If you were waiting to celebrate Overstock.com's
For quite some time, Overstock CEO Patrick Byrne has argued that his company's valuation is out of whack with that of leading online retailer Amazon.com
Then again, Amazon is the market leader, and it is also profitable. Buy.com had to postpone its IPO earlier this month because it didn't find enough buyers willing to snap up the freshly minted shares that valued the company at 0.48 times sales. Thankfully, Overstock is no Buy.com. Overstock is growing much faster; Buy.com grew its top line a mere 15% through the first nine months of 2005.
One can argue that Overstock may now be staring at a profit if it weren't for the lavish "It's all about the O" marketing campaign, but Byrne defends it as a move to solidify the brand.
One may also wonder whether Overstock would be better off with a little more focus. Its consumer-to-consumer auction business will never be a threat to eBay
Even Tuesday morning's press release throws a new log onto the conspiracy-theory bonfire. Byrne argues that during a Bloomberg Television appearance on Friday, the network cut to an unannounced commercial just as he was starting to discuss his lawsuit against Rocker Partners and Gradient Analytics.
As Bill Mann and John Reeves pointed out back in October, the real issues are no laughing matter. The more one digs into the matter, the more one begins to sympathize with Byrne's case. The problem is that most investors can't afford the learning curve. They can't understand the paradox of seeing a CEO justify a costly ad campaign for the sake of "solidifying the brand" yet at the same time alienating potential investors through flamboyant accusations of those who may or may not be manipulating Overstock's shares.
So now, supposedly, Bloomberg has a hand in suppressing the information behind the case? Does this information really belong in a press release about a company's performance shortcomings? Do you realize how bad this looks? Even if you're right, let these theories and colorful accusations come from anyone else in the company than its CEO, in anything other than an actual profit warning press release. Focus, Byrne. Focus.
Yes, the Fool has been known to like an online retailer or two. Amazon and eBay are active recommendations in the Stock Advisor newsletter service, and Overstock.com was singled out last year to Rule Breakers subscribers.
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Longtime Fool contributor Rick Munarriz has a few conspiracy theories about conspiracy theorists. He does not own shares in any of the companies mentioned in this story. The Fool has a disclosure policy. He is also part of theRule Breakersnewsletter research team, seeking out tomorrow's ultimate growth stocks a day early.