Month: July 2007

The Overstock.com earnings conference call translated

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Conference call participants:
David Chidester – Overstock.com, Inc. SVP Finance
Dr. Patrick Byrne – Overstock.com, Inc. Chairman, CEO
Jason Lindsey – Overstock.com, Inc. President, COO

Translator:
Tracy Coenen – Fraud Investigator

On with the show…

David Chidester: Total revenue for the quarter was down 6% to $149 million. This was an improvement in growth from the first quarter when sales were down 11%.

Translation: We did badly. But less badly than last quarter. Better badly, if you will.

David Chidester: Gross margin expanded to an all-time high of 17.7%, up 370 basis points over last year. The gains in gross margin are due to significant improvement in our direct margins, which are up 610 basis points year-over-year to 16.7%, and an additional 150 basis point improvement in our fulfillment partner margins to 18.1%, both all-time highs. This is also a 170 basis point sequential improvement.

Translation: Catch us if you can! Was it a real improvement? Or did we dip into our reserves for a fake improvement? You’ll never know!

Read moreThe Overstock.com earnings conference call translated

Patrick Byrne, Overstock.com CEO has surprised me

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After all the corporate crimes I’ve seen in the last 13-or-so years, it takes a lot to surprise me. Really, it does.

But Patrick Byrne, the nutty CEO of Overstock.com has suprised me. Now, I’d like to think that my threshhold for surprise is pretty high with him. I mean, this is the guy who talks about Sith Lord conspiracies on official, recorded conference calls with Wall Street. So you pretty much have to expect stupid things out of him.

Read morePatrick Byrne, Overstock.com CEO has surprised me

Huge Write-Off on the Horizon for MGIC

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Mortgage insurer MGIC Investment Corp is looking at a huge write-off of a $1.03  billion investment in Credit-Based Asset Servicing and Securitization LLC (C-BASS). The company reported yesterday that its investment in C-BASS has become materially impaired, meaning the value has dropped very significantly.

Read moreHuge Write-Off on the Horizon for MGIC

Usana Insider Posts for the Last Time

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Insider Post Dramatic Exit

movies are the place where i find escape from guilt and shame. in the movies there is an ending that is not soon forgotten. this post is my exit and will live up to the promise made about providing proof of false earnings. the company released false earnings in the second quarter. the quarter was not successful. you will find all the proof you need from the following cash payments made to the salt lake city based construction company. numbers and accountants confuse me. lies do not. barbara’s computer receives monthly statements from camco. a mailed bill and emailed bill.

Read moreUsana Insider Posts for the Last Time

Usana’s Naked Short Selling Conspiracy Theory

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Is there something in the water in Utah? Or have Usana Health Sciences executives been lunching with Patrick Byrne, CEO of Overstock.com?

It seems that Byrne’s naked short selling conspiracy theories have worn off on Usana. Usana executives haven’t been caught whispering about Sith Lords yet, but for all we know, it’s only a matter of time.

Byrne is convinced that Overstock’s dwindling stock price is completely unrelated to the fact that Overstock is a poorly run company that can’t turn a profit. No. The problem is naked short sellers of the stock.

Read moreUsana’s Naked Short Selling Conspiracy Theory

Findings Affirmed by Lab in Usana Health Sciences Case

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In the original report issued by Fraud Discovery Institute on Usana Health Sciences, Usana’s claim that its TenX Antioxidant Blast Bar had 10 times the antioxidant power of any juice was debunked.

The Usana website made this claim:

With 10 times the antioxidant power of any juice products currently on the market†, TENX™ ANTIOXIDANT BLAST is unlike anything ever seen before.

Read moreFindings Affirmed by Lab in Usana Health Sciences Case

5 Years of Sarbanes-Oxley

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That’s right. We are fast approaching the 5 year anniversary of the passing of the Sarbanes-Oxley Act of 2002. Who’s celebrating? Well surely the consultants and accountants who have made a fortune off SOX consulting are celebrating a bit.

Over at Audit Trail, they have some surprising results of a survey of public companies. The results are surprising to me because I generally believe that the cost of Sarbanes-Oxley has far outweighed the little benefit that has been gained. Yet executives apparently think SOX has been positive:

Read more5 Years of Sarbanes-Oxley

What Frauds Are Prevalent, And Preventable

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Compliance Week
By Jaclyn Jaeger

While government officials congratulate themselves for a job well done since establishing the Corporate Fraud Task Force five years ago, experts tell Compliance Week that institutional fraud is still a rampant problem.

According to a corporate fraud report released in June by Oversight Systems, 76 percent of certified fraud examiners believe corporate deception has increased since 2002. The report also said that 56 percent of respondents have personally observed misconduct in the past year.The findings contrast with the 1,236 corporate fraud convictions that Deputy Attorney General Paul McNulty touted at a recent reception marking the fifth anniversary of the task force. Those enforcement actions included the convictions of 214 chief executive officers and presidents, 123 vice presidents, 53 chief financial officers, and 23 corporate counsels, McNulty said.

Of fraud schemes most often committed, revenue recognition is by far the most prevalent at 41 percent, according to SEC enforcement fraud research conducted by Frank Hydoski and Toby Bishop, co-directors of the Deloitte Forensic Center. The SEC enforcement releases covered 2002 to 2006.

Read moreWhat Frauds Are Prevalent, And Preventable