Overstock.com: The “turnaround” that wasn’t

2006 was a bad year for Overstock.com (NASDAQ:OSTK). (As if any year isn’t bad for them?) Jason Lindsey even said that the 2006 numbers were “bad on purpose”:

“All of the things we have talked about before as far as classifying all of our SKUs as either red and green and 80% of our — excuse me, 20% of our inventory was doing 80% of our gross profits, or even more than that. We took all that to heart in the fourth quarter and although the fourth quarter results are very bad, and I admit they are very bad, they were bad on purpose. In other words, we used the fourth quarter to get rid of all the slow-moving inventory. I am quite pleased with the inventory balances we have now.”

Patrick Byrne spent much of 2007 bragging about the “turnaround” that the company was having:

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