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Showing posts from November, 2010

California District Attorneys Sue Overstock.com for Defrauding Consumers While the SEC Finds New Disclosure Problems

Last week, district attorneys from seven California counties sued Overstock.com (NASDAQ: OSTK) alleging that the company has engaged in fraudulent pricing practices after a two year investigation. The lawsuit alleges that:
9. Beginning on a date no later than January 1, 2006, Overstock routinely and systematically made untrue and misleading comparative advertising claims about the prices of its products.

[Snip]

11. …Overstock used various misleading measures to inflate the comparative prices, and thus artificially increase the discounts it claimed to be offering consumers.

[Snip]

22. Often Overstock has not been determining or verifying the price other merchants charge for those identical products. Rather, Overstock has been using various misleading methods to make up its own “straw-man” prices which it claims other merchants are charging for those products, and then claiming that its own prices are significantly lower.

23. Overstock has advertised comparative prices which do not exis…

Patrick Byrne Absent From Third Quarter Earnings Call

Updated on 11/12/10 to include other blog feedback

Yesterday, Overstock.com (NASDAQ: OSTK) finally held its scheduled conference call with analysts to discuss the company's dismal third quarter earnings report which was released last Friday. On that day, Overstock.com stunned investors and reported a Q3 2010 $3.381 million loss or a loss of $0.15 per share compared to a Q3 2009 reported loss of $1.379 million or a loss of $0.06 per share. It was the second consecutive quarter that Overstock.com failed to meet Wall Street analysts’ consensus expectations for earnings.

However, instead of facing the music, Overstock.com CEO Patrick Byrne was absent from the call. According to company President Jonathan Johnson:
Patrick Byrne, he is not with us today. He came in this morning and took ill and is unable to be on the call and he apologizes. So Steve and I will go forward without him. The onset of such sudden illnesses is common among the targets of an SEC investigation, like Patrick…

More Trouble for Overstock.com and Patrick Byrne after Dismal Third Quarter Report

Updated on 11/03/2010 at bottom of post

Two consecutive failures to meet Wall Street analysts’ consensus expectations

Last Friday morning, Overstock.com (NASDAQ: OSTK) stunned investors and reported a Q3 2010 $3.381 million loss or a loss of $0.15 per share compared to a Q3 2009 reported loss of $1.379 million or a loss of $0.06 per share. The company failed to meet Wall Street consensus analysts' expectations for earnings, too.

Overstock.com’s reported loss of $0.15 per share was five times greater than analysts' expectations of a $0.03 per share loss. That same day, shares of Overstock.com tumbled $2.46 per share or 15.5% lower to close at $13.41 per share. The company’s market capitalization (shares outstanding multiplied by the market price per share) dropped over $55 million in a single day.

It was the second consecutive quarter that Overstock.com failed to meet Wall Street analysts’ consensus expectations for earnings.

Previously, Overstock.com reported a Q2 2010 loss of $…