Tackling the important problems
Recent earnings news from the likes of ExxonMobil
The cruel truth here is that our government could have put into play, at any time in the recent past, any number of policies to discourage rampant oil consumption, including gasoline taxes, credits for purchase or production of higher-mileage vehicles, or even (gasp) mandates for higher fuel efficiency standards for automobiles.
Of course, such market fiddling has been resoundingly rejected for years in the name of various forms of freedom, despite a strong case for considering stability and affordability of energy to be a major national security issue -- something we might perhaps fork over a little of our consumer freedom to achieve. But no way.
On this issue, our government has simply reflected a broader fallacy in our American self-image. It's more important to look tough and independent in that SUV than to actually be tough and independent by being freed from the financial noose of the gas pump.
But lest you lose all hope, keep in mind that the same Congress that hasn't had the guts to formulate a real energy policy other than "Party on!" does have the time to concentrate on the important stuff.
In fact, a House panel recently voted to move up the mandatory digital timetable by a year, making for a showdown with the Senate, which wants to keep the deadline for 2009. This may mean good news for retailers like Best Buy
At least we've got our priorities straight.
No one like you
So let's review the results of those deeds. So far this year, Overstock has burned through $62 million, and that's looking only at cash used by operating activities. Toss in capital expenditures and the Ski West acquisition, and you're looking at a total cash chug of $123 million. Last year, the company had guzzled only $18 million via operations and capital expenditures. That leaves Overstock with $77 million in cash and marketable securities, versus $290 million at the beginning of the year. In that same spread, inventories have more than doubled to $90 million, and shopper acquisition costs continue to climb. How much more do you need?
This kind of accelerating failure, of course, goes a long way toward explaining exactly why Byrne is really so angry at those short sellers -- naked, allegedly naked, crooked, straight, or otherwise. If things continue like this -- and I see no reason to believe they won't -- Overstock will need to issue debt and/or equity to keep running. (Remember, Overstock did it in last year's Q4, to the tune of $190 million.) The trouble is, that's not such a slam dunk when your stock is in the dumper.
So investors have a choice here: Invest in personality, or results. Most already seem to have made up their minds. I suggest to the few who haven't paid more attention to the numbers than to the lawsuits, Sith-Lord hunts, and clever Japanese apologies: All the Gomennasai in the world won't put sushi on your table.
Make his day
Last week, employees at former auto-industry heavyweight Delphi woke to a rather unpleasant surprise: Nine bucks an hour. That's what the bankrupt parts maker is bringing to the table as a wage offer. But rest easy -- that's just a starting salary. The company offered $10.50 for current workers, and skilled labor will see wages drop by only about 50%.
Let's be honest: With former sugar-daddy GM
Think about it. The Costco
If you were "Dirty Harry in the executive suite," as my colleague Bill Mann described Delphi chief Steve Miller, you might just tell potential strikers, as Miller told the Detroit Free Press, "Any plant that wants to be at the top of our plant closure list should engage in industrial action as a way of sending that message."
Those sound like fighting words to me.
For related Foolishness:
- Delphi chief Steve Miller is well known for his ability to slice and dice.
- Take a look at Overstock's last appearance in Eyes on the Wise.
- We are all French.
At the time of publication, Seth Jayson had no positions in any company mentioned here. View his stock holdings and Fool profile here. Overstock is a Motley Fool Rule Breakers selection. Fool rules are here.