Wednesday, December 28, 2005

Hemorrhaging Still: OSTK Contest Overstock

Overstock was downgraded on Wednesday
" $28 by WR Hambrecht, following recent press that confirms that OSTK Q4 sales were "a bit disappointing" and that a loss was likely. Based on the firms interpretation of the co's C.E.O, they are reducing their Q4:05 EPS ests from $0.06 to a loss of ($0.05). The firm also cut their 2006 EPS estimate from a loss of ($0.55) to a loss of ($0.95), as they believe the co is likely to struggle with excess inventory into the first quarter of next year...."
To celebrate OSTK's woes, we're throwing a contest to see who can forecast when Overstock will hit our $20 price target. The prize is a gift certificate and/or cash and you have until midnight to reply to one of our email addresses.

With negative cash flow and abysmal operational problems, OSTK's clearly in the gutter. Shares are down 24% since we adamantly said sell less than two weeks ago.

Top line growth will certainly slow in the next few years as they attempt to move margins to a profitable level.

Lest you forgot, their CEO is totally insane. CEOs are paid to run operations, not crusades -- Byrne is running out of powder.

Our sources think it's time for Overstock to go private -- sometimes a lizard has to lose its tail in order to survive, right?

In fact, pundits are already drawing parallels between Byrne and Scott Blum, CEO of, a dot.conner that imploded and was finally taken private by Blum himself for 17 cents a share.

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