Overstock.com Must Restate Finances, Again
07.02.10
Thursday evening Overstock.com (NASDAQ: OSTK ) announced that it is restating all financial reports from 2008 to Q3 2009 as a result of material violations of Generally Accepted Accounting Principles (GAAP) and other SEC disclosure rules. This announcement vindicates my reporting of a financial statement manipulation scheme by Overstock.com and its unprincipled management team, led by CEO Patrick M. Byrne.
How it all started
In October 2008, Overstock.com restated its financial reports from Q1 2003 to Q2 2008 due to customer refund and credit errors. However, the October 2008 restatement did not include corrections arising from underbilled offsetting costs and reimbursements that were already earned from its fulfillment partners during those same corresponding periods, less a reasonable estimate of uncollectable amounts. In other words, Overstock.com should have gone back and corrected or restated its financial reports to reflect income already earned from offsetting costs and reimbursements due from its fulfillment partners, less a reasonable estimate for uncollectable amounts. (See SFAS No. 154 and SFAS No 5 paragraph 1, 2, 8 and 23 ). It didn’t.
Source: Seeking Alpha (blog)
Why Overstock.com and David Chidester Parted Ways
03.02.10
To the Securities and Exchange Commission:
I believe that it is no coincidence that David Chidester left Overstock.com (NASDAQ: OSTK ) while KPMG continues to audit its financial reports amid your ongoing investigation of the company and a day after Roddy Boyd's damaging article was published in The Big Money. Recently, both CEO Patrick M. Byrne and former CFO David K. Chidester refused to comment to the Salt Lake Tribune. Also, company President Jonathan E. Johnson gave evasive and misleading answers to them about Chidester's departure from the company.
As an eleven year veteran of the company, David Chidester knows where the "dead bodies" are to be found in Overstock.com's continuous failure to issue financial reports in compliance with Generally Accepted Accounting Principles (GAAP) and other SEC disclosure rules. Overstock.com claims that David Chidester and the company parted ways by "mutual agreement." I believe that their so-called "mutual agreement" is based on Patrick Byrne not wanting David Chidester to stay around and David Chidester not wanting to be around to answer questions as KPMG continues its audit of the company's financial reports.
Source: Seeking Alpha (blog)