Overstock.com
From Wikipedia, the free encyclopedia
Overstock.com (NASDAQ: OSTK) is an online retailer headquartered in Cottonwood Heights, Utah. Nearby Salt Lake City is commonly listed as the company's location in corporate filings and news accounts.
Overstock.com is a leading online E-commerce marketplace, in which Internet users purchase surplus and returned, as well as new merchandise. Overstock.com was founded in 1997 under the name D2: Discounts Direct, and changed its name to Overstock.com in 1999.
Roughly half of Overstock.com merchandise is sold on behalf of third parties - which include manufacturers, wholesalers and retailers - with standing business relationships with Overstock.com. The remainder is purchased by or manufactured specifically for Overstock.com. The company also purports to manage the inventory supply for other retailers, and says that it enables small retailers to purchase stock at below-wholesale prices.
Overstock.com also functions as a marketplace for new merchandise at cut-rate prices.
The company's distinctive television advertisements feature German actress Sabine Ehrenfeld. These advertisements feature double entendres, as they talk about the "O" and the "Big O", which means both "Overstock", and calls to mind "Orgasm" ([1], [2], [3]).
Overstock.com's main rivals are eBay, Amazon.com Marketplace and Yahoo! Auctions.
In addition to its direct retail sales, Overstock.com has also offered online auctions on its website since September 24, 2004. The auction services include several features intended to enhance security, social networking and convenience. It has hosted charity auctions to benefit various causes.
[edit] Anti naked short-selling campaign
The company has received attention, not all of it favorable, stemming from CEO Patrick Byrne's battle against alleged naked short selling of his company's shares. Byrne has claimed that his company's shares have been attacked by "miscreants" in the stock market. Critics maintain that Byrne is seeking to divert attention from Overstock's share price declines and failure to turn a profit.
Byrne has also sued a hedge fund, Rocker Partners, claiming it colluded with a research firm, Gradient Analytics, in short-selling the company. His claims have been vigorously denied. Naked short-selling was not alleged in that suit. [4]
A Securities and Exchange Commission into the allegations concerning Gradient and Rocker was dropped in February 2006. [5]
Byrne's campaign has been widely criticized, with New York Times columnist Joseph Nocera saying: "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."[6] Supporters of the campaign point to the passage of the SEC's Regulation SHO, which addresses naked short selling.
In May 2006, Overstock.com received a subpoena from the SEC, requesting information about the company's accounting policies as well as its communications regarding naked short selling. [7]
Though Byrne said in a press release that he "celebrated" receiving the subpoena, critics of the company viewed it as an indication of Overstock's mounting troubles. Herb Greenberg, a journalist with Marketwatch.com and CNBC who has been named in affidavits from Demtrios Anifantis [8] and Daryl Smith in the Overstock vs Rocker Partners/Gradient Analytics suit [9] [10] , termed the response "feeble spin control."[11]
Byrne was instrumental in passage of anti naked shortselling legislation in Utah that was repealed in February 2007. Repeal of the legislation led to tension between Byrne and Utah officials. A New York Times report stated that "Utah officials now feel they were snookered by the Overstock C.E.O." and that the affair had damaged Overstock's political influence. [12]
