Sam Antar, formerly the CFO of Crazy Eddie, known in the New York area for over-the-top commercials that scared the hell out of kids (well, me at least), knows his way around a questionable balance sheet. For 15 years, he was the executive chef of book-cooking, ultimately taking a guilty plea to conspiracy and obstruction of justice charges. He stayed out of the clink by taking the stand on the government's side at a 1993 trial, ultimately sending his cousin, Eddie Antar to prison for seven years or so.

Crooks make the best cops, so to speak, and Antar is putting his skills to work. He's out hunting for accounting fraud and sending his analyses off to the SEC. On his blog, the former CFO laid out what he called a "bulletproof case" against Overstock.com (NASDAQ: OSTK) – a company that the SEC had been investigating since 2006. The inquiry has been reopened.

Overstock.com (NASDAQ: OSTK) announced on Thursday that it received a notice from the SEC stating that the company was under investigation concerning its "previously-announced restatements of its financial statements in 2006 and 2008 and other matters."

CEO Patrick Byrne noted in the press release that "All of the matters that are the subject of the subpoena have been thoroughly disclosed and we are disappointed, given the extensive public disclosures Overstock has previously made, that the SEC, given all of the challenges it faces, has apparently chosen to expend time and resources on another investigation of Overstock. Rest assured, I will continue to speak out as I have on the shortcomings of our financial regulatory system."

Vultures can do very well capitalizing on the difficulties of others. That is the case with Overstock (NASDAQ: OSTK).

The company buys excess inventory from struggling brick and mortar retailers and sells the goods online. By passing savings on to the customer, OSTK is positioned to beat the pants off the competition.

In the wake of the dot-com crash, short sellers pummeled this stock without any regard for its real business prospects. Those prospects have only improved in the time since.

The poor economy hasn't helped retail spending, that's for sure. In fact, it could be argued that market saturation has really hurt certain segments of the retail market.

Take Starbucks (NASDAQ: SBUX). In the past few years, you couldn't walk down some city streets and not run into multiple Starbucks outlets. Today, Starbucks is scrambling to reduce the number of stores.

Online retailers, on the other hand, are in a completely different position. Not only is there still plenty of room for expansion in the online retail space, but e-tailers have key advantages over their brick-and-mortar counterparts.

Here are some highlights from this past week's earnings coverage from BloggingStocks:

• American Express Co. (NYSE: AXP) Q1 profit blew away estimates, sending shares soaring.
• Apple Inc. (NASDAQ: AAPL) topped analysts expectations and offered conservative guidance.
• Boeing Co. (NYSE: BA) reported better-than-expected results but warned that if faced challenges.
• Coach Inc. (NYSE: COH) topped Q3 profit estimates and announced the start of quarterly dividends.
• Continental Airlines Inc. (NYSE: CAL) widened is net loss in Q1 but still beat low Wall Street estimates.

Following fourth quarter earnings that sent shares of Overstock.com (NASDAQ: OSTK) soaring, Stifel Nicolaus downgraded the stock from "hold" to "sell."

According to Briefing.com "The firm says not appropriately reflected in Friday's share price move, was the fact that the quarter benefited from a $1.8 mln gain in partner gross profit dollars relating to payments from partners who were under-billed earlier in the year and a $3.7 mln one-time benefit from a bonus reversal in the quarter as the company decided not to distribute profit sharing and senior executives were not paid bonuses."

When Overstock.com (NASDAQ: OSTK) reported its third quarter earnings back in October, it included a restatement of past earnings because of accounting issues. When CEO Patrick Byrne went around predicting that the company would achieve profitability, a lot of observers yawned: This guy has been threatening a positive EBITDA every year since the company went public and, to the delight of short-sellers, it's been a classic case of over-promise, under-deliver.

In May, Byrne predicted that 2008 would be a profitable year but for the first nine months of 2008, the company lost $13.6 million.

Of course we haven't seen Overstock's fourth quarter results yet, but if the data from ComScore is any indication, they'll have a hard time propelling the company to profitability. According to ComScore, Overstock.com saw its Web traffic decline 16% for the holiday season. Amazon (NASDAQ: AMZN) was the big winner among internet retailers with an increase of 7%.

Given the high expectations set by Byrne's ever ebullient "forward-looking statements" the fourth quarter results seem likely to disappoint.

When the Bureau of Economic Research declared that the recession had officially begun in December 2007, the entire retail sector shrugged its shoulders and said, "No kidding."

Shares of companies that deal directly with the consumer, except for the deep discount retailers, have known for some time that the economy was struggling. Sales have been declining steadily and, with the deteriorating operating environment, shares of the retail stocks have been absolutely crushed.

The entire retail group is one of the biggest losers in the market this year, with some stocks down 80% to 90%.

That said, those retailers that offer big discounts, including Wal-Mart (NYSE: WMT) and Big Lots (NYSE: BIG), are doing much better on a relative basis.

Quarterly earnings calls are a great opportunity for investors to hear directly from the companies they've invested in and to get clarity from management when they answer questions posed by analysts. I listen to hundreds of calls every quarter, and I'm constantly surprised (and sometimes confused!) by the responses offered by management. This is the first in a series of occasional posts on some memorable quarterly earnings call moments.

Overstock.com (NASDAQ: OSTK). Chairman and CEO Patrick Byrne never ceases to . . . amaze me. While I sometimes come away from their quarterly call more perplexed than ever, Byrne's responses to questions certainly stand out. Here are some of the more memorable comments from their latest quarterly call, held on October 24, 2008.

While commenting on accounting errors that resulted in a financial restatement, Patrick Byrne explained it this way:

"We had been managing to a yardstick that turned out to have a bit of rubber in it at the end of the quarter."

Well, that certainly clarifies things!

Moving on to a conversation on EBITDA and Cap Ex, we hear that OSTK is:

". . . like the proverbial boa constrictor digesting a baby hippo. We ate the baby hippo about three years ago -- actually right now -- and it's moved its way through the boa constrictor."

Even as the company continues to lose money hand over fist and face continued accounting woes, Overstock.com (NASDAQ: OSTK) has taken the time to put together a YouTube video full of clips featuring its chairman and CEO Patrick Byrne going on various cable shows and ranting and raving about the "systemic risk" posed by naked short selling. Back in 2005, he said that "Continued abusive short-selling practices pose strong potential for a systemic Wall Street meltdown that will undermine our capital system and our economic strength."

Now, with the market in the toilet, Byrne is going around doing the "I told you so" victory lap.

Newsflash: the current mess has nothing to do with naked short selling. Nothing. Absolutely nothing. In fact, the trouble at subprime lenders and large financial institutions was predicted by short sellers. The fact that naked short selling is now in the spotlight is indicative of what I've been writing for a long time: bad companies that are losing money rapidly blame short sellers. Now that once great companies are now bad companies, they blame short sellers too!

And what did Patrick Byrne have to say about sloppy lending practices and cheap credit back at the height of the bubble? In July of 2006 he referred to subprime toilet bowl Novastar Financial as an "awesome firm."

Hey, Patrick, stick to what you do best: unrealistic and unfounded predictions of profitability and accounting scandals.

Shares of Overstock.com (NASDAQ: OSTK) fell sharply on Friday after the company reported yet another quarterly loss and disclosed that it would have to restate its earnings. In the press release announcing the restatement and earnings, CEO Patrick Byrne told investors that "The total effect of the errors over the five and a half year period (during which we generated nearly $3.5 billion in revenues) is a reduction in revenue of $12.9 million and a $10.3 million increase to cumulative net loss."

In the grand scheme of things, this isn't material. And there's certainly no reason to think this is anything other than an error -- a result of Overstock being a sloppy, poorly run company with a distracted CEO battling the imaginary demon of naked short selling, but not accounting "fraud."

Here's the best part: One of the imaginary demons that Patrick Byrne was out battling was Gradient Analytics, a small independent research outfit that Overstock sued for putting out negative research reports. Earlier this month, the lawsuit was settled. In that press release, Overstock said that "Gradient now believes that, to the best of its knowledge, Overstock's stated accounting policies did in fact conform with Generally Accepted Accounting Principles (GAAP) and regrets any prior statements to the contrary."

Here's my question: was Overstock aware of the need for an earnings restatement when it settled the lawsuit? Or did it push through a settlement just before it disclosed that Gradient's allegations of accounting issues were proven to be right on the money? We may never know.

The larger point is that Overstock shareholders would be much better off if Patrick Byrne devoted his energy to managing his company, not lashing out at anyone who says mean things about him.

Given the weakness of consumer spending, a lot of investors are worried that Overstock.com (NASDAQ: OSTK) may not come through with the profitable year the CEO Patrick Byrne has gone on the record as predicting.

Indeed this necklace, pointed out by a poster on a Yahoo! message board, may be a bad omen:

Sterling Silver Moveable Toilet Necklace

• Enhance your style with this sterling silver necklace
• Pendant features a fun and edgy toilet design with a lid that opens and closes
• Jewelry includes a princess-length chain

If you want it -- and I'm sure you do -- you can buy one at Overstock. It's only $16.99.

It looks like this toilet bowl of a company could be releasing some pretty crappy numbers.

Overstock.com, Inc. (NASDAQ: OSTK) can't seem to make money selling chatchkes online, so the company has shifted its business model toward suing anyone and everyone who has ever thought a negative though about Overstock, its business model, or its controversial CEO Patrick Byrne.

Today the company announced that it has settled its lawsuit against Gradient Analytics, which it had sued for publishing negative research that played a role in driving down the company's stock price. In a press release issued by Overstock, Gradient said that "Having reviewed all SECfilings, relevant accounting literature, and all other information available to it, Gradient now believes that, to the best of its knowledge, Overstock's stated accounting policies did in fact conform with Generally Accepted Accounting Principles (GAAP) and regrets any prior statements to the contrary."

The company also said that directors it had previously suggested were not independent were in fact independent in accordance with NASD rules.

Is this a big victory for Overstock or just the end of a battle of attrition where the publicly-traded company had more cash to burn on legal fees than the small research shop? We'll never know.

But I'll make a bet right now: Overstock's earnings report for the fourth quarter will not include a massive one-time gain on the settlement of this litigation.

As for Gradient's most important claim -- that Overstock's business model is flawed and the company is unlikely to ever become solidly profitable -- there is no evidence to the contrary.

Overstock.com, Inc. (NASDAQ: OSTK) CEO Patrick Byrne is no stranger to bizarre paranoia and conspiratorial lunacy, but he actually appears to have topped himself in a YouTube interview with market pundit Don Harrold: "Everybody should go out and get sort of a two or three month supply of food and water for when there's a huge dislocation... There's nothing wrong with putting a thousand dollars worth of camping food in your basement."

Wow. And then he somehow links the whole stockpiling food thing to writing to politicians to complain about naked short selling. He then talked about Iran's plans for attacking the the east coast with nuclear weapons. Just so you don't think I'm making it up, watch the video below. He closed by saying that "Jim Cramer's a crook."

In the past, I've written about Overstock.com's (NASDAQ: OSTK) habit of issuing press releases to announce minor procedural victories in the deluge of lawsuits the company is a party to.

Apparently that only applies to victories. Last Tuesday, Online Media Daily reported that "Utah's highest state court has tossed a lawsuit accusing SmartBargains of engaging in unfair competition by displaying pop-up ads to Overstock.com visitors."

The Utah Supreme Court stated that "Overstock failed to show that SmartBargains' pop-ups, labeled with the SmartBargains' logo and appearing in a separate window on the top of Overstock's website, are deceptive, infringe a trademark, pass off SmartBargains' goods as those of Overstock's goods, or are likely to cause confusion."

Here's my question for Overstock and its controversial (to put it politely) CEO Patrick Byrne: why did Overstock issue a press release when it was dismissed from an antitrust lawsuit, but didn't make a similar announcement when a lawsuit it filed was dismissed. Even more hypocritical, Overstock issued a press release when it first filed the lawsuit back in 2004. If the filing of the lawsuit was material, isn't the dismissal equally material? It seems like a classic case of selective disclosure -- not illegal, just scummy.