Skip to main content

Posts

Showing posts from September, 2008

Are Bidz.com's Stock Buy Backs a Wise Move?

Why are Bidz.com (NASDAQ: BIDZ) insiders selling shares as the company is buying back shares, especially when management has claimed that the company’s shares are undervalued? Legendary investor Warren Buffett, CEO of Berkshire Hathaway (NYSE: BRKA), was once said:Now, repurchases are all the rage, but are all too often made for an unstated and, in our view, ignoble reason: to pump or support the stock price... We will not repurchase shares unless we believe Berkshire stock is selling well below intrinsic value, conservatively calculated."Note: Bold print and italics added by me.Does Bidz.com’s share repurchase program really build “intrinsic value” or is it a short-term ploy “to pump or support the stock price” as insiders sell their shares?During the Q2 2008 earnings call, CFO Lawrence Kong claimed:As of July 31, 2008, we had repurchased a total of approximately 1,024,000 shares in the open market for a total of $8.8 million at an average price of $8.58 per share. We continue t…

What Utah Attorney General Mark Shurtleff Does Not Want Anyone to Know

One of the many divisions reporting to Utah Attorney General Mark Shurtleff is the Tax and Revenue Division. According to the Utah Attorney General’s Office web site, the Tax and Revenue Division:Represents the Tax Commission, Department of Financial Institutions, the Insurance Department and state agencies that issue bonds andHandles tax litigation and bankruptcy.
In particular, the web site boasts that, “Attorneys in the Tax and Revenue Division provide legal support for the [Utah] Tax Commission.” The web site goes on to claim that the Tax Division is “is vigilant about auditing and collecting taxes so honest taxpayers do not have to pay an unfair share of the state's expenses.” In other words, Utah Attorney General Mark Shurtleff is in charge of all litigation involving the collection of state taxes.

We need to ask, “How diligent Mark Shurtleff is in paying his own taxes in the past?”

From 1990 to 1993, Mark Shurtleff was a private practice trial lawyer in California. Was he star…

Bidz.com: Questionable and Inconsistent Inventory Disclosures

In previous blog posts, I raised questions about Bidz.com’s (NASDAQ: BIDZ) compliance with GAAP in valuing inventories and the company’s history of inconsistent inventory disclosures. In Bidz.com’s latest 10-Q report for Q2 2008, the company has changed its inventory disclosures yet again. See the comparison of Bidz.com's Q2 2008 and Q1 2008 inventory disclosures below: Bidz.com Q2 2008 10-Q: Inventories Inventories consist mainly of merchandise purchased for resale and are stated at the lower of first-in, first-out (FIFO) cost or market. Inventory ReserveThe unique nature of our business model where customers set the prices they are willing to pay may result in items selling below our cost, and we provide reserves against our inventory based on the difference between the average selling price and the cost of inventory if the average selling price is lower than the cost of inventory. We also provide reserves for obsolescence and slow moving inventory. Note: Bold print and italics …