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Barron's takes a blistering look (subscription required) at Bidz.com (NASDAQ: BIDZ) and its executives' long history of relations with shady characters and, possibly, organized crime. You can read the Barron's piece for all the details but here are some key words: fencing, gambling, fencing, strip clubs, "oral copulation with a person under 14 through force or fear," porn shops, prostitution, etc.But wait: does any of that really matter? There's an argument to be made that if the company is solidly profitable, which it appears to be, and has reasonably sound corporate governance practices, then all those past relationships are just noise that, if anything, present a buying opportunity.
The problem, to me at least, is that there's plenty of other stuff at Bidz that doesn't quite add up. Back in March, ex-con turned fraud fighter Sam E. Antar raised questions about the company's accounting on his blog, and Andrew Left also seems to focus on the company's inventory issues.
Without getting into financial jargon, I can't figure out what makes Bidz so special: it reports strong sales and earnings -- much stronger returns than industry leader Blue Nile (NASDAQ: NILE) -- and Bidz's website is incredibly unimpressive. When you look at the quality of the site and then compare it to the impressive financials, something smells bad. Caveat emptor.
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Reader Comments (Page 1 of 1)
9-02-2008 @ 2:39PM
Chris said...
"Incredibly unimpressive" thats really helpful information you are providing. Thanks for your opinion on the look of the site. I am sure people are now paitently waiting for your analysis on the design of Amazon and Ebay.
9-02-2008 @ 3:34PM
porch said...
Hey look, a fourth article today about BIDZ. And yet, nothing is new or different than what was writted nine months ago. Really, it is so transparent that BIDZ is getting based today all for one reason. To drive the stock price down. Because someone with influence (and a large short position) is paying people to rehash this nonsense. Why bring all this up again?? No really, answer the question!
9-02-2008 @ 9:12PM
kkkkramer said...
hehe! now the website is not impressive. Have you even tried to bid on it? Best customer support ever and the website is so easy that even my dog could bid. So give me a break! The only thing that smells bad here is your article.
9-09-2008 @ 12:03AM
market2 said...
I was a long-time seller on Bidz about 4 years ago. Much has changed. From my knowledge, they are a Russian based company. They once had about 100 vendors who at first were able to sell their jewelry too. Then Bidz had a new rule that no one else was able to sell jewelry,only they were because of the competition. I did quite well selling other items and was there for about a year and a half until they notified me that they were looking for sellers with more of an 'upscale' flair. Then they gradually, one at a time, started letting vendors go, weeding us out. I used to check back at the site from time to time and one of their new policies if you wanted to register as a seller, was that you had to guarantee a $500 per month minimum fee payment as part of your seller fees. This was a long time ago. Being an online seller with my own website, going into my 7th year now, selling my own jewelry, I can tell you the quality of the gemstones will vary. Some are good and some shouldnt be even called 'diamonds'. However, pretty much all the items listed (would love to say 'all') have a HEAVILY inflated 'Retail Value', where the item is only worth about ONE TENTH of the stated amount in the real world! I would know, I am a jeweler myself for the past 3 years.