Please ensure Javascript is enabled for purposes of website accessibility

Why Stock Was Slammed Monday

By Daniel Sparks – Sep 23, 2019 at 2:00PM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

Here are the latest reasons investors are fleeing shares of the e-commerce and blockchain company.

What happened

Shares of e-commerce and blockchain company (OSTK 4.19%) were hit hard on Monday, falling about 15% as of 12:50 p.m. EDT.

The stock's slide follows news that Overstock CFO Greg Iverson has resigned and that management revised its profitability outlook lower. This news comes about a month after founder and CEO Patrick Byrne resigned from the company following a press release in which he confirmed he was a part of some high-profile FBI probes involving Russia and Hilary Clinton.

A chalkboard sketch of a chart showing a stock price moving lower.

Image source: Getty Images.

So what

"Overstock's Chief Financial Officer Greg Iverson has resigned, effective September 17, 2019," said Overstock in a Sept. 23 press release. The company gave no explanation for Iverson's departure.

Taking over Iverson's role is Robert Hughes, who is currently president of Overstock subsidiary Medici Land Governance -- a real estate blockchain company. Hughes, however, is only a temporary solution. The company has begun searching for a permanent CFO, Overstock said.

Now what

Also concerning is the company's worsened outlook for profitability.

Previously, management expected $17.5 million in adjusted EBITDA (earnings before interest, taxes, depreciation, and amortization) in 2019, with "significant positive EBITDA" in Q3. But Overstock said on Monday that "actual Q3 results to date are at approximately break-even."

Looking out to Q4, management said it expects "modest positive adjusted EBITDA" but noted it will give more detailed guidance in its third-quarter earnings call.


Daniel Sparks has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned, Inc. Stock Quote, Inc.
$25.37 (4.19%) $1.02

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning analyst team.

Stock Advisor Returns
S&P 500 Returns

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 10/03/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.