Overstock.com
Encyclopedia
Overstock.com also known by its shortcut, O.co, is an online
retailer headquartered
in Cottonwood Heights, Utah
, near Salt Lake City. Founded in 1997 by Robert Brazell, under the name D2: Discounts Direct, it was a pioneering online seller of surplus merchandise which, upon its failure in 1999, was acquired by Patrick M. Byrne
and re-launched as Overstock.com.
Overstock.com initially sold surplus
and returned merchandise on an online E-commerce marketplace
, liquidating the inventories of at least 18 failed dot-com companies
at below-wholesale prices. In recent years it has expanded to sell new merchandise, as well.
The business started rebranding
in early 2011 as "O.co" to simplify and unify its international operations. However, due to customer confusion over the new name and the .co
extension, they are temporarily retracting their rebranding efforts.
Overstock went public in May 2002 at an IPO
price of $13, and after achieving significant growth and profits in some early quarters, achieved a profit of $7.7 million in 2009 and reported its first billion-dollar year in 2010.
. The company also manages the inventory
supply for other retailers.
In addition to its direct retail sales, Overstock.com has also offered online auctions on its website since September 24, 2004.
After initially relying solely on word-of-mouth marketing from customers, the company turned to distinctive television advertisement
s starring German actress Sabine Ehrenfeld
. After Sabine moved on to new projects, Briana Walker became the new spokesperson. In January 2011, Caitlin Keats became their spokesperson.
Since 1999, when Byrne took control and relaunched the company as Overstock the company took its time to become profitable. Byrne projected in May 2008 that Overstock would be profitable in the fourth quarter of 2008, and would achieve a $10 million profit. The company indeed was profitable in Q4/2008, but resumed making losses in Q1 and Q2/2009. Overstock.com finally has its first annual profit in April 2010. On the announcement shares of the company rose more than 30 percent.
the law targets out-of-state retailers who make use of New York based affiliates. Overstock argues that the use of affiliates is not enough to meet the physical presence test and that the law thus violates the Commerce Clause
. In addition to filing suit, Overstock.com has terminated its 3,400 affiliates in New York.
signed the "Main Street Fairness Act," which targets online retailers with Illinois affiliates. Quinn said the act would help create fair competition and generate more revenue for the state. Illinois estimates that it loses $153 million in sales taxes every year due to the fact that out-of-state retailers do not remit sales tax on purchases made by Illinois residents. Amazon and Overstock.com have threatened to terminate affiliates in states that demand that sales tax be collected by online retailers. "For us, there's really no side effect, but for the states, they lose the income tax," said Overstock President Jonathan Johnson. Wal-Mart responded by inviting online businesses based in Illinois to join its affiliate network.
of his company's shares. Beginning in 2005, Byrne has contended that a number of companies, including Overstock.com, have been the targets of this practice, which involves selling a stock short but without the usual step of initially borrowing or locating the shares. Byrne alleges that the practice circumvents safeguards of conventional shorting, and has been used in large schemes devised to profit from driving down the prices of companies' shares, in many cases leading to these companies' failure. With Overstock, Byrne contends that the company's longstanding appearance on the Regulation SHO Threshold Security list, an SEC-mandated list showing companies with a high number of "fails to deliver," along with high trading volumes that sometimes surpass total quantity of the company's stock, establish that it has been targeted by this practice.
Byrne's campaign has been controversial, including criticism in the financial press that Byrne is seeking to divert attention from Overstock's share price declines and failure to turn a profit
. New York Times columnist Joseph Nocera
has said in 2006 that, "Except for a few fellow-traveling Web sites, where Mr. Byrne is viewed as a heroic figure, most people who understand the issue or have looked into it think it's pretty bogus." Others have suggested that the problem is real, but that the SEC acts to prevent it and that it does not happen on any scale such as Byrne suggests. SEC Chairman Christopher Cox called abusive naked short selling “a fraud that the commission is bound to prevent and to punish.”
in 2005, for libel, unfair business practices and tortious interference
, saying it colluded with a research firm, Gradient Analytics
, in short-selling the company while paying Gradient Analytics to publish negative reports about Overstock.com and supplying pre-publication copies to Rocker. Naked short-selling was not alleged in that suit. In a conference call with analysts in August 2005, a day after the suit was filed, Byrne said that "there's been a plan since we were in our teens to destroy our stock, drive it down to $6--$10 ... and even a plan for how the company would then get whacked up." He said that the conspirators were part of a "Miscreants Ball," headed by a "Sith Lord," who he refused to identify but said "he's one of the master criminals from the 1980s." Byrne said the conspiracy included hedge funds, journalists, investigators, trial lawyers, the SEC, and Eliot Spitzer."
Rocker Partners, renamed Copper River Management, filed a counterclaim against Overstock in November 2007, alleging overstatement of profits, false projections, and misrepresentations about the company's ventures. Copper River also alleges that Byrne tried to silence critics by suing them. A portion of this suit was settled out of court on October 13, 2008, when Overstock.com and Gradient dropped the claims against each other after Gradient retracted allegations that Overstock's reporting methods did not comply with rules established by the FASB
, stated they believed Overstock.com complied with GAAP
standards, and that three directors were independent according to NASD standards, and apologized. Byrne has said the apology and settlement "represents a great step forward in our case", while Copper River's attorney stated that "If somehow this improved Overstock’s case, then Gradient would admit to doing something wrong and they haven’t.", and that he expected the settlement to help Copper River's case.
On Dec. 8, 2009, it was announced that Copper River had reached an out of court settlement with Overstock. As part of the agreement, Copper River, which closed in December 2008, agreed to pay Overstock $5 million. In a letter to his shareholders, Patrick Byrne said, "The good guys won". Copper River said in a statement that it continued to deny Overstock's allegations. Copper River managing general partner Marc Cohodes said "Although settlement deprives us
of the ability to disprove Overstock's case and prosecute our counterclaims, we decided that the litigation costs did not justify passing up a practical way to end four-and-half years of meritless litigation by Overstock."
In February 2007, Overstock.com launched a $3.5 billion lawsuit against Morgan Stanley
, Goldman Sachs
and other large Wall Street firms, alleging a "massive illegal stock market manipulation scheme" involving naked short selling. Among its allegations, Overstock stated that since at least January 2005, naked short selling has accounted for large portions of Overstock stock, in some cases exceeding the 23.4 million total shares outstanding. The lawsuit alleged that this had created "immense downward pressure" on share prices over time. Kerry Fields, associate professor of law and business ethics at the University of Southern California
, said, "Byrne may be able to help set new law if he handles this right." Fields said, Byrne's "best approach now is probably to persuade the SEC, which continues to wander around the issue, or the government to serve subpoenas and let them decide whether or not his company was wronged."
John Coffee
, director of the Center on Corporate Governance at Columbia University
Law School, described it as overly ambitious and "extremely unpromising." Two members of the Overstock.com board of directors, John Fisher and Ray Groves, resigned in disagreement over the lawsuit.
In December 2010, all but two of the prime broker defendants settled out of court with Overstock for $4.4 million. That same month, the company filed a motion seeking to amend its lawsuit against the remaining defendants—Goldman Sachs and Merrill Lynch—to include claims of RICO violations. The enhanced claims were based on evidence gained through discovery in the case.
On November 18, 2010, seven California district attorneys filed a suit against Overstock, accusing the company of false and misleading claims about prices. They found that Overstock discount claims were often not indexed to prices from competitors, but were simply based on arbitrary markups.
In July 2007, two American Stock Exchange
options market makers were fined and suspended for using Regulation SHO exemptions to "impermissibly engage in naked short selling" in trades involving options and stocks for their own account. Overstock shares were believed to be among the stocks traded. The market makers settled without admitting or denying the allegations. None of the defendants sued by Overstock were named in the decision, but the Dow Jones News Service said that the decision was likely to be used by Byrne in pursuing his case.
In November 2009, the company took the unusual step of filing a quarterly financial statement not reviewed by an independent accounting firm, after firing its second auditor in nine months. Byrne defended the decision, and criticized the company's auditor, Grant Thornton
, which had just been fired by Overstock prior to filing of the financial statement. The filing did not contain the certifications required under the Sarbanes-Oxley Act. The NASDAQ stock market notified Overstock on November 20 that it violated its market listing rule, and gave it until Jan. 18 to submit a plan to gain compliance. Overstock said it would hire an independent auditor to gain compliance. Grant Thornton subsequently became embroiled in a heated dispute with Overstock, with each accusing the other of not being truthful concerning the company's third quarter 2009 restatement. On February 4, 2010, the company announced it was shifting $1.7 million of income to the 2008 from the 2009 financial year.
In July 2006, John J. Byrne
, the father of Overstock's chief executive, resigned from the board of directors after a public airing of the elder Byrne's unhappiness with his son's crusade against naked short-selling. In August 2008, Jack Byrne said that after "much initial skepticism" he believed his son was "right all along" about the battle and lawsuits with short-sellers and analysts. In 2010 the elder Byrne returned to the Overstock.com board of directors.
In early 2007, John A. Fisher and Ray Groves resigned from the Overstock board of directors over disagreement with the company's prime broker suit.
On January 2, 2008, Overstock announced that cofounder Jason Lindsey had resigned as President, COO, and as a Director of Overstock effective from December 31, 2007. Byrne said Lindsey had "played a decisive role getting [Overstock] back on track" after "I screwed it up a couple years ago". Overstock stock dropped to a four-year low following the announcement, which an analyst for investment bank Broadpoint Capital described as a "key loss".
ONLINE
ONLINE is a magazine for information systems first published in 1977. The publisher Online, Inc. was founded the year before. In May 2002, Information Today, Inc. acquired the assets of Online Inc....
retailer headquartered
Headquarters
Headquarters denotes the location where most, if not all, of the important functions of an organization are coordinated. In the United States, the corporate headquarters represents the entity at the center or the top of a corporation taking full responsibility managing all business activities...
in Cottonwood Heights, Utah
Cottonwood Heights, Utah
Cottonwood Heights is a city located in Salt Lake County, Utah, United States, along the east bench of the Salt Lake Valley. It lies south of the cities of Holladay and Murray, east of Midvale, and north of Sandy within the Salt Lake City, Utah Metropolitan Statistical Area. Following a successful...
, near Salt Lake City. Founded in 1997 by Robert Brazell, under the name D2: Discounts Direct, it was a pioneering online seller of surplus merchandise which, upon its failure in 1999, was acquired by Patrick M. Byrne
Patrick M. Byrne
Patrick M. Byrne is the president, CEO, and chairman of the board of directors of Internet retailer Overstock.com. In 1999, Byrne took control of the company, then called D2: Discounts Direct, and changed its name to Overstock...
and re-launched as Overstock.com.
Overstock.com initially sold surplus
Supply and demand
Supply and demand is an economic model of price determination in a market. It concludes that in a competitive market, the unit price for a particular good will vary until it settles at a point where the quantity demanded by consumers will equal the quantity supplied by producers , resulting in an...
and returned merchandise on an online E-commerce marketplace
Marketplace
A marketplace is the space, actual, virtual or metaphorical, in which a market operates. The term is also used in a trademark law context to denote the actual consumer environment, ie. the 'real world' in which products and services are provided and consumed.-Marketplaces and street markets:A...
, liquidating the inventories of at least 18 failed dot-com companies
Dot-com company
A dot-com company, or simply a dot-com , is a company that does most of its business on the Internet, usually through a website that uses the popular top-level domain, ".com" .While the term can refer to present-day companies, it is also used specifically to refer to companies with...
at below-wholesale prices. In recent years it has expanded to sell new merchandise, as well.
The business started rebranding
Rebranding
Rebranding is the creation of a new name, term, symbol, design, or a combination of them for an established brand with the intention of developing a differentiated position in the mind of stakeholders and competitors....
in early 2011 as "O.co" to simplify and unify its international operations. However, due to customer confusion over the new name and the .co
.co
.co is the country code top-level domain assigned to the Republic of Colombia. It is administered by .CO Internet S.A.S., a strategic venture formed between Arcelandia S.A. and Neustar, Inc...
extension, they are temporarily retracting their rebranding efforts.
Overstock went public in May 2002 at an IPO
Initial public offering
An initial public offering or stock market launch, is the first sale of stock by a private company to the public. It can be used by either small or large companies to raise expansion capital and become publicly traded enterprises...
price of $13, and after achieving significant growth and profits in some early quarters, achieved a profit of $7.7 million in 2009 and reported its first billion-dollar year in 2010.
Business model
Part of Overstock.com's merchandise is purchased by or manufactured specifically for Overstock.com. Among their products are handmade goods produced for Overstock by workers in developing nationsDeveloping country
A developing country, also known as a less-developed country, is a nation with a low level of material well-being. Since no single definition of the term developing country is recognized internationally, the levels of development may vary widely within so-called developing countries...
. The company also manages the inventory
Inventory
Inventory means a list compiled for some formal purpose, such as the details of an estate going to probate, or the contents of a house let furnished. This remains the prime meaning in British English...
supply for other retailers.
In addition to its direct retail sales, Overstock.com has also offered online auctions on its website since September 24, 2004.
After initially relying solely on word-of-mouth marketing from customers, the company turned to distinctive television advertisement
Television advertisement
A television advertisement or television commercial, often just commercial, advert, ad, or ad-film – is a span of television programming produced and paid for by an organization that conveys a message, typically one intended to market a product...
s starring German actress Sabine Ehrenfeld
Sabine Ehrenfeld
Sabine Ehrenfeld is a German model and actress. She was best known for her role in a series of advertisements as the spokesperson for web retailer Overstock.com...
. After Sabine moved on to new projects, Briana Walker became the new spokesperson. In January 2011, Caitlin Keats became their spokesperson.
Since 1999, when Byrne took control and relaunched the company as Overstock the company took its time to become profitable. Byrne projected in May 2008 that Overstock would be profitable in the fourth quarter of 2008, and would achieve a $10 million profit. The company indeed was profitable in Q4/2008, but resumed making losses in Q1 and Q2/2009. Overstock.com finally has its first annual profit in April 2010. On the announcement shares of the company rose more than 30 percent.
Awards
In January 2010, the National Retail Federation ranked the company #2 in the U.S. for best customer service. In December of the same year, a Forbes-commissioned study found Overstock.com to be one of the top 10 best places to work in America.O.co Coliseum
In April 2011, Overstock.com acquired naming rights to the former Oakland-Alameda County Coliseum, renaming it Overstock.com Coliseum. The Coliseum has since been renamed O.co Coliseum, in keeping with Overstock's ongoing rebranding as O.co.New York
As of 2011, Overstock.com is suing New York state over a law passed to require online retailers to collect sales taxes on goods shipped to New York residents. In order to comply with the physical presence requirement of Quill Corp. v. North DakotaQuill Corp. v. North Dakota
Quill Corp. v. North Dakota, 504 U.S. 298 is a Supreme Court ruling concerning use tax. Quill Corporation is an office supply retailer...
the law targets out-of-state retailers who make use of New York based affiliates. Overstock argues that the use of affiliates is not enough to meet the physical presence test and that the law thus violates the Commerce Clause
Commerce Clause
The Commerce Clause is an enumerated power listed in the United States Constitution . The clause states that the United States Congress shall have power "To regulate Commerce with foreign Nations, and among the several States, and with the Indian Tribes." Courts and commentators have tended to...
. In addition to filing suit, Overstock.com has terminated its 3,400 affiliates in New York.
Illinois
In March of 2011 Gov. Pat QuinnPat Quinn (politician)
Patrick Joseph "Pat" Quinn III is the 41st and current Governor of Illinois. He is a member of the Democratic Party. Previously elected three times to statewide office, Quinn was the sitting lieutenant governor and became governor on January 29, 2009, when the previous governor, Rod Blagojevich,...
signed the "Main Street Fairness Act," which targets online retailers with Illinois affiliates. Quinn said the act would help create fair competition and generate more revenue for the state. Illinois estimates that it loses $153 million in sales taxes every year due to the fact that out-of-state retailers do not remit sales tax on purchases made by Illinois residents. Amazon and Overstock.com have threatened to terminate affiliates in states that demand that sales tax be collected by online retailers. "For us, there's really no side effect, but for the states, they lose the income tax," said Overstock President Jonathan Johnson. Wal-Mart responded by inviting online businesses based in Illinois to join its affiliate network.
Naked short selling campaign
The company has received attention stemming from CEO Patrick Byrne's battle against alleged naked short sellingNaked short selling
Naked short selling, or naked shorting, is the practice of short-selling a financial instrument without first borrowing the security or ensuring that the security can be borrowed, as is conventionally done in a short sale. When the seller does not obtain the shares within the required time frame,...
of his company's shares. Beginning in 2005, Byrne has contended that a number of companies, including Overstock.com, have been the targets of this practice, which involves selling a stock short but without the usual step of initially borrowing or locating the shares. Byrne alleges that the practice circumvents safeguards of conventional shorting, and has been used in large schemes devised to profit from driving down the prices of companies' shares, in many cases leading to these companies' failure. With Overstock, Byrne contends that the company's longstanding appearance on the Regulation SHO Threshold Security list, an SEC-mandated list showing companies with a high number of "fails to deliver," along with high trading volumes that sometimes surpass total quantity of the company's stock, establish that it has been targeted by this practice.
Byrne's campaign has been controversial, including criticism in the financial press that Byrne is seeking to divert attention from Overstock's share price declines and failure to turn a profit
Profit (accounting)
In accounting, profit can be considered to be the difference between the purchase price and the costs of bringing to market whatever it is that is accounted as an enterprise in terms of the component costs of delivered goods and/or services and any operating or other expenses.-Definition:There are...
. New York Times columnist Joseph Nocera
Joseph Nocera
Joseph "Joe" Nocera is an American business journalist and author. He became a business columnist for The New York Times in April 2005. In March 2011, Nocera became a regular opinion columnist for The Times' Op-Ed page, writing on Tuesdays and Saturdays...
has said in 2006 that, "Except for a few fellow-traveling Web sites, where Mr. Byrne is viewed as a heroic figure, most people who understand the issue or have looked into it think it's pretty bogus." Others have suggested that the problem is real, but that the SEC acts to prevent it and that it does not happen on any scale such as Byrne suggests. SEC Chairman Christopher Cox called abusive naked short selling “a fraud that the commission is bound to prevent and to punish.”
Lawsuits
Overstock filed a lawsuit against the hedge fund Rocker PartnersDavid Rocker
David A. Rocker is the founder of the hedge fund Rocker Partners, LP , and former columnist for TheStreet.com...
in 2005, for libel, unfair business practices and tortious interference
Tortious interference
Tortious interference, also known as intentional interference with contractual relations, in the common law of tort, occurs when a person intentionally damages the plaintiff's contractual or other business relationships...
, saying it colluded with a research firm, Gradient Analytics
Gradient Analytics
Gradient Analytics, Inc., founded in 1996 by Donn Vickrey and Dr. Carr Bettis as Camelback Research Alliance, Inc. and based in Scottsdale, Arizona, is an independent equity research company.-External links:...
, in short-selling the company while paying Gradient Analytics to publish negative reports about Overstock.com and supplying pre-publication copies to Rocker. Naked short-selling was not alleged in that suit. In a conference call with analysts in August 2005, a day after the suit was filed, Byrne said that "there's been a plan since we were in our teens to destroy our stock, drive it down to $6--$10 ... and even a plan for how the company would then get whacked up." He said that the conspirators were part of a "Miscreants Ball," headed by a "Sith Lord," who he refused to identify but said "he's one of the master criminals from the 1980s." Byrne said the conspiracy included hedge funds, journalists, investigators, trial lawyers, the SEC, and Eliot Spitzer."
Rocker Partners, renamed Copper River Management, filed a counterclaim against Overstock in November 2007, alleging overstatement of profits, false projections, and misrepresentations about the company's ventures. Copper River also alleges that Byrne tried to silence critics by suing them. A portion of this suit was settled out of court on October 13, 2008, when Overstock.com and Gradient dropped the claims against each other after Gradient retracted allegations that Overstock's reporting methods did not comply with rules established by the FASB
Financial Accounting Standards Board
The Financial Accounting Standards Board is a private, not-for-profit organization whose primary purpose is to develop generally accepted accounting principles within the United States in the public's interest...
, stated they believed Overstock.com complied with GAAP
Generally Accepted Accounting Principles
Generally Accepted Accounting Principles refer to the standard framework of guidelines for financial accounting used in any given jurisdiction; generally known as accounting standards...
standards, and that three directors were independent according to NASD standards, and apologized. Byrne has said the apology and settlement "represents a great step forward in our case", while Copper River's attorney stated that "If somehow this improved Overstock’s case, then Gradient would admit to doing something wrong and they haven’t.", and that he expected the settlement to help Copper River's case.
On Dec. 8, 2009, it was announced that Copper River had reached an out of court settlement with Overstock. As part of the agreement, Copper River, which closed in December 2008, agreed to pay Overstock $5 million. In a letter to his shareholders, Patrick Byrne said, "The good guys won". Copper River said in a statement that it continued to deny Overstock's allegations. Copper River managing general partner Marc Cohodes said "Although settlement deprives us
of the ability to disprove Overstock's case and prosecute our counterclaims, we decided that the litigation costs did not justify passing up a practical way to end four-and-half years of meritless litigation by Overstock."
In February 2007, Overstock.com launched a $3.5 billion lawsuit against Morgan Stanley
Morgan Stanley
Morgan Stanley is a global financial services firm headquartered in New York City serving a diversified group of corporations, governments, financial institutions, and individuals. Morgan Stanley also operates in 36 countries around the world, with over 600 offices and a workforce of over 60,000....
, Goldman Sachs
Goldman Sachs
The Goldman Sachs Group, Inc. is an American multinational bulge bracket investment banking and securities firm that engages in global investment banking, securities, investment management, and other financial services primarily with institutional clients...
and other large Wall Street firms, alleging a "massive illegal stock market manipulation scheme" involving naked short selling. Among its allegations, Overstock stated that since at least January 2005, naked short selling has accounted for large portions of Overstock stock, in some cases exceeding the 23.4 million total shares outstanding. The lawsuit alleged that this had created "immense downward pressure" on share prices over time. Kerry Fields, associate professor of law and business ethics at the University of Southern California
University of Southern California
The University of Southern California is a private, not-for-profit, nonsectarian, research university located in Los Angeles, California, United States. USC was founded in 1880, making it California's oldest private research university...
, said, "Byrne may be able to help set new law if he handles this right." Fields said, Byrne's "best approach now is probably to persuade the SEC, which continues to wander around the issue, or the government to serve subpoenas and let them decide whether or not his company was wronged."
John Coffee
John C. Coffee
John C. "Jack" Coffee, Jr. is the Adolf A. Berle Professor of Law at Columbia Law School and director of the Center on Corporate Governance at Columbia University Law School.-Education:...
, director of the Center on Corporate Governance at Columbia University
Columbia Law School
Columbia Law School, founded in 1858, is one of the oldest and most prestigious law schools in the United States. A member of the Ivy League, Columbia Law School is one of the professional graduate schools of Columbia University in New York City. It offers the J.D., LL.M., and J.S.D. degrees in...
Law School, described it as overly ambitious and "extremely unpromising." Two members of the Overstock.com board of directors, John Fisher and Ray Groves, resigned in disagreement over the lawsuit.
In December 2010, all but two of the prime broker defendants settled out of court with Overstock for $4.4 million. That same month, the company filed a motion seeking to amend its lawsuit against the remaining defendants—Goldman Sachs and Merrill Lynch—to include claims of RICO violations. The enhanced claims were based on evidence gained through discovery in the case.
On November 18, 2010, seven California district attorneys filed a suit against Overstock, accusing the company of false and misleading claims about prices. They found that Overstock discount claims were often not indexed to prices from competitors, but were simply based on arbitrary markups.
SEC and regulatory action
A Securities and Exchange Commission investigation of Gradient Analytics was initiated but then dropped in February 2007. An SEC investigation of Overstock.com and Byrne, seeking information as to the company's accounting policies, targets, projections, and estimates relating to its financial performance, continued but was dropped in June 2008.In July 2007, two American Stock Exchange
American Stock Exchange
NYSE Amex Equities, formerly known as the American Stock Exchange is an American stock exchange situated in New York. AMEX was a mutual organization, owned by its members. Until 1953, it was known as the New York Curb Exchange. On January 17, 2008, NYSE Euronext announced it would acquire the...
options market makers were fined and suspended for using Regulation SHO exemptions to "impermissibly engage in naked short selling" in trades involving options and stocks for their own account. Overstock shares were believed to be among the stocks traded. The market makers settled without admitting or denying the allegations. None of the defendants sued by Overstock were named in the decision, but the Dow Jones News Service said that the decision was likely to be used by Byrne in pursuing his case.
New SEC investigation and auditor dispute
On September 17, 2009, Reuters News Agency reported Overstock's announcement that the SEC is investigating its "history of financial restatements." The company completed an earlier investigation in 2008 without taking action. The new probe involved the financial restatements in 2006 and 2008 and "other matters".In November 2009, the company took the unusual step of filing a quarterly financial statement not reviewed by an independent accounting firm, after firing its second auditor in nine months. Byrne defended the decision, and criticized the company's auditor, Grant Thornton
Grant Thornton International
Grant Thornton International is a global profesional services network of independent accounting and consulting member firms which provide assurance, tax and specialist advisory services to privately held businesses, public interest entities, and public sector entities...
, which had just been fired by Overstock prior to filing of the financial statement. The filing did not contain the certifications required under the Sarbanes-Oxley Act. The NASDAQ stock market notified Overstock on November 20 that it violated its market listing rule, and gave it until Jan. 18 to submit a plan to gain compliance. Overstock said it would hire an independent auditor to gain compliance. Grant Thornton subsequently became embroiled in a heated dispute with Overstock, with each accusing the other of not being truthful concerning the company's third quarter 2009 restatement. On February 4, 2010, the company announced it was shifting $1.7 million of income to the 2008 from the 2009 financial year.
Board of directors
Overstock.com's current Board of Directors includes Patrick Byrne, Allison H. Abraham, Clay Corbus and Joseph J. Tabacco, Jr.In July 2006, John J. Byrne
John J. Byrne
John J. Byrne is a longtime insurance industry executive who was CEO of GEICO, White Mountains Insurance Group and Fireman's Fund. He also served as chairman of Overstock.com.-Early background :...
, the father of Overstock's chief executive, resigned from the board of directors after a public airing of the elder Byrne's unhappiness with his son's crusade against naked short-selling. In August 2008, Jack Byrne said that after "much initial skepticism" he believed his son was "right all along" about the battle and lawsuits with short-sellers and analysts. In 2010 the elder Byrne returned to the Overstock.com board of directors.
In early 2007, John A. Fisher and Ray Groves resigned from the Overstock board of directors over disagreement with the company's prime broker suit.
On January 2, 2008, Overstock announced that cofounder Jason Lindsey had resigned as President, COO, and as a Director of Overstock effective from December 31, 2007. Byrne said Lindsey had "played a decisive role getting [Overstock] back on track" after "I screwed it up a couple years ago". Overstock stock dropped to a four-year low following the announcement, which an analyst for investment bank Broadpoint Capital described as a "key loss".
External links
- Overstock.com
- Five-year stock price
- "Overstock.com Rezzes Into Second Life", CNN ireport.com, 2008-05-02. Retrieved on 2008-05-02.