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Showing posts from March, 2012

New Allegations of Fraud Against Green Mountain Coffee Roasters in Amended Class Action Complaint

Yesterday, class action lawyers filed a proposed second amended complaint against Green Mountain Coffee Roasters (NASDAQ: GMCR) alleging violations of various federal securities laws. In January 2012, the Judge dismissed that class action lawsuit, but allowed the plaintiff's lawyers to re-file an amended complaint. The proposed amended complaint cites additional allegations of fraud by the company. Most important, it provides new and more detailed information from various confidential witnesses who claim to have direct knowledge of certain alleged frauds that was not contained in the previous complaint. In addition, the amended complaint cites certain forensic accounting analysis provided by this blog, a report by money manager David Einhorn, and analysis provided by other bloggers. The Securities and Exchange Commission is investigating the company. A marked copy of the proposed amended complaint can be downloaded here and is available for reading below.

2012 03-27 Horowitz vs Gre…

Is Overstock.com in a Death Spiral?

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. Instead it only provided key metrics of its fourth quarter numbers and presented a full year income statement. For the entire year, Overstock.com reported a net loss of $19.4 million compared to net income of $13.9 million in the previous year. Its 2011 revenues decreased 3% to $1.054 billion compared to $1.090 billion in the previous year.

As of December 31, 2011, the company reported a net working capital deficit (current assets less current liabilities) of $14.1 million. Overstock.com's negative net working capital balance indicates that it’…