Overstock.com Inc(NASDAQ: OSTK) stock lost over 10.8% on March 16th, 2018 (as of 11:35AM EDT; Source: Google finance) leading to a total fall of around 35.9% in the last four weeks. Management views the performance as a “Terrible quarter” which led to the stock decline.
For fiscal year of 2017, the group’s revenue fell 3% yoy to $1.7 billion while the pre-tax loss was ($47.7) million. The Net loss was ($109.9M) as compared to $12.5 million in pcp. For the fourth quarter of 2017, the group’s revenue fell 13% yoy to $456 million.
Given this pressure, the group engaged Guggenheim to consider strategic alternatives, with one of them being a sale of their ecommerce assets. The group’s ecommerce business had its second annual pre-tax loss ($25 million) in nine years due to competitor called Wayfair in the last four years. But, for the first time the group is adopting the classic internet “growth strategy”. The group is offering a full valuation allowance on their deferred tax assets, leading to a $59 million non-cash tax charge in 2017. Moreover, the effect of Trump’s Tax Cuts and Jobs Act has created another $25 million non-cash tax charge in 2017, mainly on the back of the reduction of the corporate tax rate.
Meanwhile, the group’s blockchain enterprises under Medici are progressing and had a strong head start in a number of products under development. DeSoto, Bitt, and tZERO are mainly recogised, but there are some other developments within Medici that bear watching.
Meanwhile, the group along with Siebert Financial launched the Muriel Siebert discounted online trading platform through Overstock.com’s FinanceHub™. The platform, allows any investor in America accessing the Siebert portal through Overstock.com’s FinanceHub™ with the opportunity to conduct trades of US equities at discounted prices. Members of Overstock’s Club O Gold loyalty program would be charged $1.99 per trade, while non-Club O Gold members will be charged $2.99 per trade. tZERO, the fintech subsidiary of the group reported to buy a 24 percent ownership stake in StockCross Financial Services, Inc., a FINRA member firm and a U.S. DTCC member Firm.