Chalk up another problem for Overstock.com (NASDAQ: OSTK), the failing online retailer run by the wacky CEO Patrick Byrne. Yet this law enforcement investigation doesn't appear to come with any "celebration" by Byrne.
Byrne is usually proud of the company's failures, but the announcement of the latest law enforcement investigation was buried deep in a press release about the latest set of quarterly losses: On April 15, 2008, we received a letter from the Office of the District Attorney of Marin County, California, stating that the District Attorneys of Marin and four other counties in California have begun an investigation into the way we advertise products for sale, together with an administrative subpoena seeking related information and documents. We follow industry advertising practices and we intend to respond fully to the subpoena and cooperate with the investigation.
This investigation is in addition to the ongoing investigation by the SEC, as well as the litigation between Overstock and Gradient Analytics. Gradient sharply criticized Overstock in its research reports and Byrne and company cried that the reports were not true. (Oddly enough, the company still has not turned a profit several years later, and is still a horrible investment.)
Note to Patrick Byrne: Those who have bad things to say about Overstock, its business model, its operations, and its never-ending financial losses aren't necessarily short sellers who are trying to profit off bad news. Many of them are realists who have figured out how awful your company is. Sorry, but sometimes the truth hurts.
Tracy L. Coenen, CPA, MBA, CFE, performs fraud examinations and financial investigations for her company Sequence Inc. Forensic Accounting, and is the author of Essentials of Corporate Fraud.











Reader Comments (Page 1 of 4)
4-20-2008 @ 1:40AM
Sherlock said...
Bryne should be proud to be investigated by the criminal rogues at the Marin DAs office.
JO
4-21-2008 @ 11:08AM
Betty said...
I have shopped with Overstock for a long time and have been totally satisfied with each and every purchase. They have excellent quality, fast turnaround and all shipments and immediate response if an item needs to be returned. I'm a loyal customer and will continue to be one!
4-21-2008 @ 11:10AM
Cheryl said...
I hate to hear that. I like to shop this web site, sometimes. I have found some nice and reasonably priced gifts on it. Oh well, if they haven't done anything wrong they will be ok and if they haven't then they will have to pay the price for being stupid, just like people do. Don't break the laws and if you don't like a law go to court or to your legisature and either try and get it over turned or changed before you break it. The price for doing wrong just isn't worth it.
4-21-2008 @ 11:22AM
LeAnn said...
We shopped with Overstock.com and were scammed out of $1200.00. Overstock claimed they were just a medium in the transaction, that the "gentleman" who was attempting to sell our our item, did not work for Overstock. We gave our payment in confidence on a secure site, and in turn were charged 3 times for one item we never received. Bunch of bunk if you ask me.
4-21-2008 @ 11:42AM
MasterofMeander said...
The only question is "what's taken so long?" Overstock taught me there's a reason newer items need reconditioning: they were bad to begin with.
4-21-2008 @ 11:47AM
DEBBIE said...
I HAVE SHOPPED AT OVERSTOCKED AND HATED MY EXPERIENCE. I ALWAYS RECEIVED THE WRONG ITEM. THEY LET YOU TO BELIEVE THEY HAVE CERTAIN PRODUCTS AND WHEN YOU RECIVE THEM ITS SOME OTHER BRAND.
4-21-2008 @ 11:49AM
Hugh said...
The only problem i have had with Overstock is that they sent me an item that I didn't pruchase and and I trouble returning it.
4-21-2008 @ 11:50AM
katzenmutter said...
I bought a great coffee table through Overstock, a really convenient model with 4 drawers and a full shelf under the top. It's as solid as granite. I've had good luck with them; this makes me sad.
4-21-2008 @ 11:59AM
Steph said...
I have shopped with Overstock several times and haven't had any problems. The only bad thing I can say is that their sales and percent off claims are not as good as they seem. Most items can be found for the same price on other sites, including the manufacturer's site!
4-21-2008 @ 12:04PM
Rachell said...
I LOVE overstock.com..
It.s my Prime household shopping networking online.
The customer service is ALWAYS helpful and the items are A++++ quality.
Returns are never a problem...Although I only had 3 returns out of hundreds of purchases, because almost 99% arrived accurately!!!
The staff is courteous, helpful, and prifessional.
God forbid that this online shopping will not be here.
rockimg@aol.com
4-21-2008 @ 12:07PM
shopper said...
I haven't bought much from overstock. But one time I ordered a bulk pack of 2 bean bag chairs. They were shipped in seperate containers and I only received 1. It took weeks to get it settled, customer service couldn't tell me if it got shipped as 2 packages or one and my space was not ready yet so I didn't want to open the package. In the end they reshipped the whole order instead of just sending me a second one. The whole thing was handled pretty poorly.
4-21-2008 @ 12:14PM
JMarie said...
I have shopped at Overstock.com a few times and I have always received everything in my order correctly. I am a satified customer.
4-21-2008 @ 12:18PM
JMarie said...
A correction to my previous post:
I have shopped at Overstock.com a few times and I have always received everything in my order correctly. I am a SATISFIED customer.
4-21-2008 @ 12:22PM
Michelle said...
I had a horrible experience with Overstock.com and will never shop there again. They sent me a clock that did not work and absolutely refused to refund me the money.
4-21-2008 @ 12:47PM
Faith said...
I have never had a problen with them. Their prices are fantastic, they offer quality merchandise and delivery is prompt. So, what's the problem again??????????
4-21-2008 @ 12:58PM
CAROL said...
I ALWAYS SHOP AT OVERSTOCK! FAST SHIPPING, NO PROBLEMS.
4-21-2008 @ 1:02PM
Kimberly Roderick said...
I love Overstock. I have made numerous purchases from them. Some of the purchase being a Dyson Vaccuum, and a wrought iron bed. I have been pleased with the quality of the products and the quick shipping. I am sorry to hear that they are experiencing problems and that others have had issues with them as well. I will stay loyal to Overstock to the end!
4-21-2008 @ 1:08PM
veryuniq11 said...
I shop online at woggifts.com. I've never had to return anything. They send me coupons sometimes for up to 30% off my entire order making the prices very competitive, excellent selection and very fine quality products. They have free S/H.
I have given 2 bedrooms and my kitchen complete makeovers with woggifts.com products and saved big $$$. I am doing my living room and den next from their catalog. Hope this helps.
4-21-2008 @ 1:11PM
kelli said...
I was a loyal customer for many yrs buying many things including furniture. The prices were great and no prob with shipping. But, about 2 yrs ago the prices spiked on many items and I could no longer find the great deals as in past. I now shop at other online sites where prices are lower. While other online shopping sites offer sales with 25% + off and overstock offers only 10% off, I have to follow the deals. Overstock needs to stay competitive in pricing to grab the customers and cure their economic woes.
4-21-2008 @ 1:21PM
Michael said...
I read the report and the quarterly out look. It seems to me, Marin Co., CA. is upset over loss of tax revenue due to online purchasing. I see no reason what so ever to devalue this company in the press. I shop Overstock and have been exceptionally satisfied. Bought my wife a thirtyth Aniversary 3 stone diamond, top quality and excellant clarity for a fraction of what I would have paid locally. See locally the mark it up 300%