Author Topic: OSTK - Overstock.com  (Read 144661 times)

Parsad

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Re: OSTK - Overstock.com
« Reply #90 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!
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ValueCarl

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Re: OSTK - Overstock.com
« Reply #91 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!  >:( 

Parsad

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Re: OSTK - Overstock.com
« Reply #92 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!
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ValueCarl

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Re: OSTK - Overstock.com
« Reply #93 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?         

alertmeipp

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Re: OSTK - Overstock.com
« Reply #94 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.



alertmeipp

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Re: OSTK - Overstock.com
« Reply #95 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.

Parsad

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Re: OSTK - Overstock.com
« Reply #96 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!   
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stahleyp

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Re: OSTK - Overstock.com
« Reply #97 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. "
Paul

alertmeipp

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Re: OSTK - Overstock.com
« Reply #98 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?

ValueCarl

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Re: OSTK - Overstock.com
« Reply #99 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.
« Last Edit: March 07, 2012, 08:36:25 PM by ValueCarl »