Manipulation of Earnings in Overstock.com Press Release (Are You Surprised?)

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Overstock Patrick BryneToday convicted felon Sam Antar has an exciting piece on his blog about Overstock.com (NASDAQ:OSTK) and how it fudged its earnings figures in Friday’s press release, caused a short squeeze right before options expired, and continued on Patrick Byrne’s path of misleading investors.

It all began with a press release reporting 2008 earnings, saying that total revenue was $200.7 million versus $157.9 million for the same period in 2007, which was a 27% increase.

Of course, those figures were not on the up-and-up. *gasp*

The comparison of the revenue figures was faulty because 2008 figures were calculated on a GAAP basis, while 2007 figures were on a non-GAAP basis. The 2008 figures included revenue that would have been part of 2007 using Overstock’s non-GAAP reporting methodology. (So 2008 figures were bumped up, when compared to 2007 figures.) Continue reading

Overstock.com: Pretend Accounting Measures Muddy the Waters

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Patrick Byrne Overstock Conspiracy TheoryI present for you today one (just one) example of the accounting shenanigans at Overstock.com Inc. (NASDAQ:OSTK) to demonstrate the deception of management. This accounting concept is quite elementary, and it is called EBITDA.

EBITDA = Earnings Before Interest, Taxes, Depreciation and Amortization

Accountants and investors generally agree on what all of those items (earnings, interest, taxes, depreciation, amortization) are. So the computation of EBITDA is quite simple, if presented with accurate and complete financial statements. Continue reading

Overstock.com: Year-End Revenues Fall Far Short of Byrne’s Hype

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If Patrick Byrne is good at anything, it’s hyping Overstock.com (NASDAQ:OSTK) when the company is not deserving of the hype. To hear him tell it in real time, everything is rosy and the company is doing stellar and investors will surely be impressed. (It’s only a couple of years later that he admits to “screwing up” the company.)

The fourth quarter earnings release showed quarterly revenue up 2% to $300 million, and annual revenue down 2% to $768.8 million. Neither of these are particularly impressive.

And they are even less impressive when you look at them in conjunction with an interview Patrick Bryne gave CNBC on December 7, 2007. According to the company’s press release about the interview: Continue reading