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OSTK spits on shareholders -- they say "Thanks for the rain."

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December 15, 2006 – Comments (6)

So, OSTK won't need cash?

Then why go around selling shares below market price?

http://biz.y...ng.html?.v=1

Doesn't take a genius to sell stuff at a loss over the Internet. Takes quite a ringmaster to keep inviting people into this circus, however.

6 Comments – Post Your Own

#1) On December 15, 2006 at 3:40 PM, TMFBent (99.83) wrote:

Ahh, the fine print.

Remember Byrne's big Blue Nile killer? The fabled diamond purchase? (I've heard tales of folks buying diamonds from OSTK that had defects visible to the naked eye... Unconfirmed.)

Anway, the 8K announcing the private placement had a bit on the diamond and jewelry biz:

"In August 2004, we entered into agreements with an entity for the purpose of buying diamonds and other jewelry, primarily to sell on our website. Effective November 30, 2006 we terminated our agreements with this entity, including our ten-year option to purchase 50% of the ownership and voting interest of the entity, a $7.4 million promissory note to the Company, and our security interest in its diamonds inventory in exchange for a $6.7 million promissory note from a third party."

Anyone know who's the entity? How about the third party that provided the promissory note? Still digging myself, so maybe the mystery entities will show up. A straight talker might just come out and say exactly who's who in the filing, but hey...

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#2) On December 15, 2006 at 3:42 PM, TMFBent (99.83) wrote:

And in a time when even Yahoo! has decided to stop trying to spread peanut butter over everything, Dr. B. has see fit to expand OSTK's biz to:

Cars and Social Networking

I'm sure Carmax and Myspace are quaking in their boots.

"We are developing two tabs which we expect to begin displaying on our website sometime between December 20 and 30, 2006. The first is an automotive tab which will show automobiles for sale by car dealers and allow users to express offers on those automobiles through our website to the dealers. The car dealers will make the actual sales. The second is a social media tab wherein users who share common interests can collaborate with other users to author articles about their interests."

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#3) On December 15, 2006 at 4:07 PM, Steve819 (97.86) wrote:

Didn't we go through the same darn thing a few months back? Patrick says in the CC - we won't need cash, yet a few days later, bam, here comes the dilution?

Yet, here he is again.

I was far too generous with this company for a long time, but wow, have they blown themselves up.

Cars? Social networking?

How much do you wanna bet that they somehow manage to enter the streaming videos online space?

Oy.

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#4) On December 15, 2006 at 6:06 PM, TMFBent (99.83) wrote:

Steve. You are obviously now on the miscreant payroll. The proof is in your opinion. Shame on you!

I mean, welcome to the dark side...

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#5) On December 15, 2006 at 6:44 PM, VossPiety (98.94) wrote:

Hey Bent,

Just wanted to say thanks for the work you've done on the OSTK board. Back when the company had impressive sales growth I nearly pulled the trigger. The thing that made me wait was your voice of reason. You took a lot of heat on that board but kept coming back to point out what was really happening behind the smoke and mirrors. I wonder if those people who called you crooked will have the eggs to apologize. I doubt it.

Usually the Fool makes me money, in this case it kept me from losing it. Thanks Darth Jayson!

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#6) On December 15, 2006 at 7:35 PM, Steve819 (97.86) wrote:

Uh Oh. I hear helicopters. What's that knocking at the door....I didn't order any pizza...

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