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 the rest of this entry »
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.
Overstock had its earnings conference call this morning. I spared myself the agony of listening to half-baked answers about all the accounting and inventory issues of the company. (I may go take a peek at the transcript, though. I can speed read and minimize the pain.)
During the conference call, Patrick Byrne posted a message on the Investor Village message board. Seriously. I said during.
Gary Weiss says he saw this on the message board at 11:43am Eastern time. While the conference call which began at 11:00am Eastern time was still ongoing. (Note that Hannibal is one of Patrick’s online aliases, and as we’ve seen so many times in the past, he did not identify himself as Patrick Byrne, CEO of Overstock… Regulation FD be damned!)
Do you mean to tell me that the company’s CEO can’t even be bothered to give his full attention to a conference call for his own company????
My advice to Patrick: Focus a little more on running your company, and you might actually turn a profit someday. I know. Chances are slim. But could you at least make it look like you’re trying?
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.
MGIC has a direct investment in C-BASS of $516 million. MGIC is also in the process of acquiring Radian Group Inc., which also has an investment of $518 million in C-BASS. C-BASS was created in 1996 by MGIC and some other companies, but has more recently been owned by C-BASS management, MGIC, and Radian.
This development is said to be related to the problems in subprime lending, which began having serious problems in February. The problems have been escalating since then, and the number of mortgage lenders filing bankruptcy or going out of business seems to be rising.
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.
in the quarter just released by us the amount of money cash paid for the construction project were a lie. big inflated lie. here is the key to unlocking the lie. two jobs with camco current and ongoing. The 13,046,700 ‘usana 3’ job and the 5,300,000 ‘usana warehouse’ project. total job at headquarters appr 18,346,700.
payments made in 07 to camco from us are much less than we reported. follow these payments. January 802,727 february 885,644 march 790,348 april 748,226 may 852,047 june 303,725. we have paid 10,006,700 for ‘usana 3’ and 303,725 for proj. ‘warehouse’. Still due is 3,040,000 for ‘usana 3’ and 5,000,000 for warehouse. the permit for the warehouse was 27,600 paid in april 07. total paid with both proj. 10,338,025 and amount still due for projects is 8,040,000.
there is a payment now late to camco for 922,000 past due and not paid as buying stock is the preference. the terms used for payments are draws and progressive and retention. stay focused on cash paid out to camco. compare it with what we did pay to camco in the second quarter. much less was paid than what we said they received. something about a graveyard account. you have the proof.
This week’s enlightening posts about fraud, scams, and schemes…
Digerati Life comments on mortgage fraudster Casey Serin’s lost marriage, as discussed in a mass email he sent out. Apparently, he thinks blogging (and not his poor financial choices and criminal acts) destroyed his marriage.
Leon Gettler at SOX First mentions a new study by the Deloitte Forensic Center which looked at how many “accounting and auditing enforcement releases”(related to financial statement fraud) have been released throughout the years. The releases have gone up since pre-Sarbanes Oxley, which might suggest a problem.
The Better Business Bureau wants you to check your baby’s credit. No, it’s not a joke. Fraudsters can steal a child’s identity just as easily as an adult’s, so it’s important to keep tabs on it.
Wenchypoo blasts someone’s ridiculous idea to turn the United States into even more of a welfare country. The idea is that the government takes away almost all of our earnings, and puts it into accounts for us to be used for certain things such as health, education, etc. Sounds good? Not so much. Socialism doesn’t work. Wealth redistribution doesn’t work. Give people an incentive to work hard and better themselves. That actually works.
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.
And now Usana is blaming naked short sellers in cahoots with Barry Minkow of the Fraud Discovery Institute for its problems. None of these alleged naked short sellers have been identified, but why bother with silly little details such as that?
I finally got around to taking a look at Usana’s amended complaint in its lawsuit against Barry and FDI. What it lacks in substance, it makes up for in tales of conspiracies. Read the rest of this entry »
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.
And the below video by Usana (starring none other than Myron Wentz) touted the antioxidants and emphasized a serving when Wentz said, “…packed into one delicious serving.”
Is anyone surprised anymore when they learn about another fraud bust, courtesy of Barry Minkow and his Fraud Discovery Institute?
This time it’s Pacific Wealth Management. And it seems that the press has largely ignored this one. The SEC is alleging that Pacific Wealth Management was selling unregistered securities, with the investment offerings ranging from real estate to foreign currency. There were up to 800 investors who mortgaged their houses to invest with this company, and it is believed that they lost millions of dollars.
Tracy Coenen is a forensic accountant and fraud examiner who investigates white collar crimes, including cases of financial statement fraud, embezzlement, tax fraud, and insurance fraud. She is the author of Essentials of Corporate Fraud and more than 100 articles on fraud featured in industry publications.
