75-90 million for a headquarters??

Item 1.01 Entry into a Material Definitive Agreement.


On May 5, 2014, O.Com Land LLC (the “Company”), a wholly owned subsidiary of Overstock.com, Inc., entered into a Purchase and Sale Agreement dated May 5, 2014 with Gardner Bingham Junction Holdings, L.C. and Arbor Bingham Junction Holdings, L.C. (the “Agreement”) to purchase approximately 13.99 acres of real property located in the Salt Lake Valley, together with its improvements and appurtenances (collectively, the “Parcel”). The Agreement requires an earnest money deposit of $125,000. The Parcel purchase price is approximately $7,920,000. The Agreement provides for a due diligence
period of 90 days for the Company to survey and review information concerning the Parcel and obtain permits and approvals to allow for the Company’s development of a headquarters facility on the Parcel. The Agreement provides for a right of repurchase in the seller if the Company does not commence construction of an office building of at least 220,000 square feet and specified parking facilities within 24 months of the closing date of the Parcel purchase.


On May 5, 2014, O.Com Land LLC (the “Company”), a wholly owned subsidiary of Overstock.com, Inc., entered into a Project Management Agreement (the “Agreement”) for the development of an office building to serve as Overstock.com headquarters (the “Project”), to be constructed in the Salt Lake Valley on approximately 13.99 acres of real property which the Company intends to purchase. The Agreement covers development services to be performed by Gardner CMS, L.C. a Salt Lake City-based developer. Services include enumerated pre-construction, construction, and completion phases of the Project and other services. The Company will pay $3,500,000 for the development services.


The Company's preliminary estimate of the aggregate costs of the corporate facility are likely to be in the range of $75 million to $90 million.
[/b]
Title: Re: OSTK - Overstock.com
Post by: spark411 on May 17, 2014, 07:28:42 PM
I don't think the new office is a big deal.   First of all, OSTK management said that their cost for using the space will be approximately the same i.e.  it will cost the same to pay the mortgage for the new space as it does for paying the lease for two spaces.    Also, OSTK management said that their biggest need are more technology programmers.   Having a state of the art facility will help them attract talent which will enhance their moat.   Finally, buying an office building that will appreciate in value over time is better than leasing a space and paying a landlord.

My biggest concern is their Return on Equity will decrease with a Property purchase and thus their stock may not grow as it would have otherwise.
 
Overall, i think this stock is undervalued.   The free cash flow equates to about a 10% yield for a company that has a high ROE and is growing.   Also, the management is wired to continually improve which gives me confidence.

Thanks
Title: Re: OSTK - Overstock.com
Post by: Andy Dufresne on July 14, 2014, 03:32:50 AM
Hi guys,

Trying to summarise my thoughts on the company. Feedback is appreciated:

1. Share price down 60% in the past year (from USD 35 to USD 14) despite reasonable operating results, positive FCF with good FCF yield; large cash position with no debt; while Francis Chu sold ~80% of his position around USD 30 the Byrne family and Fairfax haven't sold a share. CEO Bryne personally holds roughly 50% of the company (directly 27.2% and an additional 22.8% via High Plains Investments LLC).

2. Operating metrics:
- 5 yr Rev growth ~ 10% but lumpy and much of it only coming in the past 2 years); GM relatively stable around 18-19%; P/E(2013) ~3.86 TTM P/E 4.04;
- TTM FCF* 38m (adjusted for AP & accrued liabilities that ran over from 2013 due to timing of Thanksgiving); net debt -110m (no debt, cash of 110m); MVe 342m -> EV 232m; FCF yield ~ 16.4%;

3. Points of concern:

- # of customers is not growing and CEO's answers to how this will change have not been convincing IMHO;
- Margins not really improving despite average transaction price increasing
- Continuing High R&D costs without any clear revenues being made from this investment or a spurt in revenue growth - 5 yr "Technoloogy" spend (2009-2013) ~315m USD!!!
- General feeling from the CCs that the company lacks focus - too many initiatives, lacks integrity to acknowledge that they essentially are a discount home & garden online retailer, and that mgmt has no has no clear blueprint for increasing FCF - e.g. perhaps investing in better sales and marketing people
- In the past 12 months officers & directors of the company have only sold shares, including recently at prices not dissimilar to the current share price
- Potential depreciation useful life accounting shenanigans re-appearing:

http://seekingalpha.com/article/1778882-is-overstock-com-trying-to-cook-the-books-again

Please note that Sam Antar has been at it against the company for a good while:

http://www.whitecollarfraud.com/overstock-accounting-fraud.html

From the 10-K's I have seen the useful life estimate has indeed been changed and annual depreciation expenses have gone down about 10% compared to 2011-2012; I have not looked into the 10Qs - however, the reduction in depreciation expenses (roughly 1.5 m) would explain only 2% of TTM income (but 4 times more based on 2012 income).

4. Positive points

- Positive CF from operations over past 3 years;
- Mgmt finished paying down debt and has not done yet something truly stupid with its massive cash hoard (OTOH they are unable to decide on returning money to shareholders)
- Revenue per employee on par with Amazon (roughly 850k/annum/employee)

Graham P/E formula would suggest a P/E of 9 to 10, which is roughly where the company was a year ago and from Chu's letters I surmise he too thought (last year) that they were worth 30-40 USD per share; they are, of course, very cheap compared to the general market, not to mention Amazon et al. Fairfax continues to hold it (and its a top 5 holding for FFH). There has been no material change in the operating results and FCF yield is not bad;

Of course none of this explains why the stock has gone down so badly despite the market heading north, so any info you have would be appreciated!
Title: Re: OSTK - Overstock.com
Post by: Patmo on July 14, 2014, 05:13:13 AM
If you adjust for the $73mil tax gain, the ttm P/E is like 20-25ish. Am I missing something here?
Title: Re: OSTK - Overstock.com
Post by: cubsfan on July 14, 2014, 05:54:00 AM
Nice summary Andy, looks very interesting, but in regards to the following point you made:

Mgmt finished paying down debt and has not done yet something truly stupid with its massive cash hoard

Have not followed that closely, but Overstock recently announced the construction on a new HQ building.
Not sure how that factors into you analysis, maybe they take on significant debt again or overspend?

edit - sorry, i see this was addressed in recent posts.
Title: Re: OSTK - Overstock.com
Post by: Andy Dufresne on July 14, 2014, 07:04:49 AM
If you adjust for the $73mil tax gain, the ttm P/E is like 20-25ish. Am I missing something here?

Patmo - thanks! I do not know how this slipped away .... this gives rise to the following adjustments to the thesis:

1. Adjusted P/E of almost 21 (342.2/16.34), so they are not cheap on a P/E basis ...

2. The company had significant NOLs - "At December 31, 2013 and 2012, we had federal net operating loss carryforwards of approximately $152.2 million and $174.1 million and state net operating loss carryforwards of approximately $141.2 million and $151.6 million" - they decided to recognize them under GAAP at this time which signals they think they will be profitable. May also give rise to the concern that they are trying to hide the fact that despite an almost 20% increase in YoY revenue, there was negligible impact to the bottom line given high operating costs
Title: Re: OSTK - Overstock.com
Post by: spark411 on July 15, 2014, 04:06:38 AM
There is a fundamental need in the marketplace that Overstock is addressing.   The investor universe is not appreciating the importance of Overstock in the internet marketplace.     When an Amazon, Walmart, Macy's, etc. tries to sell a product, they can't price one good that is not moving well lower than the competing products that are moving well.     The only way the big guys can keep their margins is to remove the non-selling product to another site so that there are no pricing conflicts.    My family has been in the retail business a long time and price consistency within a store is very critical.   For us, we have to sell the remaining goods not moving at an outlet store or even flea markets.   It is amazing how much money we make moving to the outlet store and flea markets.    Overstock is the outlet store/flea market for the internet marketplace.    Moreover, they are making money off someone else's money i.e. Overstock gets paid before they pay the vendors.    This creates a float that they can invest.    The number of vendors they have and support keeps increasing.   The number of vendors/partners that Overstock is working with is their moat.     As long as the moat grows, this business will keep growing.


If you take a step back and look at the big picture, you have the following:

1.  A company with net debt of $100M+.   The company has no debt.
2.  The company makes pure profit.   There is very little the company has to invest with the exception of building it's website/technology.   They investment in the website/technology incrementally i.e. only if it produces a return.   There are no bet the farm type of investments needed for this business to grow.  Also, the company can increase their free cash flow at anytime just by lowering their investments i.e. there is very little maintenance capex needed.
3.  The marketplace NEEDs this company's service.
4.  The number of partners/vendors they are signing is very difficult and time consuming to replicate by competitors.  Big Moat
5.  A majority of their spending is on advertising i.e. building their brand.   The brand equity is not on their books but is growing each day.
6.  The P/E ratio on this stock is not accurate for three reasons.    A)  they used NOLs in Q4 that artificially lowered their P/E  B) they put technology costs in the expense line item instead of capitalizing which means the P/E is higher C) they have legal costs that they can shut down at their own peril.   A private buyer will not factor in the cost of legal costs.
7.   Overstocks is one of the most hated stocks in Wall Street because Overstock is suing Wall Street!   There are big hitters like SAC (Steve Cohen) and Goldman Sachs who are after Overstock.  It seems obvious to me that the stock is being manipulated and thus the volatility.    Pat Byrne and Fairfax does not care about the stock because they have control of the business.   Both of them can take advantage of the situation and buy back more stock.

The business has three risks:

1.  Overstock depends on Google to feed them leads/customers.  Overstock's lumpy revenue is a function of changes in Google's algorithms.   My biggest concern is changes in Google's algorithms and not Overstock's business itself.     
2.  The CEO, Pat Byrne and Fairfax takes this business private similar to Michael Dell.
3.  The stock manipulation continues to occur and I will not see the stock move up in the next 3 years.

I think this stock is a definite buy.  It's selling below it's intrinsic value and this stock is a compounding machine.


Title: Re: OSTK - Overstock.com
Post by: DanielGMask on July 16, 2014, 01:07:29 PM
New post by Sam Antar: http://feedproxy.google.com/~r/WhiteCollarFraud/~3/Y7aMaeBOOQw/indicted-former-utah-attorney-general.html
Title: Re: OSTK - Overstock.com
Post by: LowIQinvestor on July 24, 2014, 07:07:29 AM
Not your average earnings release...

http://finance.yahoo.com/news/overstock-com-reports-q2-2014-130000650.html

"In addition, the 1st Appellate District of the California Court of Appeals has set an August 15, 2014 date in San Francisco to hear oral arguments regarding our lawsuit against Goldman Sachs and Merrill Lynch, as well as the motion to unseal the evidence that has been jointly filed by The Economist, Rolling Stone, Bloomberg, and The New York Times. I believe things are going to get exciting."

"Your humble servant,

Patrick M. Byrne

P.S.  On June 5 of this quarter several CNBC personalities issued an on-air invitation/challenge to me to appear on CNBC. I publicly accepted that invitation that very day (see my DeepCapture blog, "My Response to Becky Quick's Proposal: I Do," June 5, 2014). Since then, CNBC has refused to respond to emails or phone calls. I mention this only because shareholders have asked me why I did not call their raise. The answer is, I did, and they were bluffing."
Title: Re: OSTK - Overstock.com
Post by: rkbabang on July 24, 2014, 10:18:41 AM
Not your average earnings release...

He's not your average CEO.
Overstock.com CEO Patrick Byrne at Porcfest 2014 (http://www.youtube.com/watch?v=fcVExVROT0M)

BTW:  I wanted to go to Porcfest this year to see Patrick Bryne in person (one of the many reasons), but I couldn't make it. :(
Title: Re: OSTK - Overstock.com
Post by: Parsad on July 24, 2014, 10:21:38 AM
The CNBC clip, including Jim Cramer refusing to comment at all on Overstock or Byrne:

http://www.deepcapture.com/my-response-to-becky-quicks-proposal-i-do/

Anybody remember that clip of Joe Kiernan, David Faber and Herb Greenberg mocking Overstock.com a few years ago with comments like "Isn't Overstock.com finished?"..."Is it still around?" 

Now they act as if they never said anything in past stories and interviews.  Cheers!
Title: Re: OSTK - Overstock.com
Post by: peter1234 on July 24, 2014, 09:35:16 PM
He's not your average CEO.

This may be a slight understatement.

 ;D
Title: Re: OSTK - Overstock.com
Post by: spark411 on July 25, 2014, 04:06:48 AM
i think it's interesting how Pat Byrne focused on the technology assets of Overstock.    I never considered the technology an asset that can be monetized by selling it to other firms.   Also, I did not foresee that the technology allows Overstock to roll out new ideas faster.  The technology advantage is just another reason that I think OSTK is a compounding machine.
Title: Re: OSTK - Overstock.com
Post by: Eric50 on January 15, 2015, 10:42:40 PM
Good presentation with scenarios for upside potential

http://www.slideshare.net/mobile/StoneStreetAdvisors/ostk-public-presentation-w-updated-about-ssa-v-2015112?ref=http://www.valuewalk.com/2015/01/overstock-valuation-analysis/
Title: Re: OSTK - Overstock.com
Post by: spark411 on September 02, 2015, 07:24:26 PM
OSTK's revenues continue to grow 15%+ but the stock is not moving.  Any thoughts?   Also, any thoughts on their efforts on crypto technology i.e. t0.com?
Title: Re: OSTK - Overstock.com
Post by: MrB on November 04, 2015, 11:10:16 PM
OSTK hoarding gold
http://www.ft.com/cms/s/0/d00fe302-8352-11e5-8095-ed1a37d1e096.html#axzz3qKKNTXgM
Title: Re: OSTK - Overstock.com
Post by: Cevian on January 13, 2016, 01:54:51 PM
What am I missing here? Shouldn't this company be able to achieve at least a 2% margin? (US$24mil?).
Title: Re: OSTK - Overstock.com
Post by: Eric50 on January 28, 2016, 05:04:49 PM
http://www.globenewswire.com/news-release/2016/01/28/805775/0/en/Overstock-com-Accepts-20-Million-to-Settle-Market-Manipulation-Case.html

$20m settlement + market cap of $270m = $290m or +4%
Title: Re: OSTK - Overstock.com
Post by: Liberty on December 19, 2016, 07:03:18 PM
http://garyweiss.blogspot.ca/2016/12/canadian-court-wallops-overstockcom-ceo.html?m=1
Title: Re: OSTK - Overstock.com
Post by: rkbabang on December 20, 2016, 06:14:58 AM
http://garyweiss.blogspot.ca/2016/12/canadian-court-wallops-overstockcom-ceo.html?m=1

That is some really great unbiased reporting there.

Aly Nazerali is described as "a Candian stock promoter", while Deep Capture is a "website that retails fake news, conspiracy theories and personal attacks on journalist and whistleblowers".     And Mark Mitchell is a "right-wing conspiracy theorist" who "maliciously fabricated wild accusations".

And that is just how the article starts.  The same journalistic integrity is in abundance throughout the article.
Title: Re: OSTK - Overstock.com
Post by: Liberty on December 20, 2016, 06:44:04 AM
http://garyweiss.blogspot.ca/2016/12/canadian-court-wallops-overstockcom-ceo.html?m=1

That is some really great unbiased reporting there.

Aly Nazerali is described as "a Candian stock promoter", while Deep Capture is a "website that retails fake news, conspiracy theories and personal attacks on journalist and whistleblowers".     And Mark Mitchell is a "right-wing conspiracy theorist" who "maliciously fabricated wild accusations".

And that is just how the article starts.  The same journalistic integrity is in abundance throughout the article.

This is a blog, so I don't think it claims to write in AP-style. But I posted because the court document is embedded and you can read for yourself.
Title: Re: OSTK - Overstock.com
Post by: KinAlberta on January 19, 2017, 10:49:54 AM
Anyone following or monitoring the t0 blockchain tech subsidiary?

What percent ownership did Overstock retain?
Title: Re: OSTK - Overstock.com
Post by: awindenberger on January 26, 2017, 05:28:10 PM
Anyone following or monitoring the t0 blockchain tech subsidiary?

What percent ownership did Overstock retain?

My understanding is that Overstock owns 81% of t0.

I'm somewhat surprised the discussion has died out on OSTK here. I finally happened to start looking into Overstock and find it quite fascinating.

Given that their new office is finally completed now, it seems to me that the company is set to start throwing off more cash, and that the blockchain work they are doing is simply a bonus. Of course I guess many investors don't like side-projects like these.

I'm not done with my DD, but initial thought is that the company looks cheaply priced here.
Title: Re: OSTK - Overstock.com
Post by: Haasje on January 27, 2017, 12:53:03 AM
Wrote a counter argument to a bear case by DT a while back http://seekingalpha.com/article/4022209-overstock-oozing-value

Some good info there.

Meanwhile Byrne got his Chuck Yeager moment when Overstock launched a special share class on blockchain. Could be a really sweet way to buy stock by the way. I can't trade it because its U.S. persons only but can imagine it will have some illiquidity premium built in while its actually a more valuable security except for said liquidity.

Title: Re: OSTK - Overstock.com
Post by: kab60 on January 27, 2017, 02:52:59 AM
So they're guiding around 75m OCF this year and around 100m next year with 25m maintenance capex? And they target 15% revenue growth? So if one believes management 75m FCF from retail on a 400m marketcap? Plus a blockchain-option, a HQ which they can do a sale-leaseback on for 80m presumeably and a CEO wishing to do a dutch tender post Q4 report? (All info from recent calls). This screams cheap. I'm trying to get up to speed, does management totally lack credibility?
Title: Re: OSTK - Overstock.com
Post by: Haasje on January 27, 2017, 03:13:16 AM
Lot of history on management.

Byrne was out last year due to hepatitis. He's kind of a libertarian guy.

Years ago he got angry about some short selling campaign in his stock and he went after GS and some other banks over it. Got paid after many many years, last year. Certainly not a CEO everyone likes:

https://www.youtube.com/results?search_query=patrick+byrne

In his view Wayfair is burning money on ads to grow revenue and he just refuses to burn money to grow revenue at a similar pace. 



 
Title: Re: OSTK - Overstock.com
Post by: kab60 on January 27, 2017, 07:09:40 AM
Thanks. I understand he's not everyones cup of tea. Does the numbers I posted look right? And any input on his track record re delivering what he promises?
Title: Re: OSTK - Overstock.com
Post by: awindenberger on January 27, 2017, 01:59:15 PM
Wrote a counter argument to a bear case by DT a while back http://seekingalpha.com/article/4022209-overstock-oozing-value

Some good info there.

Meanwhile Byrne got his Chuck Yeager moment when Overstock launched a special share class on blockchain. Could be a really sweet way to buy stock by the way. I can't trade it because its U.S. persons only but can imagine it will have some illiquidity premium built in while its actually a more valuable security except for said liquidity.

I read that article, lots of good info that got me interested in looking more in depth.

I'm innately attracted to companies with unusual CEOs that have strong views, a record of success, and don't do things the standard Wall Street way (think John Malone, Harry Singleton, and Sardar Biglari currently).

Byrne clearly has a history of disappointing the Street, but I agree with most of the things he's done, and t0 does look like it could be big. Of course this likely has to go in the long term holdings portion of a portfolio, because who knows how quickly the value will be realized. I'm a fan, so hoping some of my shorter term plays work out as expected to give me some more capital for OSTK.

BTW, I've signed up for a t0 account. Once its processed I'll let you guys know what the trading looks like.
Title: Re: OSTK - Overstock.com
Post by: Haasje on January 28, 2017, 05:01:10 AM
I'm not sure how well they live up to the number guidance. It's been a weird few years since I've been following. There has been a summer where they got hit by a google algorithm update (that threw them off a bit) and another year where he's been out for most of the year. Fwiw they've been consistent in my time following about what they were working on and what areas they would expand and that actually happening.

For numbers I'd go by Enterprise Value. I think they also hold some Bitcoin and that's up a lot since I've last written about them and I don't know how much they were holding to begin with.   




Title: Re: OSTK - Overstock.com
Post by: KinAlberta on January 31, 2017, 10:50:28 AM
Mentions Overstock:

2017: The State Of Cryptocurrencies (Part 1)
Javier Hasse , Benzinga Staff Writer     
January 23, 2017
https://www.benzinga.com/fintech/17/01/8934340/2017-the-state-of-cryptocurrencies-part-1
Title: Re: OSTK - Overstock.com
Post by: spark411 on August 29, 2017, 08:52:27 AM
Overstock on fire!  Run baby run!   Finally market value is catching up to intrinsic value.   Byrne says will take private by end of year if the stock does not move up.     Also, OSTK looking to separate blockchain investments with main business.  Simplicity in the story should attract investors.  Goal is to make investors compare Wayfair with OSTK.   Look at market cap to sales.  Ridiculous...
Title: Re: OSTK - Overstock.com
Post by: TwoCitiesCapital on August 29, 2017, 10:47:46 AM
Overstock on fire!  Run baby run!   Finally market value is catching up to intrinsic value.   Byrne says will take private by end of year if the stock does not move up.     Also, OSTK looking to separate blockchain investments with main business.  Simplicity in the story should attract investors.  Goal is to make investors compare Wayfair with OSTK.   Look at market cap to sales.  Ridiculous...

Do you have the source where he said that? Just curious. No position so far.
Title: Re: OSTK - Overstock.com
Post by: spark411 on August 29, 2017, 12:27:24 PM
Here you go.    Page 12 and 13.   Thanks!

file:///C:/Users/spark/Downloads/OSTK-USQ_Transcript_2017-08-03%20(1).pdf
Title: Re: OSTK - Overstock.com
Post by: rkbabang on August 29, 2017, 12:53:58 PM
Here you go.    Page 12 and 13.   Thanks!

file:///C:/Users/spark/Downloads/OSTK-USQ_Transcript_2017-08-03%20(1).pdf

That is a link to a file on your computer.

EDIT: I found it online though.  Thanks for the tip on where to look.
https://seekingalpha.com/article/4095247-overstock-coms-ostk-ceo-patrick-byrne-q2-2017-results-earnings-call-transcript?page=11
Title: Re: OSTK - Overstock.com
Post by: TwoCitiesCapital on August 29, 2017, 01:21:13 PM
"I’d be very interested in going private. And probably looking for the right partner, have some ideas."

Wonder if he's referencing Prem given their history and the comment about looking for the right partners? Maybe I'm just biased given this is a Fairfax forum and I'm a member...

Wish he'd given us a better idea of the value he sees in the company to know what his benchmark is for making something "strategic" happen. The stock is up nearly 30% since those comments so maybe that was enough to hold off any of the planned changes.
Title: Re: OSTK - Overstock.com
Post by: OracleofCarolina on September 27, 2017, 04:59:43 PM
Congrats to those still in this!
Title: Re: OSTK - Overstock.com
Post by: Parsad on September 27, 2017, 05:21:19 PM
Congrats to those still in this!

We bought tons in May and August...in fact, it was going to be double the size of any of our positions, but the order in August was only 1/5th filled!  :(

We have not sold any...fair value is in the $37-45 range, especially if they spin-off the blockchain business...that's about $10-13 by itself in this market, and Overstock retail is about $27-35.

Cheers!
Title: Re: OSTK - Overstock.com
Post by: ourkid8 on September 27, 2017, 06:05:18 PM
I hope the purchase was in a PDH account!

 
Congrats to those still in this!

We bought tons in May and August...in fact, it was going to be double the size of any of our positions, but the order in August was only 1/5th filled!  :(

We have not sold any...fair value is in the $37-45 range, especially if they spin-off the blockchain business...that's about $10-13 by itself in this market, and Overstock retail is about $27-35.

Cheers!
Title: Re: OSTK - Overstock.com
Post by: premfan on September 28, 2017, 06:55:50 AM
Spin off at earliest is 2019. Valuing the blockchain business is forecasting 2019. Occam would be sad with the assumption parade
Title: Re: OSTK - Overstock.com
Post by: KinAlberta on October 18, 2017, 10:25:20 AM
Congrats to those still in this!

We bought tons in May and August...in fact, it was going to be double the size of any of our positions, but the order in August was only 1/5th filled!  :(

We have not sold any...fair value is in the $37-45 range, especially if they spin-off the blockchain business...that's about $10-13 by itself in this market, and Overstock retail is about $27-35.

Cheers!

Many years back I owned OSTK only to come back in a year or so ago after sitting out for maybe a decade. However, I bought small and pared it back in early 2017 and kept a small position until recently when I doubled it. So, it's still miniscule.

That said, I'm really curious about your reasoning in trying to as you said: "going to be double the size of any of our positions".


Now that there's talk of taking it private, I see the management in a new light. It shows a willingness either one, pump one's stock when proper financial reporting fails, or two, to thoroughly screw over existing, possibly very long term minority shareholders - usually at a price well below intrinsic value as estimated by those most able to determine it - the insiders themselves. No easier way to transfer wealth from your partners to yourself. (Wealth being not just the current value but the fact that it exists at all.)

Note: as someone that traded in and out - I had no long term loyalty but I'm sure there would be others that have likely stuck with it for many many years.
Title: Re: OSTK - Overstock.com
Post by: kh812000 on October 19, 2017, 08:51:33 AM
Prior short seller Cohodes goes long....

https://www.youtube.com/watch?v=m44Nu6ffyfI


He says OSTK generates 100mm in FCF.   Anyone else see this?  I dont see it at all in the #s but perhaps other initiatives/costs masking true cash generation of the ecommerce biz?

Title: Re: OSTK - Overstock.com
Post by: KinAlberta on October 26, 2017, 12:14:53 PM
So what is the fairest thing to say? That OSTK is now attracting a lot of speculative buying or that it is or has been fundamentally undervalued?
Title: Re: OSTK - Overstock.com
Post by: KCLarkin on October 26, 2017, 12:33:01 PM
So what is the fairest thing to say? That OSTK is now attracting a lot of speculative buying or that it is or has been fundamentally undervalued?

Seems like it was fundamentally undervalued and the company shrewdly stoked speculative buying to catalyze that value. Not really my cup of tea, but I should have bought this. The setup was pretty obvious.

For those who own already, I recommend holding. Speculation can take this much higher.
Title: Re: OSTK - Overstock.com
Post by: KinAlberta on November 07, 2017, 12:18:20 PM

Will Overstock's $500 Million ICO Trigger An Explosion In Blockchain, Cryptocurrencies?

Oct. 26, 2017

https://seekingalpha.com/article/4116812-will-overstocks-500-million-ico-trigger-explosion-blockchain-cryptocurrencies



Overstock.com: Blockchain And Used Cars?

Oct. 26, 2017
excerpt:
"If Overstock wants to cut expenses and further improve profitability, the next natural move is to move its e-commerce payments’ system to the blockchain. Without intermediaries but computers executing transparent trades between parties via smart contracts, costs can be significantly reduced. Many value added functions are under development to more efficiently and securely facilitate payments processing. Digital identities, for example, will soon update and encrypt universal customer IDs and credit profiles in real time. Overstock will not have to conduct its own credit checks before releasing a car loan to the bank accounts of car buyers. It might still be too early to say,..."

https://seekingalpha.com/article/4116724-overstock-com-blockchain-used-cars
Title: Re: OSTK - Overstock.com
Post by: KCLarkin on November 09, 2017, 07:50:29 AM
Seems like it was fundamentally undervalued and the company shrewdly stoked speculative buying to catalyze that value. Not really my cup of tea, but I should have bought this. The setup was pretty obvious.

For those who own already, I recommend holding. Speculation can take this much higher.

Damn, I wish I had listened to you.
Title: Re: OSTK - Overstock.com
Post by: rkbabang on November 11, 2017, 08:56:32 AM
“Reflecting the high interest in bitcoin and blockchain, Byrne said about 850 people dialed into Overstock's third-quarter earnings call, according to a StreetAccount transcript. Byrne also said the call could be his last with the company as it currently exists.”

https://www.cnbc.com/2017/11/10/overstock-may-soar-if-sells-e-commerce-focuses-on-bitcoin-blockchain.html
Title: Re: OSTK - Overstock.com
Post by: KinAlberta on November 14, 2017, 10:55:15 AM
Saw a headline saying that George Soros  bought into Overstock
Title: Re: OSTK - Overstock.com
Post by: rkbabang on November 14, 2017, 11:10:14 AM
Saw a headline saying that George Soros  bought into Overstock

"Soros invested in 2,472,188 shares for $40.10 per share"
https://www.gurufocus.com/news/595550/george-soros-plunges-into-overstockcom

If that is accurate with 25M shares outstanding that is 9.8% of the company.
Title: Re: OSTK - Overstock.com
Post by: gurpaul88 on November 14, 2017, 11:12:51 AM
Was is not just warrants he exercised?

Goes into good detail: https://seekingalpha.com/article/4123327-overstock-misplaced-investor-euphoria-will-end-losses
Title: Re: OSTK - Overstock.com
Post by: spark411 on November 20, 2017, 03:57:08 PM
Crazy good.    Listen to the last 2 minutes.   Clearly state catalyst.   Will be interesting to see how much higher it goes.   I think the market cap equaling the total revenues is reasonable.  Thoughts?

https://www.youtube.com/watch?v=Y9XWghQb20k
Title: Re: OSTK - Overstock.com
Post by: rkbabang on November 21, 2017, 05:57:50 AM
Crazy good.    Listen to the last 2 minutes.   Clearly state catalyst.   Will be interesting to see how much higher it goes.   I think the market cap equaling the total revenues is reasonable.  Thoughts?

https://www.youtube.com/watch?v=Y9XWghQb20k

I just sold half of my shares last week so I expect the stock to at least triple from here.  If there is one thing I do consistently it is sell way too early.
Title: Re: OSTK - Overstock.com
Post by: spark411 on November 21, 2017, 01:17:54 PM
i'm having the same issue.   I keep selling 10% of shares at certain weight of portfolio but after I sell it keeps going up.   I'm reminded how hard it is to hold onto a stock like buffett and get the large returns.    At 1x sale we're looking at 1.8B which means about 20% above today's price.    using pabrai's 90% of intrinsic value method, it should mean i should sell at 10% of today's stock price.   very hard to decide what to do.   the target prices assumes no value on the t0 stuff.  hold like buffett or sell like pabrai?
Title: Re: OSTK - Overstock.com
Post by: Parsad on November 21, 2017, 02:09:04 PM
Crazy good.    Listen to the last 2 minutes.   Clearly state catalyst.   Will be interesting to see how much higher it goes.   I think the market cap equaling the total revenues is reasonable.  Thoughts?

https://www.youtube.com/watch?v=Y9XWghQb20k

I just sold half of my shares last week so I expect the stock to at least triple from here.  If there is one thing I do consistently it is sell way too early.

i'm having the same issue.   I keep selling 10% of shares at certain weight of portfolio but after I sell it keeps going up.   I'm reminded how hard it is to hold onto a stock like buffett and get the large returns.    At 1x sale we're looking at 1.8B which means about 20% above today's price.    using pabrai's 90% of intrinsic value method, it should mean i should sell at 10% of today's stock price.   very hard to decide what to do.   the target prices assumes no value on the t0 stuff.  hold like buffett or sell like pabrai?

Explain to me why you two are crying over this...after making such wonderful investments and enjoying terrific returns?  The glass is half-full, not half-empty.  Sell if you can't sleep...hold if you can sleep.  Cheers!
Title: Re: OSTK - Overstock.com
Post by: rkbabang on November 21, 2017, 03:35:35 PM
Crazy good.    Listen to the last 2 minutes.   Clearly state catalyst.   Will be interesting to see how much higher it goes.   I think the market cap equaling the total revenues is reasonable.  Thoughts?

https://www.youtube.com/watch?v=Y9XWghQb20k

I just sold half of my shares last week so I expect the stock to at least triple from here.  If there is one thing I do consistently it is sell way too early.

i'm having the same issue.   I keep selling 10% of shares at certain weight of portfolio but after I sell it keeps going up.   I'm reminded how hard it is to hold onto a stock like buffett and get the large returns.    At 1x sale we're looking at 1.8B which means about 20% above today's price.    using pabrai's 90% of intrinsic value method, it should mean i should sell at 10% of today's stock price.   very hard to decide what to do.   the target prices assumes no value on the t0 stuff.  hold like buffett or sell like pabrai?

Explain to me why you two are crying over this...after making such wonderful investments and enjoying terrific returns?  The glass is half-full, not half-empty.  Sell if you can't sleep...hold if you can sleep.  Cheers!

I’m not crying. That’s why I held onto half of my shares so that I can sleep either way it goes.
Title: Re: OSTK - Overstock.com
Post by: no_free_lunch on November 22, 2017, 07:16:42 AM
i'm having the same issue.   I keep selling 10% of shares at certain weight of portfolio but after I sell it keeps going up.   I'm reminded how hard it is to hold onto a stock like buffett and get the large returns.    At 1x sale we're looking at 1.8B which means about 20% above today's price.    using pabrai's 90% of intrinsic value method, it should mean i should sell at 10% of today's stock price.   very hard to decide what to do.   the target prices assumes no value on the t0 stuff.  hold like buffett or sell like pabrai?

Why should it trade at 1x sales?  I think it should be based on earnings alone.  I could care less about their sales if they can't make a profit.

I think 60-75% of the value of the company right now is t0.  t0 seems very speculative right now.  It could be worth billions and OSTK is still under-valued or it could be worth nothing.
Title: Re: OSTK - Overstock.com
Post by: rkbabang on November 22, 2017, 10:33:17 AM
Anyone here looking at the t0 token sale? 

There isn't much info on it on the website.  Just this.
https://tzero.com/news/2017/11/16/tzero-announces-launch-date-and-initial-terms-for-its-proposed-token-sale

I'm going to register and see if I can get more info.
Title: Re: OSTK - Overstock.com
Post by: rkbabang on November 22, 2017, 11:07:31 AM
Anyone here looking at the t0 token sale? 

There isn't much info on it on the website.  Just this.
https://tzero.com/news/2017/11/16/tzero-announces-launch-date-and-initial-terms-for-its-proposed-token-sale

I'm going to register and see if I can get more info.

I'm trying to register, but I'm not sure if I am going to do this next step.  The first step is to go to verifyinvestor.com and get a verification certificate, that took about 15 minutes.  I thought that was it until I went back to saftlaunch.com and they now want me to upload a picture of my passport and another picture of me holding my passport (see attachment).  Does this sound a little excessive?
I don't see how they are going to raise half a billion dollars if they expect potential investors to go through this verification process.  Tezos didn't do any of this.
Title: Re: OSTK - Overstock.com
Post by: mwtorock on November 23, 2017, 08:40:44 PM
Been in this name since 2014. The thing is you cant take Patrick's words at face value. He said on the last call he wont sell it for 10B, but I bet he will jump to it if any offer comes near half of that. Holding or re-balancing both could make sense. To me, there are two catalysts in the short term: 1) online retail - cash it out or merge it with another BM company like BBBY or Big Lots - i thought it is worth about 500m - 800m depends on synergy, but it could be more if the software indeed creates value for the buyer as Patrick states. 2) ICO - a successful ICO would no doubt increase the value of tzero. This is more speculative, but if they can raise 200m without losing any equity, Medici alone could be worth 1B. Some people say performance of bitcoin will have an impact on the ICO, which might be true wrt investor sentiment.

Overall i think short term upside of 20% -30% depends on catalysts. Long term revolutionary block chain technology plays are more vc type of investing, which is hard to value for me.

Good article here
https://seekingalpha.com/article/4127216-much-overstock
Title: Re: OSTK - Overstock.com
Post by: spark411 on November 24, 2017, 04:25:43 AM
i'm having the same issue.   I keep selling 10% of shares at certain weight of portfolio but after I sell it keeps going up.   I'm reminded how hard it is to hold onto a stock like buffett and get the large returns.    At 1x sale we're looking at 1.8B which means about 20% above today's price.    using pabrai's 90% of intrinsic value method, it should mean i should sell at 10% of today's stock price.   very hard to decide what to do.   the target prices assumes no value on the t0 stuff.  hold like buffett or sell like pabrai?

Why should it trade at 1x sales?  I think it should be based on earnings alone.  I could care less about their sales if they can't make a profit.

I think 60-75% of the value of the company right now is t0.  t0 seems very speculative right now.  It could be worth billions and OSTK is still under-valued or it could be worth nothing.


I'm stealing a comment made on seekingalpha.   I agree with this analysis.  I think 1x revenues is conservative and offers  margin of safety.   Look at WMT stock after buying jet.com.    I think a company like Target or Macy's will benefit from OSTK retail business.   

jet.com sold for 3.billion. they had 1billion in revenue. ostk has 1.83 billion in revenue. zulily sold for 2.4 billion, they have less than 439million in revenue.. etsy has 2billion market cap on 397 million in revenue... what's so hard to comprehend???? someone on here just posted that otsk retail business is $17... come on guys, get a clue !
Title: Re: OSTK - Overstock.com
Post by: no_free_lunch on November 24, 2017, 06:22:37 AM
spark, don't you think you are cherry picking?  Overstock business is not new and it is stagnant with low profits.  The share price going up seems to correlate with t0 and bitcoin.
Title: Re: OSTK - Overstock.com
Post by: mwtorock on November 24, 2017, 06:53:50 AM
Tech acquisitions is also about the talent. Walmart paid for the management team of jet.com too, and you have seen changes on Walmart.com ever since they joined. In overstock's case, i dont know if anyone would want Patrick ;).
Title: Re: OSTK - Overstock.com
Post by: spark411 on November 24, 2017, 09:49:55 PM
Good points.  I've been a big bull on this stock for the past few years and thus may have several biases.

I'm looking for folks to refute my case so I can see what I'm missing.    I do not think I'm cherry picking the comps.  If anyone can show an internet business transaction over $500M that was below 1x revenue, please post so that we can all learn.

I do not think past EBITDA is a good measure to value OSTK for the following reasons   A)  the market does not seem to value the stocks based on EBITDA  B)  OSTK has very conservative accounting practices i.e. marketing costs are expensed vs. capitalized.  This supresses EBITDA relative to it's peers  C) There is a lot of noise in the past EBITDA numbers. For example, legal costs related to naked short selling is an offensive expense that is not recurring.    Another example is that investments for T0/Medici are burdened by the internet business.   A buyer would not factor those costs in the proforma EBITDA calculations D) recent EBITDA is lower b/c of changes in Google's algorithm.     Changes in Google's algorithm occurs every few quarters and is just part of the business.  EBITDA should be normalized for the dips.   E)  Wayfair is acting irrationally and that's causing OSTK sales and EBITDA to suffer.  I think this is the one I'm most worried about. It's unclear how long this will occur.
   
Title: Re: OSTK - Overstock.com
Post by: SnarkyPuppy on November 25, 2017, 06:42:06 AM
Good points.  I've been a big bull on this stock for the past few years and thus may have several biases.

I'm looking for folks to refute my case so I can see what I'm missing.    I do not think I'm cherry picking the comps.  If anyone can show an internet business transaction over $500M that was below 1x revenue, please post so that we can all learn.

I do not think past EBITDA is a good measure to value OSTK for the following reasons   A)  the market does not seem to value the stocks based on EBITDA  B)  OSTK has very conservative accounting practices i.e. marketing costs are expensed vs. capitalized.  This supresses EBITDA relative to it's peers  C) There is a lot of noise in the past EBITDA numbers. For example, legal costs related to naked short selling is an offensive expense that is not recurring.    Another example is that investments for T0/Medici are burdened by the internet business.   A buyer would not factor those costs in the proforma EBITDA calculations D) recent EBITDA is lower b/c of changes in Google's algorithm.     Changes in Google's algorithm occurs every few quarters and is just part of the business.  EBITDA should be normalized for the dips.   E)  Wayfair is acting irrationally and that's causing OSTK sales and EBITDA to suffer.  I think this is the one I'm most worried about. It's unclear how long this will occur.
 

I think you're looking at it from an angle that really wants this to do well.   Objectivity is important.    If your thesis is predicated on internet businesses being worth > 1x revenue if < $500mm market capitalization,  there are a lot of better opportunities for you to find in the microcap space.    In response to your direct points:

A-  Market will value the business on a DCF of its future cash flows.  Revenue multiples are only a very small part of the picture.    Two companies with the exact same revenue should trade at very different revenue multiples given quality of revenue, recurring nature of revenue, operating and fcf margins, competitive advantage, business and industry outlook, etc.   
B-  Marketing costs not being capitalized is conservative?   
C-  The t0/medici business doesn't make money.   At ~$40 per share you could argue that you were purchasing the securities lending blockchain for free/very cheap given certain assumptions in the "free money" ICO.   At $64 per share, you're speculating on this portion of the business.   
D-  What is OSTK's normalized EBITDA?  And why are you not subtracting out capital expenditures required to maintain the business?   
E-  Not sure what this means.

At $64 you're basically guessing on 1/3 of the business.    Not saying it won't double or triple, but you're absolutely paying for some success in t0/Medici.   

Personally-  I think Byrne recognized an opportunity to ride the waves of blockchain hype into a sale of the business.   This may work out.     
Title: Re: OSTK - Overstock.com
Post by: spark411 on November 25, 2017, 07:33:48 AM
Very good points.  In fact, I've been selectively selling OSTK for a microcap type of stock.   Other opportunities exist that have similar upside from this point but less downside risk--I think downside is 50%.  Even though I'm optimistic, the risk/reward does not outweigh other opportunities available.  The interesting fact is that there are two catalysts about brewing in the next 4-6 weeks and the question is do you sell before the events or afterwards.   Two events are:  Potential sale of online business and ICO early December.   Learning a lot about the challenges of investing.   
Title: Re: OSTK - Overstock.com
Post by: aws on November 25, 2017, 11:06:17 AM
Don't forget to factor in the dilution from the warrant transactions earlier this month.  There will be 3,722,188 new shares issued at 40.45 per share early next year.  Combined with the warrant sales proceeds the company will received $157 million in new cash, but those new shares will represent a 13% ownership of the new company, so for every 1% you had before you will only have 0.87% ownership.

All other things being equal, this has a pretty significant effect on the share price.  The funds that bought the warrants have made a profit of about $85 million so far on a $6.6 million investment (which was a no-brainer for the funds as I think the warrant cost was set to something like 1/3rd of the black-sholes warrant value), or about $23 per share after exercised.  In theory that $85 million is like a transfer of wealth from the existing shareholders, who would have held a greater ownership interest, to the option holders.  With about 25 million shares outstanding before the deal that's a $3.42 reduction per share compared to what the shares should be worth without the sweetheart deal given to those funds.  However, I'm sure the hype created by getting those big names involved resulted in much more of a gain than the wealth transfer lost, but if you're valuing it on a long-term basis that shouldn't really matter.

By the way, does anyone know for sure how the accounting of these warrants will be done for Q4?  My recollection of the accounting rules is that they will need to revalue them based on market value at 12/31/17 and record a loss equal to the difference, which as I said is currently an $85 million loss.  It's just a paper transaction, but that could lead to an ugly headline EPS figure if people aren't prepared for it.

Title: Re: OSTK - Overstock.com
Post by: Sharad on November 29, 2017, 09:07:27 AM
Crazy good.    Listen to the last 2 minutes.   Clearly state catalyst.   Will be interesting to see how much higher it goes.   I think the market cap equaling the total revenues is reasonable.  Thoughts?

https://www.youtube.com/watch?v=Y9XWghQb20k

I just sold half of my shares last week so I expect the stock to at least triple from here.  If there is one thing I do consistently it is sell way too early.

i'm having the same issue.   I keep selling 10% of shares at certain weight of portfolio but after I sell it keeps going up.   I'm reminded how hard it is to hold onto a stock like buffett and get the large returns.    At 1x sale we're looking at 1.8B which means about 20% above today's price.    using pabrai's 90% of intrinsic value method, it should mean i should sell at 10% of today's stock price.   very hard to decide what to do.   the target prices assumes no value on the t0 stuff.  hold like buffett or sell like pabrai?

Explain to me why you two are crying over this...after making such wonderful investments and enjoying terrific returns?  The glass is half-full, not half-empty.  Sell if you can't sleep...hold if you can sleep.  Cheers!

I’m not crying. That’s why I held onto half of my shares so that I can sleep either way it goes.

This reaction to selling and seeing a stock shoot higher reminds me of the dot-com boom and bubble. Rather than say anything negative to that, I'd like to congratulate you folks for having the discipline to sell in a parabolic move (ignoring OSTK for a moment, and consider the move of cryptocurrency; regardless of it will become the cornerstone medium of exchange in the future, the move is unsustainable in the long run, and companies piggybacking its move cannot go up forever). It's one of the most difficult things to do as an investor.

Hat tip to your big victory. May you have many more in the future!
Title: Re: OSTK - Overstock.com
Post by: spark411 on December 11, 2017, 03:23:21 PM
Huge news....

https://finance.yahoo.com/news/shares-retailer-turned-bitcoin-play-185301592.html

Title: Re: OSTK - Overstock.com
Post by: KinAlberta on December 13, 2017, 12:29:28 PM
Congrats to those still in this!

We bought tons in May and August...in fact, it was going to be double the size of any of our positions, but the order in August was only 1/5th filled!  :(

We have not sold any...fair value is in the $37-45 range, especially if they spin-off the blockchain business...that's about $10-13 by itself in this market, and Overstock retail is about $27-35.

Cheers!

Many years back I owned OSTK only to come back in a year or so ago after sitting out for maybe a decade. However, I bought small and pared it back in early 2017 and kept a small position until recently when I doubled it. So, it's still miniscule.

That said, I'm really curious about your reasoning in trying to as you said: "going to be double the size of any of our positions".


Now that there's talk of taking it private, I see the management in a new light. It shows a willingness either one, pump one's stock when proper financial reporting fails, or two, to thoroughly screw over existing, possibly very long term minority shareholders - usually at a price well below intrinsic value as estimated by those most able to determine it - the insiders themselves. No easier way to transfer wealth from your partners to yourself. (Wealth being not just the current value but the fact that it exists at all.)

Note: as someone that traded in and out - I had no long term loyalty but I'm sure there would be others that have likely stuck with it for many many years.


Given the possible sale, blockchain expansion, etc. I'm even more curious now about what you are thinking about actual valuations, and any other thoughts you might be willing to share. It would be refreshing compared to the useless speculative potential type of information we get from uncritical media seeking clicks. For example:



Regularly the vested, self-serving interests (aka stock promoters) typically say that whatever they are promoting "can double from here".  Then when/if the stock starts to move they suddenly and predictably up their forecasts to 5 to 10 times.  Here we have roughly 8X:



Quote
Overstock.com shares spike after blockchain unit announces for-profit property registry
Overstock.com shares briefly rise 8.79 percent to $58.15 a share after CEO Patrick Byrne announces a joint venture for a global property registry based on the blockchain technology behind bitcoin and other digital currencies.
The for-profit venture is in partnership with well-known Peruvian economist Hernando de Soto, who has argued that formal documentation of land ownership is the key to alleviating poverty in underdeveloped countries.
Independent investor Marc Cohodes thinks if Byrne can deliver on his blockchain investments, Overstock shares are worth between $200 and $400 each.
Evelyn Cheng   | @chengevelyn
Published 3 Hours Ago  Updated 1 Hour Ago


..."If [Byrne] executes properly on blockchain I think the stock's worth somewhere between $200 and $400," said Marc Cohodes, a noted short seller and independent investor who turned positive on Overstock.com in October. "I own a lot of this thing. I bought a lot more the other day when it pulled back."


https://www.cnbc.com/2017/12/13/overstock-com-spikes-after-blockchain-unit-announces-for-profit-property-registry.html
Title: Re: OSTK - Overstock.com
Post by: mwtorock on December 15, 2017, 03:05:36 PM
this is getting into the zone for the amzn/nflx investors. you have to be comfortable valuing high uncertainty high potential situations. a couple of guys i talked with that got into ostk this year both looking at not the valuation but the potential.

my estimation of the retail business was $600m a couple of years ago, but they might be able to sell it for more with a strategic buyer. at current market cap, i guess it is not cheap unless you have high confidence in the potential of blockchain businesses. i still feel 20%-30% upside in the short term on catalysts - coin offering and the sale of retail business. at the moment i dont think i will be a holder after the events.

Title: Re: OSTK - Overstock.com
Post by: DanielGMask on January 01, 2018, 07:04:08 PM
Sam Antar, former CFO of Crazy Eddie says Overstock shares are highly manipulated.

https://whitecollarfraud.blogspot.com/2017/12/thanks-to-marc-cohodes-were-back-to-bad.html
Title: Re: OSTK - Overstock.com
Post by: Green King on January 01, 2018, 10:58:15 PM
Sam Antar, former CFO of Crazy Eddie says Overstock shares are highly manipulated.

https://whitecollarfraud.blogspot.com/2017/12/thanks-to-marc-cohodes-were-back-to-bad.html

Lolz, where is the data?
Title: Re: OSTK - Overstock.com
Post by: DanielGMask on January 02, 2018, 09:45:38 AM
I didn’t write it, just sharing the article with those who own the stock!
Title: Re: OSTK - Overstock.com
Post by: KinAlberta on January 02, 2018, 11:38:04 AM
Sam Antar, former CFO of Crazy Eddie says Overstock shares are highly manipulated.

https://whitecollarfraud.blogspot.com/2017/12/thanks-to-marc-cohodes-were-back-to-bad.html

Lolz, where is the data?

They see no need for data - or reason.   

It's been clear for more than a decade now that when it comes to OSTK, there are a lot of severely maladjusted, highly subjective and oh, so, so EXCEEDINGLY BORING personalities out there with never-ending vendettas against each other. Moreover the obvious and potential undisclosed vested interests just make for more such noise in the news-streams that ruin it for normal people.  :(
Title: Re: OSTK - Overstock.com
Post by: Cevian on January 05, 2018, 01:06:23 PM
jet.com had close to $1Bil of revenues when Walmart bought it for $3.3Bil.

Could a case be made that, seeing as Overstock has over $1.6Bil. of revenues, even the retail side alone is worth a bundle to a third party buyer?

I believe the current total market cap is slightly over $2.2 Bil.
Title: Re: OSTK - Overstock.com
Post by: Liberty on January 05, 2018, 01:23:23 PM
jet.com had close to $1Bil of revenues when Walmart bought it for $3.3Bil.

Could a case be made that, seeing as Overstock has over $1.6Bil. of revenues, even the retail side alone is worth a bundle to a third party buyer?

I believe the current total market cap is slightly over $2.2 Bil.

Comparing revenues isn't enough. How fast are those respectively growing? What kind of ROIC are they getting on the growth investments, what kind of margins could they get at a stable rate?
Title: Re: OSTK - Overstock.com
Post by: Parsad on January 05, 2018, 02:46:37 PM
jet.com had close to $1Bil of revenues when Walmart bought it for $3.3Bil.

Could a case be made that, seeing as Overstock has over $1.6Bil. of revenues, even the retail side alone is worth a bundle to a third party buyer?

I believe the current total market cap is slightly over $2.2 Bil.

Comparing revenues isn't enough. How fast are those respectively growing? What kind of ROIC are they getting on the growth investments, what kind of margins could they get at a stable rate?

+1!  We thought Overstock was worth around $35-$40 or 0.5 times revenue conservatively.  It's now fully-priced by the markets...forget about conservatively...and what you've been seeing is more of a mania around any blockchain potential. 

That being said, stupid money does very stupid things, and I would not be surprised to see this thing hit $130-150 per share in 2018.  It has propelled from a value-stock into something almost purely speculative now.  Remember Overstock was an $80/share stock 16 years ago, and that was based on internet mania...we saw what happened over the ensuing years. 

We've sold about 2/3rds of our position (bought at an average cost of about $14.50) starting at $35 all the way up to just under $86 today.  Don't want to take any more short-term gains, but the speculation is just on a tear!

Cheers!   
Title: Re: OSTK - Overstock.com
Post by: no_free_lunch on January 07, 2018, 06:54:34 AM
It seems that the current valuation can only be justified based on a very successful ICO.  I actually think that is likely given what is happening elsewhere in the crypto-space.  However, the entire process is very opaque. 

Beyond the actual process it is very difficult to find information on the terms of the ICO.  There are some press releases/interviews where Byrne mentions that the ICO will be preferrred stock in tzero, but I haven't seen any formal documentation on this.  Right now overstock owns 80% of tzero, what will be their percentage after the ICO completes?  What percentage of the profits do the tokens get and what percentage of the tokens will tzero own?  Given that it is supposed to be sec compliant, shouldn't there be filings on edgar?
Title: Re: OSTK - Overstock.com
Post by: Dazel on January 07, 2018, 09:27:49 AM


Congrats Sanjeev! I love to see you do well!
Do you find it somewhat strange-funny that the principle behind a lot of the hype (right or wrong I don’t know)...is Marc Cohodes the driving force behind Rocker Partners that was sued by Fairfax and Overstock? I do....he is very smart guy but it is weird.

(Please don’t respond)

All the best!

Dazel
Title: Re: OSTK - Overstock.com
Post by: Parsad on January 07, 2018, 12:27:34 PM


Congrats Sanjeev! I love to see you do well!
Do you find it somewhat strange-funny that the principle behind a lot of the hype (right or wrong I don’t know)...is Marc Cohodes the driving force behind Rocker Partners that was sued by Fairfax and Overstock? I do....he is very smart guy but it is weird.

(Please don’t respond)

All the best!

Dazel

Yes, the irony of all of this certainly isn't lost on me!  Overstock went from a decade of being a pariah to celebrated genius with Cohodes.  Weird!  Cheers!
Title: Re: OSTK - Overstock.com
Post by: no_free_lunch on January 08, 2018, 06:07:53 PM
I will answer my own question.  If anyone is looking for information on the tzero ico, they are filing it under t0 or if you prefer, CIK  0001726726.

So far they only have one filing which details the sales to date of the ICO.  There is nothing regarding terms of the deal.  Things are actually a bit slow on the ICO with only $8M raised to 46 investors.  However, I suspect this may just reflect processing delays in validating investor accreditation.

I did find in the latest conference call some mention to the ICO from Byrne.   He said that OSTK will own 60-70% of the tzero, down from 81% currently.  Based on those figures, the tzero ico would own 15-25% of tzero, with $250-300M raised.  If they are able to pull that off, that would imply a valuation of tzero at $1B-1.5B.   OSTK's share would be $600M to $1.1B.
Title: Re: OSTK - Overstock.com
Post by: rkbabang on January 09, 2018, 05:56:07 AM
I will answer my own question.  If anyone is looking for information on the tzero ico, they are filing it under t0 or if you prefer, CIK  0001726726.

So far they only have one filing which details the sales to date of the ICO.  There is nothing regarding terms of the deal.  Things are actually a bit slow on the ICO with only $8M raised to 46 investors.  However, I suspect this may just reflect processing delays in validating investor accreditation.

I did find in the latest conference call some mention to the ICO from Byrne.   He said that OSTK will own 60-70% of the tzero, down from 81% currently.  Based on those figures, the tzero ico would own 15-25% of tzero, with $250-300M raised.  If they are able to pull that off, that would imply a valuation of tzero at $1B-1.5B.   OSTK's share would be $600M to $1.1B.

I went through the verification process completely and was informed that from Dec 16 - Jan 16 the ICO was open to a "select group" of investors only (I did not make that cut), and Jan 16 - Feb 16 it will open to all verified accredited investors.  I was expecting to be given some type of information like a prospectus or an info packet or something, but so far I have been sent nothing.  Hopefully they will provide some details before Jan 16.  I don't know if I would invest anyway, but I certainly won't be throwing money into a black box.
Title: Re: OSTK - Overstock.com
Post by: no_free_lunch on January 09, 2018, 06:25:44 AM
I went through the verification process completely and was informed that from Dec 16 - Jan 16 the ICO was open to a "select group" of investors only (I did not make that cut), and Jan 16 - Feb 16 it will open to all verified accredited investors.  I was expecting to be given some type of information like a prospectus or an info packet or something, but so far I have been sent nothing.  Hopefully they will provide some details before Jan 16.  I don't know if I would invest anyway, but I certainly won't be throwing money into a black box.

Thanks for the feedback!  Good to hear from someone who got verified.

This is a really tough one for me.  On the one hand, I can see scenarios where OSTK goes to $200,$300,$500.. who f'ing knows.   You look at some of the other currencies with valuations in the 10s of billions and yet tzero is probably better capitalized, is in a large "niche" market and has been at it for similar time frames.  There is also the investments from some big players.

On the other hand.. the lack of disclosure bugs me.  The fact that disclosure is happening via conference calls bothers me.  The fact that Byrne thows out a valuation of $5B for tzero and then later $10B, not a fan.  The warrants to soros, like $2 for warrants on a $40 stock that has just tripled?  Way too cheap in my opinion.  The fact that the existing business has been at best mediocre is a concern. 

Honestly the only reason I am even thinking about this is it might be a bit safer way to play the crypto space and I do see a disconnect between their valuation and other crypto's.
Title: Re: OSTK - Overstock.com
Post by: rkbabang on January 10, 2018, 10:38:32 AM
I just received another update email from SAFTlaunch about the t0 ICO.  No new info, but it mentions that I will be getting a " offering memorandum" "on or about January 18, 2018".

Quote
Thank you for your patience and support.  In recent months, we have had unprecedented user volume and are working feverishly to process potential investors registering to participate in tZERO's security token offering. Please see below for an update on the tZERO offering on SAFTLaunch.

While the pre-sale period is currently open to certain strategic investors, all other qualified investors will begin having access to the offering memorandum and SAFE on or about January 18, 2018.

Please look for emails from support@SAFTLaunch.com with the subject "tZERO qualified investors" in the coming days.
Title: Re: OSTK - Overstock.com
Post by: rkbabang on January 17, 2018, 12:06:21 PM
https://www.businesswire.com/news/home/20180116006759/en/tZERO-Trade-KODAKCoin-Future-U.S.-Regulated-Security

tZERO to Trade KODAKCoin on Its Future U.S. Regulated Security Token Trading Platform

NEW YORK--(BUSINESS WIRE)--Overstock.com’s blockchain subsidiary, t0.com, Inc. (“tZERO”) announced today its intent to provide advisory services to WENN Digital in connection with its recently announced KODAKCoin Security Token Offering. In addition, tZERO will advise on secondary trading of the KODAKCoin.

The parties intend that the KODAKCoin will launch in Q1 2018. KODAKCoin will be the first third-party security token to launch on the security token platform that tZERO is developing...
Title: Re: OSTK - Overstock.com
Post by: no_free_lunch on January 20, 2018, 07:09:07 AM
Is there any word on the ICO phase 2?  Phase 1 was supposed to have completed by now.  I see nothing in the news or edgar so I will have to assume it is still on-going, and delayed.
Title: Re: OSTK - Overstock.com
Post by: rkbabang on January 20, 2018, 10:38:42 AM
Is there any word on the ICO phase 2?  Phase 1 was supposed to have completed by now.  I see nothing in the news or edgar so I will have to assume it is still on-going, and delayed.

Received email yesterday which said:

“Thursday January 25th, SAFTLaunch will determine the number of people eligible to participate.  SAFTLaunch will begin emailing groups of investors all around the world with the date on which they will be able to access tZERO's token offering.  Each group will have a date range in which they MUST complete their deal subscription.  Unfortunately, no exceptions can be made for investors who miss the cut-off date of this period.  Please be prepared for the investment period”
Title: Re: OSTK - Overstock.com
Post by: WneverLOSE on January 21, 2018, 04:50:38 AM
I'm starting to read about the Patrick Byrne story and I can't stop.
It's a mix of a business story and a real life thriller book.
I was wondering if anyone  can shine a bit more light on the connections between different characters in the story.
This is where I got so far on the business front :
Warren Buffett started investing in GEICO around the time Ben Graham was on the board, in 1975 John J. Byrne (Patrick's dad) was appointed the CEO of GEICO after it stumbled into some troubles and started a turnaround, Buffett was impressed and bought a position (eventually buying the entire company), he even went on to say that John was the "Babe Ruth of insurance." After retiring from GEICO John Byrne was invited to run the troubled Fireman's Fund, then a subsidiary of American Express. Fireman's had incurred $356 million in pretax losses in 1983 and 1984. Byrne vastly improved Fireman's financial performance and initiated a public offering of some of Fireman's shares in 1985. The company was sold to Allianz AG in 1991. Byrne retained the Fireman's holding company, which he later renamed as White Mountains Insurance Group. Allan Mecham (Arlington Value Management / Capital) is known on this board and he invest both in White Mountains, Overstock and Fairfax.
Fairfax is a long time investor in Overstock and they are known for their bet on the housing market. Someone also known for his bet on the housing market is Michael Burry of Scion Capital that was featured on the movie the big short. White Mountains were investors in Scion Capital and Scion Capital were investors in Overstock. Patrick grew up with "Uncle Buffett" and later on after he got his PhD he ran a subsidiary of Berkshire Hathaway before moving on to start Overstock. John Byrne was on the board of Overstock but due to a disagreement with his son about the time he spends about fighting wall street and naked shorting he resigned.

I would be glad to hear if I misses something regarding the investors / characters in the story of overstock and the connections between them.
Title: Re: OSTK - Overstock.com
Post by: spark411 on January 21, 2018, 06:55:16 AM
Few things I would add.
1.  I read somewhere that Byrne's grandfather was the head of the SEC at one time.
2.  Byrne referred to a "birdie" in Omaha who advised what aspect of the financial market needed most attention.
3.  Byrne has intimate knowledge of SEC/trading because he has been in knee deep legal battles for years.

If there is anyone with the perfect background and in place relationships to disrupt entire financial markets, Patrick Byrne is a good guy to bet on.

I've been a holder of OSTK for 7+ years.   The #1 reason is Patrick Byrne and his background/relationships.
Title: Re: OSTK - Overstock.com
Post by: no_free_lunch on January 21, 2018, 08:46:59 AM
I own a position in OSTK so I am talking against my book here.  I have to say that I don't see what you guys see in Byrne.  I can't disagree with the pedigree but this link to Berkshire and affiliates is over a decade old.  At this point we should judge based on Byrne's performance with Overstock.  In my mind it hasn't been that spectacular.   Maybe it's just a really tough industry but that is the one he chose.

His commentary on bitcoin in conference calls is very high level and company promotional.  You see this with other successful entrepreneurs such as Musk but at least with Musk I have seen him deliver.  The history is all I have to go on, otherwise I don't know how to tell whether he can get operations going.  It is one thing to announce an idea and another to get it working.  Perhaps the stock lending thing is really moving, I don't have a way to gauge it and I guess that will come out next quarter but for now I am cautious on this one.

I know it's a small thing but that bug with bitcoin cash annoyed me.  They use a third party for the actual bitcoin transactions and it is alledged that they didn't use the API return calls properly.  As a result some researcher found a way to put transactions through using bitcoin cash instead of bitcoin without them immediately detecting it.  I think they have fixed it but really, these are the guys at the forefront of bitcoin technology?
Title: Re: OSTK - Overstock.com
Post by: WneverLOSE on January 21, 2018, 10:28:51 AM
Well I'm agnostic about him, I don't like him or hate him, I don't know nearly as much as I should to have an opinion. I started taking interest lately after seeing some of the connections that I outlined and I just read about him and his company. What I do like is his intelligence, I don't think anyone can deny he is one smart cookie. The thing that I don't like is his behavior, Taking an ad on the wall street journal https://qzprod.files.wordpress.com/2013/07/screen-shot-2013-07-27-at-3-36-03-pm.png?w=640 (https://qzprod.files.wordpress.com/2013/07/screen-shot-2013-07-27-at-3-36-03-pm.png?w=640) taunting Steve Cohen (Even if the "Sith Lord" did everything Patrick claims it makes him look very bad) or sending an email to a fortune reporter asking her "why exactly did you become a reporter? Giving Goldman traders blowjobs didn't work out?" is no way to behave by my book even if she made fun or smirky remarks regarding his cancer.
Title: Re: OSTK - Overstock.com
Post by: mwtorock on January 21, 2018, 07:34:32 PM
I think some people are born as fighters and Patrick Byrne is one of those. Maybe he was also a spoiled child. This kind of people cant take any injustice in life. They fight even it seems no chance of winning.

I have the same concern about execution here. He may be a brilliant visionary leader in the crypo world, but we still need to see good executions. To be fair, the T0 acquisition already paying off (I was not expecting that or at least not so soon).

Also he still has much skin in this, so his best interest is aligned with shareholders...

Title: Re: OSTK - Overstock.com
Post by: marcosc on January 22, 2018, 01:16:33 AM
I know it's a small thing but that bug with bitcoin cash annoyed me.  They use a third party for the actual bitcoin transactions and it is alledged that they didn't use the API return calls properly.  As a result some researcher found a way to put transactions through using bitcoin cash instead of bitcoin without them immediately detecting it.  I think they have fixed it but really, these are the guys at the forefront of bitcoin technology?

There's lots of reasons to dislike OSTK, but this seems rather silly. It's akin to saying Google should have no business running search and cloud given a bug in their domain registration service allowed a third party to hijack the google.com domain name (!!) (http://uk.businessinsider.com/this-guy-bought-googlecom-from-google-for-one-minute-2015-9?r=US&IR=T) If anything, I think the BCH bug is just proof that no one really uses these cryptos to actually pay for goods/services, as it would probably have been detected long ago...
Title: Re: OSTK - Overstock.com
Post by: Parsad on January 22, 2018, 01:25:57 PM
Well I'm agnostic about him, I don't like him or hate him, I don't know nearly as much as I should to have an opinion. I started taking interest lately after seeing some of the connections that I outlined and I just read about him and his company. What I do like is his intelligence, I don't think anyone can deny he is one smart cookie. The thing that I don't like is his behavior, Taking an ad on the wall street journal https://qzprod.files.wordpress.com/2013/07/screen-shot-2013-07-27-at-3-36-03-pm.png?w=640 (https://qzprod.files.wordpress.com/2013/07/screen-shot-2013-07-27-at-3-36-03-pm.png?w=640) taunting Steve Cohen (Even if the "Sith Lord" did everything Patrick claims it makes him look very bad) or sending an email to a fortune reporter asking her "why exactly did you become a reporter? Giving Goldman traders blowjobs didn't work out?" is no way to behave by my book even if she made fun or smirky remarks regarding his cancer.

Patrick is an Irish brawler...he's fought all his life and will continue to do so...it's in his DNA.  You might not be fond of those comments or the stance he took, but without Overstock's lawsuits and Fairfax's lawsuits, you would not have seen the changes at the DTC and the end of naked shorting on Wall Street. 

John Byrne subsequently admitted he should have supported his son and he was right.  Buffett also said he didn't see naked shorting as a problem...if you run Berkshire Hathaway and are in the enviable financial position that Berkshire is in, of course you don't see a problem.  But it certainly existed, and there were many people who were taking advantage of companies in vulnerable positions due to an external or internal event.

In terms of the Sith Lord comment...Byrne was simply alluding to a significant player supporting a broad agenda of naked shorting and pulling strings behind the scene.  And as we know, Sith Lords always come in pairs...so Cohen was only one of the players.  The other one is now simply viewed as a renowned philanthropist and didn't get sucked into the lawsuits or SEC prosecutions. 

Byrne the CEO is an acquired taste.  I think he's been a far better visionary than operator.  The one thing shareholders in any Byrne vehicle will get is an honest CEO who will only benefit if his shareholders benefit...now that must be worth something!  Cheers!
Title: Re: OSTK - Overstock.com
Post by: spark411 on January 22, 2018, 02:52:18 PM
The reason that OSTK has been a good investment and not just a good company is Patrick Byrne.  I've written why it's a good company but the great thing about OSTK has been the buying opportunities that have existed because of Patrick Byrne.

As many have posted, Patrick Byrne is eccentric and tends to push his agenda/ideals a little too far.    This personal weakness causes this stock to go down more than it should.  The "more than it should" is the very reason this stock creates opportunities for retail investors.  Just two years ago, this stock graded above $24 and then went down to $12!  Just a few months ago, this stock goes from $70 to $45 and now above $80.  The business itself had not changed much.   I would argue that the moat and intrinsic value continues to grow.

Right now, I think the stock is fully valued.   I am waiting for Patrick Byrne to do something else crazy that creates a lot of noise so that it spooks investors and lowers the stock price materially.    :)


Title: Re: OSTK - Overstock.com
Post by: no_free_lunch on January 24, 2018, 10:11:06 AM
Tzero put in an SEC submission yesterday.   They have now sold $38M of the $250-300M in tzero tokens.  I am not sure about how this all works with timing but does this not concern others, especially given the stock price?  I have a small position but am thinking of closing given that without this ICO being a huge success it is hard to justify the current stock price.  Happy to hear counter-arguments.

https://www.sec.gov/Archives/edgar/data/1726726/000172672618000005/xslFormDX01/primary_doc.xml
Title: Re: OSTK - Overstock.com
Post by: rkbabang on January 24, 2018, 11:28:06 AM
Tzero put in an SEC submission yesterday.   They have now sold $38M of the $250-300M in tzero tokens.  I am not sure about how this all works with timing but does this not concern others, especially given the stock price?  I have a small position but am thinking of closing given that without this ICO being a huge success it is hard to justify the current stock price.  Happy to hear counter-arguments.

https://www.sec.gov/Archives/edgar/data/1726726/000172672618000005/xslFormDX01/primary_doc.xml


$38,469,716 from 178 investors. That's an average of $216k per investor.  I wonder how many investors they have opened this up to?  I signed up in the beginning of December and I haven't been allowed to invest yet.  Most ICOs open up to everyone on day 1, I wonder why they are doing it this way?
Title: Re: OSTK - Overstock.com
Post by: rkbabang on January 26, 2018, 05:28:58 AM
The latest email from SAFTLaunch about the tZERO ICO.  More delays:

"Many of you have already completed your KYC/AML on the platform, but we are currently waiting on a number of investors to finalize the process, particularly foreign investors that need their accreditation. As a courtesy to all potential investors who have been invited to this select group, we are extending the launch date of the main sale. Please check your inbox over the next 48 hours for an email from SAFTLaunch.com alerting you that the offering period in which you may participate has opened."
Title: Re: OSTK - Overstock.com
Post by: no_free_lunch on January 26, 2018, 06:39:49 AM
Well I am not as concerned if it is just a delay in processing accreditation.  Does this mean your window got moved back?
Title: Re: OSTK - Overstock.com
Post by: writser on January 26, 2018, 07:09:25 AM
https://medium.com/@MidwesternHedgi/overstocks-patrick-bryne-s-promotion-of-tzero-is-false-and-misleading-406eccd8d636
Title: Re: OSTK - Overstock.com
Post by: rkbabang on January 26, 2018, 07:29:01 AM
Well I am not as concerned if it is just a delay in processing accreditation.  Does this mean your window got moved back?

Yes, but I don't understand why they are doing this.  I was first told middle of December, then that got moved to middle of January, then that got moved to the 26th (today), now it is being moved again.

I've participated in ICOs before.  And how it usually works is that on a certain date it is open to everyone and on a certain date it closes for everyone.  Why this grouping and windowing?  Why a few hundred select investors first then others later?   Wouldn't it be in tZERO's interest to let as many people invest as soon as possible?
Title: Re: OSTK - Overstock.com
Post by: RichardGibbons on January 26, 2018, 09:13:23 AM
I suspect the difference is that most ICOs completely ignore US securities regulations, while Overstock is at least paying some attention to those regulations.
Title: Re: OSTK - Overstock.com
Post by: KinAlberta on January 29, 2018, 09:45:42 AM
"OSTK stock is making promises it can't keep"

I saw this byline and thought; Oh, let's read this article. However, as usual, considerable disappointment in the quality of supposedly professional unbiased writing. In this case, disappointment with the all too common pairing up of statements out of their own context with a counterpoint tagged on, which in light of their slight-of-hand pairing, may or may not be valid.

Example: “I’m telling you we have an invention – we’re going after 75% of Goldman’s revenue,” he said on the call. Earlier, he said “I suspect [securities lending] may be 100% of the profits at Goldman Sachs.”





Anyway, everyone's thoughts on the rest of the opinion piece would be most welcome.

Quote
Overstock.com Inc Stock Is Overvalued, but Short at Your Peril
OSTK stock is making promises it can't keep

By VINCE MARTIN, InvestorPlace Contributor
Jan 29, 2018, 6:51 am EST

But there’s a larger concern here. Byrne tends to oversell his case. Multiple times on the call – and elsewhere, as a blogger has pointed out – Byrne dropped the “prime brokerage” qualifier:

“I’m telling you we have an invention – we’re going after 75% of Goldman’s revenue,” he said on the call. Earlier, he said “I suspect [securities lending] may be 100% of the profits at Goldman Sachs.”

Byrne may be misspeaking but investors are incorrectly taking him literally. Prime brokerage is only a part of Goldman’s Securities Services business, which generated just 11% of the company’s total 2016 revenue, per the 10-K.


https://investorplace.com/2018/01/ostk-stock-overvalued-short/#.Wm9bDCMZNR4



Bolding is mine


Per a quick Google search (below):

Quote

8-K
OVERSTOCK.COM, INC filed this Form 8-K on 11/14/2017

"I'm going to show you a piece of paper that cost you, the shareholders, $20 million to see. That's how much it cost for us to get this piece of paper. This comes, sometimes it's slow, I'm told. Okay. I can legally show this. This came out of that lawsuit. This is from Goldman Sachs. How much of Goldman Sachs prime brokerage actually comes from this thing called securities lending? The answer turns out to be 75% of American prime brokerage revenue. "

...

"we found the pipe that was really the pipe of 75% of the revenue of Goldman Sachs' prime brokerage in the United States."

...

"It's based in the blockchain, no SEC audits and finding Daffy Duck and Mickey Mouse. Everything is 1:1, rigid, blockchain, immutable, secure, transparent to regulators. It's such a brilliant, I mean, such an invention. The idea that we have this, basically, in short, I'm telling you we have an invention; we're going after 75% of Goldman's revenue. We're going after, directly after, and the market has learned all about this, they really have. We are hearing from so many clients of prime brokers; I love this. I was just in New York, ..."





http://investors.overstock.com/mobile.view?c=131091&v=202&d=3&id=aHR0cDovL2FwaS50ZW5rd2l6YXJkLmNvbS9maWxpbmcueG1sP2lwYWdlPTExODk0MzEwJkRTRVE9MiZTRVE9MTAmU1FERVNDPVNFQ1RJT05fUEFHRSZleHA9JnN1YnNpZD01Nw%3D%3D


again, bolding is mine
Title: Re: OSTK - Overstock.com
Post by: no_free_lunch on January 29, 2018, 10:06:07 AM
So 75% of GS prime brokerage business is alledgedly related to securities lending.   How much is GS prime brokerage revenue?
Title: Re: OSTK - Overstock.com
Post by: KinAlberta on January 30, 2018, 09:00:47 AM
I'm not sure how this might fit into the scheme of things but it's interesting.

Quote
Who owns blockchain? Goldman, BofA amass patents for coming wars
By Olga Kharif BLOOMBERG NEWS  DECEMBER 28, 2016

"In the headlong rush to revolutionize modern finance, blockchain enthusiasts are overlooking one potentially costly problem: Their applications, built on open-source code, may actually belong to someone else.

Recently, some of the biggest names in business, from Goldman Sachs to Bank of America and Mastercard, have quietly patented some of the most promising blockchain technologies for themselves. Through mid-November, the number of patents that companies have obtained or said they’ve applied for has roughly doubled since the start of the year, according to law firm Reed Smith. ..."

https://www.bostonglobe.com/business/2016/12/27/who-owns-blockchain-goldman-bofa-amass-patents-for-coming-wars/wIN4xlb7yqst5BqPlZOVEJ/story.html

Title: Re: OSTK - Overstock.com
Post by: Schwab711 on January 30, 2018, 09:10:18 AM
A summary of misleading statements by OSTK:
https://medium.com/@MidwesternHedgi/overstocks-patrick-bryne-s-promotion-of-tzero-is-false-and-misleading-406eccd8d636
Title: Re: OSTK - Overstock.com
Post by: KinAlberta on January 30, 2018, 11:06:49 AM
A summary of misleading statements by OSTK:
https://medium.com/@MidwesternHedgi/overstocks-patrick-bryne-s-promotion-of-tzero-is-false-and-misleading-406eccd8d636

Thanks for posting. Interesting. So here's the first one with footnote links included.

Any thoughts on his statements and the context of his discussion. Also posting an article about the lawsuit he's referencing. (All about something I don't want to have to follow.)

Quote

Byrne false claim #1: Overstock.com spent $30 million in litigation to learn a secret, that 75% of the revenue of Goldman Sachs and 75% of the revenue of Wall Street banks is from securities lending.

In Byrne’s tZERO presentations, he explains Wall Street’s “big secret,” namely that he claims the majority of investment banks’ revenue comes from securities lending. He typically first states that 75% of prime brokerage revenue comes from securities lending, but then consistently and repeatedly presents that statistic as 75% of Goldman Sachs’ revenue and/or “75% of the revenue of Wall Street”; for example: “Seventy-five percent of Goldman Sachs’ revenue comes from an activity that they have kept, that has been obscured from the public. It’s called securities lending.”[ii]

...
Blockchain in Business: Overstock and tZERO — Patrick Bryne. September 21, 2017 (published Nov 2, 2017) at https://www.youtube.com/watch?v=COQvMsbb-Cw&t=11m35s [11:39, 15:59] and
https://www.youtube.com/watch?v=HTbE8DXyjG8 [1:40:53, others]

[ii] Blockchain in Business: Overstock and tZERO — Patrick Byrne. September 21, 2017 (published Nov 2, 2017) at https://www.youtube.com/watch?v=COQvMsbb-Cw&t=4m35s [04:35]


Blockchain in Business: Overstock and TZero - Patrick Bryne
https://www.youtube.com/watch?v=COQvMsbb-Cw&t=11m35s


Quote
#BUSINESS NEWS
AUGUST 17, 2017 / 2:46 PM / 5 MONTHS AGO
U.S. pension funds sue Goldman, JPMorgan, others over stock lending market

"(Reuters) - Three U.S. pension funds sued six of the world’s largest banks on Thursday, including Goldman Sachs Group Inc (GS.N) and JP Morgan Chase & Co (JPM.N), accusing them of conspiring to stifle competition in the more than $1 trillion stock lending market."

...

The Iowa Public Employees’ Retirement System, Orange County Employees’ Retirement System and Sonoma County Employees’ Retirement Association said in the lawsuit that the banks have cornered the market on stock lending in violation of federal antitrust law.

“Through various improper means, the likes of Goldman Sachs and Morgan Stanley have for years colluded to maintain their power over this little-known-but-lucrative corner of Wall Street,” said Michael Eisenkraft, a lawyer for the funds and partner with Cohen Milstein.

...

The funds claimed in the lawsuit that the defendants conspired to take down upstart stock lending platforms AQS, which was developed by Quadriserv Inc, and SL-x, which would have allowed lenders and borrowers to interact directly.

The lawsuit claimed that in 2012 Goldman Sachs threatened to stop doing business with Bank of New York (BNY) Mellon if it continued to support the AQS platform and that the bank agreed to stop using it. BNY Mellon declined to comment.

The lawsuit said that through a joint project called EquiLend LLC, the banks purchased SL-x’s intellectual property and shelved it, according to the lawsuit. The funds accused ..."



https://www.reuters.com/article/us-stocklending-lawsuit/u-s-pension-funds-sue-goldman-jpmorgan-others-over-stock-lending-market-idUSKCN1AX2NK

Title: Re: OSTK - Overstock.com
Post by: no_free_lunch on February 05, 2018, 10:30:11 AM
rkabang,

Did you ever get your tzero tokens?  Or did you at least get your window?
Title: Re: OSTK - Overstock.com
Post by: rkbabang on February 05, 2018, 03:41:56 PM
rkabang,

Did you ever get your tzero tokens?  Or did you at least get your window?

No word on the window yet.
Title: Re: OSTK - Overstock.com
Post by: rkbabang on February 13, 2018, 08:27:44 AM
rkabang,

Did you ever get your tzero tokens?  Or did you at least get your window?

No word on the window yet.

My window is finally open and I received a 286 page white paper in PDF format to go through a few days ago. I've read about half of it so far.  I'd post it if it wasn't for the non-disclosure agreement.  It is basically the plans for a blockchain trading platform.   I'll be able to buy tokens through the ICO at $8 per.   77% of the tokens will be sold in the ICO the rest will be held by the company.  The plan is to have the tokens pay a dividend once t0 is profitable.  10% of adjusted gross revenue quarterly.  I'm still reading, much of it is technical so slow going.  I haven't made any decisions yet.
Title: Re: OSTK - Overstock.com
Post by: Liberty on March 01, 2018, 05:43:25 AM
https://www.coindesk.com/overstock-confirms-250-million-tzero-ico-sec-review/
Title: Re: OSTK - Overstock.com
Post by: mwtorock on March 01, 2018, 06:05:51 AM
the headlines are going to be scary today about OSTK. but they have been waiting for this?  they wanted the regulators to clean up the field for a long time now.
Title: Re: OSTK - Overstock.com
Post by: Liberty on March 15, 2018, 03:56:48 PM
-13% after-hours on Q4 results:

http://investors.overstock.com/phoenix.zhtml?c=131091&p=irol-newsArticle&ID=2338378

Quote
FY 2017 revenue of $1.7 billion (-3% growth) and pre-tax loss of ($47.7) million
Q4 2017 revenue of $456 million (-13% growth) and pre-tax loss of ($24.9) million
Title: Re: OSTK - Overstock.com
Post by: Liberty on March 27, 2018, 06:15:34 AM
4m shares offering with 600k option for more:

https://seekingalpha.com/pr/17112023-overstock-com-announces-proposed-public-offering-common-stock
Title: Re: OSTK - Overstock.com
Post by: mwtorock on March 27, 2018, 08:24:46 AM
wondering who are the buyers of this offering... it is more than 10% if it all goes to one buyer... and who are these buyers can 'bring something to the table'?  :P

Maybe they just need the cash to burn for all these investments...
Title: Re: OSTK - Overstock.com
Post by: Foreign Tuffett on July 11, 2018, 09:16:19 PM
6/29: OSTK announces that GSR Capital will purchase $160 million in tZero tokens

7/2: Nissan Motor cancels planned $1 billion sale of its electric car battery unit to GSR, claiming that GSR lacked the funds to complete the purchase, despite the deal close being delayed several times

https://asia.nikkei.com/Business/Business-Deals/Nissan-cancels-900m-sale-of-battery-subsidiary-to-China-s-GSR (https://asia.nikkei.com/Business/Business-Deals/Nissan-cancels-900m-sale-of-battery-subsidiary-to-China-s-GSR)


I go to GSR's website and the most recent PR (dated 8/8/2017) is titled "GSR Capital Acquires Nissan’s Battery Business."

GSR is based in Beijing and Hong Kong, but claims to have an office in Palo Alto, CA. The phone # listed is 1-650-331-7300. I Google'd this # and the first result is Sunsun Lighting Co. Sunsun looks like a company that GSR made a venture capital type investment in some years ago.

Then I Google'd the fax number (1-650-331-7301) GSR lists for its Palo Alto office. The first result is DHVC (aka "Danhua Capital"), an unaffiliated Chinese venture capital-outfit.

Seems legit........