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OSTK ceo
- Thread starter SWScapital
- Start date
how stupid was it for Byrne to buy back his own stock in the mid 40s? he is down 50%.
Overstocked With Fundamental Concerns
By TSC Breakout Stocks Team
2/6/2006 2:18 PM EST
Overstock.com (OSTK:Nasdaq - commentary - research - Cramer's Take) has been getting a lot of attention lately, but little of it focuses on the issues that really matter to shareholders. A closer examination of the online retailer's fundamentals reveals rapid revenue growth that has failed to yield profits, not an encouraging sign. In addition, Overstock's financial position may not be as strong as it may seem at first glance.
In our opinion, Overstock -- recently down 1.5% to $23.50 -- is best avoided ahead of its fourth-quarter report Tuesday morning.
Overstock secures inventory from retailers at discount prices, which it sells to consumers on its Web site. In its higher-margin fulfillment business, Overstock forms partnerships with retailers and manufacturers -- 380 third parties according to its 2004 annual report -- to sell products through its Web sites.
Overstock has experienced rapid revenue growth from these businesses, having generated $707 million in the 12 months ended Sept. 30 vs. just $25.5 million in 2001. (Overstock also runs an auction site, similar to eBay's (EBAY:Nasdaq - commentary - research - Cramer's Take), and operates in the travel business; neither is a meaningful revenue contributor at present.)
Unfortunately, this surge in revenue has not yielded much in the way of profits, due, in part, to a substantial increase in advertising spending. During the third-quarter 2005, sales and marketing expenses jumped 91% year over year to $17.96 million. The largest component of this expense was the $17.2 million the company spent on advertising, a 22% increase from the second quarter.
Sales were up 64% on a year-over-year basis and 12% sequentially to $169 million. While that's impressive on a stand-alone basis, the company posted an operating loss of $11.2 million, a loss 2.7 times wider than the year-ago period.
Things don't appear to be improving. On Dec. 27, Overstock lowered its financial expectations for the full year, saying that holiday sales were disappointing. Overstock said revenue would hit its target for an increase of 60% to 100% from year-ago levels, implying a revenue range of $790 million to $990 million. But the company said net income would be a percentage or two less than its prior target of break-even and operating cash flow will be negative.
Heavy Spending, Diminishing Returns
Overstock's heavy advertising spending has failed to yield profits
Year Revenue Operating Loss
2002 $91.8 million $4.1 million
2003 $238.9 million $12.4 million
2004 $494.6 million $5.4 million
2005 (TTM from Sept.) $707 million $18.4 million
Source: TheStreet.com
The revenue range implies a growth rate far superior to most companies in our coverage universe, but without profitability, that growth means very little. This leads us to doubt whether Overstock can ever leverage its sales growth into operating income, let alone net income.
Unfortunately for Overstock, things have gotten worse at an inopportune time. The company ended the third quarter with its highest inventory balance in its history at $94.6 million, up 172% from year ago levels and 58% from the second quarter. In an effort to move this inventory off its books, Overstock offered free shipping for much of December, which will likely weigh on fourth-quarter margins and cash flow. In other words, Overstock made a very bold bet on outstanding sales for the December quarter, and we don't believe it will pay off.
(more)
Overstocked With Fundamental Concerns
By TSC Breakout Stocks Team
2/6/2006 2:18 PM EST
Overstock.com (OSTK:Nasdaq - commentary - research - Cramer's Take) has been getting a lot of attention lately, but little of it focuses on the issues that really matter to shareholders. A closer examination of the online retailer's fundamentals reveals rapid revenue growth that has failed to yield profits, not an encouraging sign. In addition, Overstock's financial position may not be as strong as it may seem at first glance.
In our opinion, Overstock -- recently down 1.5% to $23.50 -- is best avoided ahead of its fourth-quarter report Tuesday morning.
Overstock secures inventory from retailers at discount prices, which it sells to consumers on its Web site. In its higher-margin fulfillment business, Overstock forms partnerships with retailers and manufacturers -- 380 third parties according to its 2004 annual report -- to sell products through its Web sites.
Overstock has experienced rapid revenue growth from these businesses, having generated $707 million in the 12 months ended Sept. 30 vs. just $25.5 million in 2001. (Overstock also runs an auction site, similar to eBay's (EBAY:Nasdaq - commentary - research - Cramer's Take), and operates in the travel business; neither is a meaningful revenue contributor at present.)
Unfortunately, this surge in revenue has not yielded much in the way of profits, due, in part, to a substantial increase in advertising spending. During the third-quarter 2005, sales and marketing expenses jumped 91% year over year to $17.96 million. The largest component of this expense was the $17.2 million the company spent on advertising, a 22% increase from the second quarter.
Sales were up 64% on a year-over-year basis and 12% sequentially to $169 million. While that's impressive on a stand-alone basis, the company posted an operating loss of $11.2 million, a loss 2.7 times wider than the year-ago period.
Things don't appear to be improving. On Dec. 27, Overstock lowered its financial expectations for the full year, saying that holiday sales were disappointing. Overstock said revenue would hit its target for an increase of 60% to 100% from year-ago levels, implying a revenue range of $790 million to $990 million. But the company said net income would be a percentage or two less than its prior target of break-even and operating cash flow will be negative.
Heavy Spending, Diminishing Returns
Overstock's heavy advertising spending has failed to yield profits
Year Revenue Operating Loss
2002 $91.8 million $4.1 million
2003 $238.9 million $12.4 million
2004 $494.6 million $5.4 million
2005 (TTM from Sept.) $707 million $18.4 million
Source: TheStreet.com
The revenue range implies a growth rate far superior to most companies in our coverage universe, but without profitability, that growth means very little. This leads us to doubt whether Overstock can ever leverage its sales growth into operating income, let alone net income.
Unfortunately for Overstock, things have gotten worse at an inopportune time. The company ended the third quarter with its highest inventory balance in its history at $94.6 million, up 172% from year ago levels and 58% from the second quarter. In an effort to move this inventory off its books, Overstock offered free shipping for much of December, which will likely weigh on fourth-quarter margins and cash flow. In other words, Overstock made a very bold bet on outstanding sales for the December quarter, and we don't believe it will pay off.
(more)
09:47 ET Overstock.com misses on revs, does not report Q4 bottom-line number, sees slower growth in Y06 (OSTK) 23.97 +1.22:Reports Y05 loss of $1.29, but does not report a Q4 loss actual. However, Y05 loss of $1.29 implies a Q4 (Dec) loss of $0.20 per share based on co's Q1, Q2 and Q3 actuals, may not be comparable to the Reuters Estimates consensus of ($0.07); revenues rose 43.7% year/year to $318 mln vs the $333 mln consensus. CEO Byrne comments on not reporting Q4 bottom-line results, "With our new systems in place, starting in Q4 we now have the ability to account for inbound freight by capitalizing it and expensing it as the related inventory sells. However, this creates a knotty problem regarding 2005.... that we are still working through with our auditors. However, we can provide top-line numbers for Q4 at the moment and I will discuss full year 2005 results here and on the conference call. " Byrne comments on outlook "While we have staunched the bleeding, I anticipate it will take six to nine months to rehabilitate the patient and get him running again. In 2005, however, we handled Q4 only with the maddest of scrambles, lost money, and came off the plane due to my own mistakes. We need two to three quarters to recover. Expect slower growth from us in 2006, but also expect us to end 2006 as a stronger and more focused company".
so the fact that 550,000 shares, some 24million dollars didn't settle, the money then stolen, doesn't matter?
Listen to the call on the website and hear what he says. His witnesses have been threatened. Not the first time this tactic has been used. Where did you guys park your morals ? Where does it stop? What tactics can the powerful use in the quest of profits?
Oh, the powerful are on your side for a while, but when Cramer and Real Money are apologetic, the end is near. Somebody is breathing down his neck.
As I said before, I don't care a hoot whether he buys shrimp at 50 bucks a pound and runs an all you can eat special at 5.99. The company and shareholders have a right to have their dollars buy shares. As traders, if you're real traders, that's what you should want. Or do you need to know a network is going to crush a stock to make money. Elgindy tried that. He's awaiting sentencing now.
End of story.
Listen to the call on the website and hear what he says. His witnesses have been threatened. Not the first time this tactic has been used. Where did you guys park your morals ? Where does it stop? What tactics can the powerful use in the quest of profits?
Oh, the powerful are on your side for a while, but when Cramer and Real Money are apologetic, the end is near. Somebody is breathing down his neck.
As I said before, I don't care a hoot whether he buys shrimp at 50 bucks a pound and runs an all you can eat special at 5.99. The company and shareholders have a right to have their dollars buy shares. As traders, if you're real traders, that's what you should want. Or do you need to know a network is going to crush a stock to make money. Elgindy tried that. He's awaiting sentencing now.
End of story.
http://www.thesanitycheck.com/BobsSanityCheckBlog/tabid/56/EntryID/70/Default.aspx
Now the Feds are here. Maybe you don't know the difference between right and wrong, but I'll bet they do.
Does anyone know the answer. Does the Hedgefund have to notify the investors of his Federal Supeona? Is it like a public company or Mutual Fund?
Now the Feds are here. Maybe you don't know the difference between right and wrong, but I'll bet they do.
Does anyone know the answer. Does the Hedgefund have to notify the investors of his Federal Supeona? Is it like a public company or Mutual Fund?
Quote from flytiger:
http://www.thesanitycheck.com/BobsSanityCheckBlog/tabid/56/EntryID/70/Default.aspx
Now the Feds are here. Maybe you don't know the difference between right and wrong, but I'll bet they do.
Does anyone know the answer. Does the Hedgefund have to notify the investors of his Federal Supeona? Is it like a public company or Mutual Fund?
"Well, in this latest update, I've been informed that the SEC inquiry into our favorite hedge fund and research group has gone formal. "
is this like a preacher saying "god told me"? we are still waiting for your evidence. why is there never any evidence with you conspiracy nuts? its always he said she said.
But since Byrne was instumental in putting it together, it goes here.
StockGate: DTCC Appears To Be Enforcement Target Of NASAA Multi-State Task Force
February 15, 2006 (FinancialWire) FinancialWire has learned from a highly-placed informed source that the Depository Trust and Clearing Corp. appears to be a target of an enforcement action by the multi-state task force formed by the North American Securities Administrators Association.
If so, this would explain a recent flurry of posts and press releases by the DTCC denying any complicity in the exploding national illegal manipulative trading scandal known as StockGate, embroiling Netflix (NASDAQ: NFLX), Overstock (NASDAQ: OSTK), Krispy Kreme Donuts (NYSE: KKD) and Martha Stewart OmniLiving (NYSE: MSO), as well as provide a measure of validation to rampant rumors that the clearing house, jointly owned by the NASD and the New York Stock Exchange has received subpoenas.
Similar rumors that individuals throughout the U.S. Securities and Exchange Commission have received subpoenas as part of the same or a different action has not been confirmed.
The scandal appears now to be moving at a fast pace. Harris Interactive has confirmed that the public is now informed and that 76% of investors believe those who naked short stock should suffer penalties as severe or more severe than those imposed for fraud and counterfeiting.
Its survey was conducted among 1,243 investors nationwide, and was commissioned by Working Americans for an Open Economy.
Investors' support for cracking down on naked shorting could play a role in upcoming congressional elections with 38% of investors saying they would be more inclined to vote for a congressional candidate who addresses the issue of naked shorting. Among investors aged 55 or older, fully one-half (50%) say they would be more inclined to vote for such a candidate.
"This study leaves little doubt as to how seriously investors view the illegal practice of naked shorting," said Mark Wirthlin, senior vice president of the Harris-Wirthlin Brand and Strategy Consulting Practice at Harris Interactive. "If this issue moves front and center, it clearly has the potential to influence both legislation and congressional elections."
StockGate: DTCC Appears To Be Enforcement Target Of NASAA Multi-State Task Force
February 15, 2006 (FinancialWire) FinancialWire has learned from a highly-placed informed source that the Depository Trust and Clearing Corp. appears to be a target of an enforcement action by the multi-state task force formed by the North American Securities Administrators Association.
If so, this would explain a recent flurry of posts and press releases by the DTCC denying any complicity in the exploding national illegal manipulative trading scandal known as StockGate, embroiling Netflix (NASDAQ: NFLX), Overstock (NASDAQ: OSTK), Krispy Kreme Donuts (NYSE: KKD) and Martha Stewart OmniLiving (NYSE: MSO), as well as provide a measure of validation to rampant rumors that the clearing house, jointly owned by the NASD and the New York Stock Exchange has received subpoenas.
Similar rumors that individuals throughout the U.S. Securities and Exchange Commission have received subpoenas as part of the same or a different action has not been confirmed.
The scandal appears now to be moving at a fast pace. Harris Interactive has confirmed that the public is now informed and that 76% of investors believe those who naked short stock should suffer penalties as severe or more severe than those imposed for fraud and counterfeiting.
Its survey was conducted among 1,243 investors nationwide, and was commissioned by Working Americans for an Open Economy.
Investors' support for cracking down on naked shorting could play a role in upcoming congressional elections with 38% of investors saying they would be more inclined to vote for a congressional candidate who addresses the issue of naked shorting. Among investors aged 55 or older, fully one-half (50%) say they would be more inclined to vote for such a candidate.
"This study leaves little doubt as to how seriously investors view the illegal practice of naked shorting," said Mark Wirthlin, senior vice president of the Harris-Wirthlin Brand and Strategy Consulting Practice at Harris Interactive. "If this issue moves front and center, it clearly has the potential to influence both legislation and congressional elections."