Comments on: Is Overstock.com misrepresenting inventory? http://www.sequenceinc.com/fraudfiles/2007/05/02/is-overstockcom-misrepresenting-inventory/ Sat, 20 Mar 2010 22:05:23 +0000 http://wordpress.org/?v=2.9.1 hourly 1 By: Mark http://www.sequenceinc.com/fraudfiles/2007/05/02/is-overstockcom-misrepresenting-inventory/comment-page-1/#comment-44446 Mark Mon, 21 May 2007 19:34:24 +0000 http://www.sequence-inc.com/fraudfiles/2007/05/02/is-overstockcom-misrepresenting-inventory/#comment-44446 Lost in this discussion is the fact that most of their volume is generated by products that never enter their inventory...they've lost many of their "better" brands in some product categories, and have alienated suppliers with questionable proceedures and charges in others. Added to that is the clownish nature of their management team...is there a better candidate for takeover by a private equity firm? Lost in this discussion is the fact that most of their volume is generated by products that never enter their inventory…they’ve lost many of their “better” brands in some product categories, and have alienated suppliers with questionable proceedures and charges in others. Added to that is the clownish nature of their management team…is there a better candidate for takeover by a private equity firm?

]]> By: Tracy http://www.sequenceinc.com/fraudfiles/2007/05/02/is-overstockcom-misrepresenting-inventory/comment-page-1/#comment-34545 Tracy Fri, 04 May 2007 00:58:13 +0000 http://www.sequence-inc.com/fraudfiles/2007/05/02/is-overstockcom-misrepresenting-inventory/#comment-34545 Well I just talk about what I know, and I know financial statements and notes. Your point is well taken. :) Well I just talk about what I know, and I know financial statements and notes. Your point is well taken. :)

]]> By: OLOC_the_nitwit http://www.sequenceinc.com/fraudfiles/2007/05/02/is-overstockcom-misrepresenting-inventory/comment-page-1/#comment-34468 OLOC_the_nitwit Thu, 03 May 2007 22:06:53 +0000 http://www.sequence-inc.com/fraudfiles/2007/05/02/is-overstockcom-misrepresenting-inventory/#comment-34468 Sure, why not? But these are subtleties compared to the CEO's maniacal treatment of the press, time-wasting anti-naked short selling jihad, inability to decide what business the company is actually in, approval of a lunatic fringe website (thesanitycheck.org) and waving a sign around on television with its URL, approval of an enemy-bashing and message-board-poster-outing website (antisocialmedia.net) run by an employee and exposing the company to god knows what potential liabilities, claims of technology brilliance followed by a technology diaster, "miscreant's ball" conference call, lawsuit against prime brokers, lawsuit against an independent research outfit, and as I mentioned earlier, the giant drop in inventory levels indicating who-knows-what level of incompetence in managing the business -- against that background, mere inventory manipulation fades into insignficance, even if present. Sure, why not? But these are subtleties compared to the CEO’s maniacal treatment of the press, time-wasting anti-naked short selling jihad, inability to decide what business the company is actually in, approval of a lunatic fringe website (thesanitycheck.org) and waving a sign around on television with its URL, approval of an enemy-bashing and message-board-poster-outing website (antisocialmedia.net) run by an employee and exposing the company to god knows what potential liabilities, claims of technology brilliance followed by a technology diaster, “miscreant’s ball” conference call, lawsuit against prime brokers, lawsuit against an independent research outfit, and as I mentioned earlier, the giant drop in inventory levels indicating who-knows-what level of incompetence in managing the business — against that background, mere inventory manipulation fades into insignficance, even if present.

]]> By: Tracy http://www.sequenceinc.com/fraudfiles/2007/05/02/is-overstockcom-misrepresenting-inventory/comment-page-1/#comment-34419 Tracy Thu, 03 May 2007 19:49:01 +0000 http://www.sequence-inc.com/fraudfiles/2007/05/02/is-overstockcom-misrepresenting-inventory/#comment-34419 Would you consider it material if Overstock.com was consistently managing earnings, in part by manipulating inventory numbers? Would you consider it material if Overstock.com was consistently managing earnings, in part by manipulating inventory numbers?

]]> By: OLOC_the_nitwit http://www.sequenceinc.com/fraudfiles/2007/05/02/is-overstockcom-misrepresenting-inventory/comment-page-1/#comment-34417 OLOC_the_nitwit Thu, 03 May 2007 19:38:53 +0000 http://www.sequence-inc.com/fraudfiles/2007/05/02/is-overstockcom-misrepresenting-inventory/#comment-34417 Maybe $15 million of nice stuff and $5 million of crap is, on balance, more attractive than $20 million of nice stuff, $65 million of "eh" stuff, and $5 million of crap. The crap is as unattractive as it was before, so there's no real difference there, and the remainder is significantly more attractive. Of course I can't pretend to know that that's what they mean. I'm just not sure there's a big point here, as there seem to me to be perfectly plausible alternative explanations (and much bigger things to aim at when trying to pick nits about this company). Maybe $15 million of nice stuff and $5 million of crap is, on balance, more attractive than $20 million of nice stuff, $65 million of “eh” stuff, and $5 million of crap. The crap is as unattractive as it was before, so there’s no real difference there, and the remainder is significantly more attractive.

Of course I can’t pretend to know that that’s what they mean. I’m just not sure there’s a big point here, as there seem to me to be perfectly plausible alternative explanations (and much bigger things to aim at when trying to pick nits about this company).

]]> By: Tracy http://www.sequenceinc.com/fraudfiles/2007/05/02/is-overstockcom-misrepresenting-inventory/comment-page-1/#comment-34374 Tracy Thu, 03 May 2007 18:00:06 +0000 http://www.sequence-inc.com/fraudfiles/2007/05/02/is-overstockcom-misrepresenting-inventory/#comment-34374 Yet the've said the inventory is MORE ATTRACTIVE. That's the whole point here... I understand they've got crap. Why, then would they call it "more attractive"? Yet the’ve said the inventory is MORE ATTRACTIVE. That’s the whole point here… I understand they’ve got crap. Why, then would they call it “more attractive”?

]]> By: OLOC_the_nitwit http://www.sequenceinc.com/fraudfiles/2007/05/02/is-overstockcom-misrepresenting-inventory/comment-page-1/#comment-34367 OLOC_the_nitwit Thu, 03 May 2007 17:34:52 +0000 http://www.sequence-inc.com/fraudfiles/2007/05/02/is-overstockcom-misrepresenting-inventory/#comment-34367 Much as I'd like to agree with you about this, it seems to me that the more likely explanation is that it's not so easy to get rid of the crap inventory, so that as they reduced the large pile they had, the crap amount remained relatively stable, because they still had it. Thus it became a larger percentage of what they had left. Given the way businesses tend to operate, I don't find that particularly unlikely. Are you going to devote your time to moving out the inventory that nobody wants? Or are you more likely to spend time trying to do things that will increase revenue? To me, the important question is this one: how can the same business go from $90ish million in inventory to $20ish million? Were they idiots then, or are they idiots now? Much as I’d like to agree with you about this, it seems to me that the more likely explanation is that it’s not so easy to get rid of the crap inventory, so that as they reduced the large pile they had, the crap amount remained relatively stable, because they still had it. Thus it became a larger percentage of what they had left. Given the way businesses tend to operate, I don’t find that particularly unlikely. Are you going to devote your time to moving out the inventory that nobody wants? Or are you more likely to spend time trying to do things that will increase revenue?

To me, the important question is this one: how can the same business go from $90ish million in inventory to $20ish million? Were they idiots then, or are they idiots now?

]]> By: Tracy http://www.sequenceinc.com/fraudfiles/2007/05/02/is-overstockcom-misrepresenting-inventory/comment-page-1/#comment-34330 Tracy Thu, 03 May 2007 16:16:04 +0000 http://www.sequence-inc.com/fraudfiles/2007/05/02/is-overstockcom-misrepresenting-inventory/#comment-34330 The reserve for returns is a separate item. Per the 10-K: "The reserve for returns was $5.6 million and $3.6 million as of December 31, 2005 and 2006, respectively." You may also notice that the decreased reserve gave the company $2 million in additional income for 2006... The reserve for returns is a separate item. Per the 10-K:

“The reserve for returns was $5.6 million and $3.6 million as of December 31, 2005 and 2006, respectively.”

You may also notice that the decreased reserve gave the company $2 million in additional income for 2006…

]]> By: C http://www.sequenceinc.com/fraudfiles/2007/05/02/is-overstockcom-misrepresenting-inventory/comment-page-1/#comment-34328 C Thu, 03 May 2007 16:12:15 +0000 http://www.sequence-inc.com/fraudfiles/2007/05/02/is-overstockcom-misrepresenting-inventory/#comment-34328 Tracy, Is it possible that the inventory reserve # includes reserves for returned mechandise? -C Tracy,

Is it possible that the inventory reserve # includes reserves for returned mechandise?

-C

]]>