Anyone with their eyes open knows that Skippy is the Jeffrey Dahmer of the corporate world. To my way of thinking, making so much noise over what is the financial equivalent of corporate jaywalking detracts from his far more serious offenses.

First of all, their calculation of “EBITDA” is not EBITDA at all. It is a made-up calculation, and calling it EBITDA violates both SEC guidance and accounting rules. So for that reason alone, Overstalk has been and continues to be out of compliance with reporting standards.

Further, this is the SECOND time several years will have been restated. A-ha on that as well, because there’s simply no excuse for it. Being dumb isn’t criminal. But it’s still being dumb.

You may say that the net effect over the years is immaterial, but on an annual basis it is material. In strict dollar terms, the adjustments don’t meet typical materiality thresholds. But materiality cannot only be determined only with numbers… situational factors must be examined as well. Based on Overstalk’s history of shoddy accounting, I think the errors make this material.

Overstalk’s explanation that they did “reasonability testing” when implementing a new system that they KNEW had faults in recording transactions shows you just how stupid they are. Actual reconciliations of numbers should have been done and individual items should have been traced through the system until they were sure of what was and was not being recorded.

Byrne and his team are completely incompetent. This situation is just one of many examples.

With that being said, it’s a little hard to stomach the “AH HA!” factor on the part of Skippy’s other detractors that has accompanied Overstock’s disclosure in their 8-K that revenues for the past five and half years need to be restated.

Not to make light of $12.9 million, for there will come a time when Overstock will wish they had a spare $12.9 million lying around, this restatement is less than 0.4% of the gross revenues generated for the period in question. It’s a very minor detail. It was sloppy on Overstock’s part, but sloppy is what we’ve come to expect of this enterprise. More importantly, there is no reason to suspect that this minor bookkeeping gaffe was in any way an attempt to mislead investors about Overstock’s operations or their ongoing condition.

Even with the sloppy numbers Overstock has been releasing for the past five and half years, astute investors could tell this company wasn’t going anywhere. There are plenty of issues with Skippy Byrne and Overstock that border on fraud; this is not one of them. Let’s not add to the growing number of people right now who want to criminalize stupidity.