Overstock.com, Inc. (OSTK)

You know when Overstock.com advertises that
"it's all about the 'O' "
I don't think most viewers realize that Overstock means the number, not the letter. As in zero profits. Imagine that, truth in advertising.

But there's so much more to dislike about the '0'

Crazy Patrick Bryne ("the shorts are out to get me!") still at the helm, blah web interface, absolutely no moat and the country is in a weak consumer environment.

So how about a possible EBAY buyout? I really doubt even Ebay is going to pay a premium for this loser in this environment and they'd probably be ill-advised to buy it all.

What's to like here? I'd say '0'

When Amazon was unprofitable most of Wall St. said it never would be, bad quotes about its CEO were popular. Within 2 years of it becoming profitable it was 700%, same thing with Netflix up multiple 'bags' after becoming profitable, OSTK has the same potential with an add-in - Wall St. has convinced itself to be biased against it because Byrne has spoken out against big Hedge funds and the SEC for their manipulation of his company's stock - this has discounted the stock far below anywhere Amazon ever traded. Amazon never traded below 1x sales OSTK has the same business model in an arguably better business - online liquidation - with a better CEO, less cash burned to create the same amount of Sales and it trades for half of sales. Lock-in effect and high fixed starting costs gives OSTK a moat against current competitors and prospective start-ups. Assuming no growth in the industry OSTK can easily grasp 5% share by 2010, this is $3 Billion revenue 1x this is 10x the current share price. Catalysts are winning the lawsuit against Rocker and Gradiant and the company becoming profitable.

Going 'thumbs down' on Overstock was one of the very first underperform calls I ever made in CAPS (and have re-upped a few times along the way).

And I'm in total and complete agreement with Seth here, that when the CEO goes on public record discussing the shorts, it's *never* a good sign. The way to shut the shorts up, and in a big hurry, is to deliver results. Anyone who pays close attention to CAPS may know how the short squeeze Pegasus Wireless tried to engineer turned out (if you need a hint, not long afterwards Pegasus began trading on the pink sheets).

So, Patrick, spend your time and energy talking about the shorts instead of focusing on actually trying to make it so your company turns a profit for a change - the more you fight the shorts, the more confident I become in my underperform call.

When my wife or I want to buy something online, OSTK does not come to mind. We always end up at EBAY, WMT, some smaller specialty retailer, or even craigslist. The few times I have gone to OSTK's website, I can't find what I want. If I am going to dig through odds-and-ends sort of merchandise, it has to be cheap enough to attact me. To my mind, OSTK misses on both counts.

As of close of business on 2/20/08, this was a 5-star Morningstar stock trading at less than half of its Morningstar fair value.

Solid companies are getting killed lately, and this money loser holds its ground. Go figure. Never earned a profit ever. I think the recession plus higher shipping costs due to higher fuel cost will put a nail in the coffin of this one, it's debt another nail.

Having been battered down to teens from its highs in the 70's, the stock's way oversold. It operates in a niche market, with virtually no competetion. Mr. Byrne and co. have created almost a Billion dollar business with minimal cash burn, which easily contrasts with Amazon and Buy.com. Plus, insiders have been buying all the shares they could lay their hands on in the past year and a half, and there has been virtually not inside selling. I don't care how Dr. Byrne comes across in the media, if a person in plunking down his own money by the millions in which he already owns a sizeable stake, he gotta have tremendous faith in the business. Laugh all you want, but eventually it's the OSTK shareholders that are going to laugh all the way to the bank.
Disclosure: Long OSTK.

Merrill Lynch’s Justin Post today cut his rating on Overstock.com (OSTK) to Sell from Hold on a valuation basis.
Post points out in a research note today that OSTK shares have jumped more than 100% since it reported first quarter results a little over a month ago. “Although Q1 results showed unexpectedly strong revenue growth and positive EBITDA, we cannot justify the price increase relative to the e-commerce group valuation,” he writes. Post says that on a fundamental basis the stock is “over-extended” above $18 a share.
source: Barron's Blogs

I hate this stock more than anything else. The company I only mildly dislike. I'm holding onto this call even if it turns into my DryShips and loses me 1000%+. At least I'll be in good company. BRING ON THE PAIN!!

P/S is at .50, Large insider holding, auctions seems to have picked up. Great website. Bound to be profitable very soon, and will trade at a much greater multiple.

1.It is a perfect internet business that has been plagued by operational issues. 2. Operations are getting under control to reach profitability not just growth. 3. Patrick Byrne is not crazy, just emotional, and he is a very good investor.

Overstock management has been questionable and full of excuses and promises. And frankly, Overstock might be an interesting business if they could figure out how to trim their expenses. $2 in revenue for every $1 in stock price is definitely a cheap internet stock.

But unless they slash and burn their SGA they just won't be able to get any upward movement in the stock price.

Too much pessimism baked in to the price. Byrne isn't going to let this ship go down. Expenses should decrease, and sales ramp up again by year end.

Remember the articles about AMZN burning through cash, never going to be profitable. I like the negativity surrounding this company.

Not sure why the price popped on 6/17, but I am happy to short this at the open for the same reasons other people see. The company never makes money and it has gradually sunk to a negative book value. Not much here to justify $234 million in market cap.

Picking the losers is easier than picking the winners! This one's easy. There's a reason I chose ebay and amazon over Overstock. And that reason will put them out of business.

It's all about the O. As in $0 target price. Overstock.com just isn't a competitive internet retailer, and likely won't survive the recession intact.

A weak brand with nothing behind it. unless it can start providing bargains to consumers, buyers will continue to migrate to Amazon and Ebay.

They take crap other people couldn't sell and try to sell it for less...just one problem, its still junk.