OSTK ceo

We'll see today. You seem way too optimistic on this matter for your own good.

 

in and out. And I know too much about the matter for my own good., because in the end, it's good for no one. It's simple fraud on a scale never seen. You;'ll see all too quickly.

 

the ostk ceo should shut up. ostk is being helped by the short base. without shorts this stock would be less than 20. it really is a crappy company.

 

Anybody that complains about short selling knows nothing about mkt mechanics. Try and tell this guy they are creating liquidity in his name and he will summon the force to fight your evil empire....

 

I haven't checked this case in a week or two now, but the original concern wasn't about shorting. The dude is compaining about naked shorting, which is illegal. When he can account for %90 of the shares outstanding, and there are 6 million shares short on book, something like 4 million larger than the float, there is obviously something wrong. This is a game that has been going on for YEARS, and just like the wave of front runners being burned at the NYSE, and the CEO's using "special vehicles" to transfer risk off book being burned in companies like Enron et al, this will too come to an end eventually. The era of insiders on Wall Street dominating via unfair advantages is coming to an end.

-The New Guy

 

clearly naked shorting is illegal...but they still have to be taken in......and thats alot of stock. mkt dynamics will dictate value. Even if the naked shorts came in and sold with impunity down to absurdly low value levels don't you think value guys would step in and buy up the sale price?
Its my contention that his stock is valued much less than current levels and this is his way of sustaining it.

Just an opinion...

 

That's not my impression at all. In one of the conference calls the CEO states that he WANTS the market to determine the price of the stock, not the manipulators. He understands the company is not doing stellar, and the price is definately going to reflect that. But when hedgies can make up and short 4 million shares that don't exist, there is no way anyone can say that is not unfair to the company.

Yes, they still have to be taken in, but not until all the regular longs get tired of that crap and bail. That's why the CEO is asking everyone to call in their certificates. If everyone did that we'd see who was totally screwed because they sold bogus shares.

The CEO said in one of his interviews that this isn't about his company, this type of activity is a threat to entrepreneurship in the US today. Can you imagine spending the time and going through the struggle to create a company only to be wiped out by something that is illegal, and BLATANTLY obvious? That really is a threat to the US economy, in my opinion.

-The New Guy

 

talk about manuplitation. this is interesting.

Is There A Disclosure Issue Here?


On Friday at 4:01 PM, Overstock.com issued the following press release, in bold italics, with commentary from the author of this blog.

Overstock.com Overstocked With Bargains
Friday September 16, 4:01 pm ET

Interesting timing—4:01 Eastern Standard Time on the Friday of September options expiration. Did the facts really not come to light sooner than the market close at 4:00 PM on option expiration day?

Is there a disclosure here?
SALT LAKE CITY, Sept. 16 /PRNewswire-FirstCall/ -- Popular online retailer Overstock.com® (Nasdaq: OSTK - News) today announced a mass upload of new inventory for sale on its website.

Quite a bland way to begin a press release that announces (later in the text) “sharply” slowed sales, “inefficiencies” and “downward pressure on gross margins.”

Is there a disclosure issue here?

The $30 million (retail value) upload of jewelry, apparel, home, electronic and other products far exceeds any single upload in Overstock.com's corporate history (by a large multiple). As always, these products will be priced to move and will sell out on a first-come first-serve basis.


Inventory glitches are, generally speaking, not a good thing for a retailer.

Why, just the day before this release, Tad Martin (Overstock’s own SVP of Merchandising) noted on a conference call with investors that “Inventory is not like wine—it does not get better with age.”

Martin made no reference to the $30 million “mass upload” of inventory that would be announced on September 16th, the very next day.

Is there a disclosure issue here?

As previously announced, Overstock.com is completing a massive upgrade to its IT infrastructure. In working through the implementation of these new systems, the company has not loaded new products from its warehouse and fulfillment partners onto the website for nearly five weeks, several weeks longer than the company had anticipated.

On conference calls and in shareholder letters, Byrne has given the impression—at least to Wall Street’s Finest, none of whom raised any red flags—that the IT upgrade was largely complete.

But don't take my word for it. This is the way Patrick describes the situation to shareholders in his August 3rd letter to investors:

I believe we have found a healthy balance among the three (growth, infrastructure, and new programs), and am particularly glad that we have super-sized our systems over the last three quarters, as it gives them a quarter to harden before the next holiday wave hits.

No word about the problems that stopped five weeks worth of inventory from being “uploaded.”

Is there a disclosure issue here?

"This upgrade was the equivalent of a heart, lung and kidney transplant," said Patrick Byrne, president of Overstock.com. "The replacement of the core technology infrastructure, which I have discussed at length in my quarterly letters, prevented us from uploading new items to the website for the past five weeks.”

Patrick did indeed discuss “at length” the infrastructure replacement, especially in the second quarter letter. Here’s a sample:

Oracle 10g -- Over the course of May and June, all components with the exception of the B2C shopping site itself rolled from Oracle 9i to 10g running on our new IBM P5's AIX. We expect to do this last piece in August (and will be down for 30-120 minutes some night as we do it).

This transition has been remarkably smooth.

From a “remarkably smooth” transition on August 3rd to a five week inventory “uploading” disruption disclosed on September 16th.

Is there a disclosure issue here?

However, while the operation was going on, our buyers, copywriters and warehouse staff continued to make purchases, prepare postings and stock our warehouse -- which is now stuffed to the gills. This presents our customers with a huge opportunity to find great selection and bargains, but when they're gone they're gone."

Yet on the day before this press release—September 15th—Overstock's Tad Martin had the following conversation with Stanford Group analyst Rebecca Jones Kujawa on her conference call with clients:

Rebecca: “What’s going on with the holiday season?”

Tad Martin: “We’re ready for the holidays. We made a decision earlier this year that with the amount of cash we had in the bank and the direction we were heading we’d rather be a little over-inventoried going into the Christmas season than under-inventoried, which all it means is we’re building inventory a little ahead of where we had the previous year. And what that allows us to do is to find some greater marketing opportunities—if the opportunity of a lifetime came in marketing, we’re not gonna be inventory constrained.”

Rebecca: “Is that inventory already up on the web site or are you kind of holding that back…”

Tad Martin: “No, no, no. As much as possible we try and flow our inventories through to the web site at the time. There’s no reason to hold inventory in your warehouse. Inventory is not like wine—it does not get better with age.”

From "we're building inventory a little ahead of where we would had the previous year" and “there's no reason to hold inventory in your warehouse” on September 15th to “our warehouse…is now stuffed to he gills” on September 16th.

Is there a disclosure issue here?

"These investments in technology, while incredibly expensive, are providing a foundation for the next five years, and will, I believe, generate huge dividends in customer satisfaction and loyalty. However, by preventing the posting of fresh inventory since early August, this transplant did shock our system."

Let’s consider the public appearances Patrick Byrne made, beginning in “early August” when, according to Byrne, the “transplant” began to “shock” the Overstock inventory system:

On August 3rd, Patrick Byrne holds an 85 minute earnings conference call with investors. He says “we should be able to do somewhere around 1.5 billion or more [sales] next year.”

On August 12th, Patrick Byrne holds a one hour “Sith Lord” conspiracy conference call with investors. He does not discuss revenue or earnings, but does mention Al Qaeda, cocaine, and Wayne and Garth.

On August 12th, Patrick Byrne appears for 15 minutes on CNBC discussing his “naked short-selling” conspiracy theory. In response to a question about Overstock’s profitability, he says “…what you’re gonna see us do is basically double on the top line…”

On August 16th, Patrick Byrne appears for 18 minutes on CNBC to debate his “Sith Lord” conspiracy theory and says “Somehow, in the face of all this poor performance we’ve grown from $2 million to basically a billion [in sales] this year…”

According to Friday’s press release, however, Overstock’s sales slowed “sharply” as a result
of the failure to “upload” inventory starting in “early August.”

Yet even on August 16th Byrne was telling CNBC viewers Overstock was growing to "basically a billion" in sales in 2005.

Is there a disclosure issue here?

"Investors should note that our restricted ability to post fresh inventory slowed sales sharply, a caesura from which we are now rebounding. In addition, the upgrade also caused inefficiencies that, when combined with our extended dollar shipping promotion, has put downward pressure on gross margins this quarter. However, my goal of growing 60% to 100% for the year at break even GAAP, +/- 1%, stands."

Fancy Latin words aside, the fact that “the upgrade also caused inefficiencies” had not, to my knowledge, been previously disclosed—either on the August 3rd call, the August 12th call, the August 12th CNBC appearance, or the August 16th CNBC appearance.

Not even on Tad Martin's September 15th conference call.

One more time: is there a disclosure issue here?

Jeff Matthews
I Am Not Making This Up

The content contained in this blog represents the opinions of Mr. Matthews. Mr. Matthews also acts as an advisor and clients advised by Mr. Matthews may hold either long or short positions in securities of various companies discussed in the blog based upon Mr. Matthews' recommendations.

 

If you read some of the stuff Byrne has put out he actually calls out Jeff Matthews on several occasions as one of the journalists who is paid to bash overstock. I am not prone to believe this, but when you read Jeff's stuff, you realize it makes absolutely no sense whatsoever, and VERY much looks like it's got only one objective, to put the fear of God into people who are long overstock. Look at how many times he repeated the line "is there a disclosure issue here?". No, there's no disclosure issue there. Nothing in that whole useless ramble even implies there is a disclosure issue there. Plus, Byrne is under an SEC investigation, do you think they'd miss that?

-The New Guy

 

this is by far the stupidest post i have yet to see on ET. illegal naked shorting is terrible for the market and for legit businesses. it is a criminal activity and should have been dealt with swiftly. LEGAL shorting provides liquidity and is good for the markets. where do these idiots come from???