Overstock.Com Earnings Preview (OSTK)

Overstock.com (NASDAQ:OSTK) will report earnings before the market open on Tuesday, and fortunately its ‘bound to be entertaining’ conference call is late morning at 11:00 AM EST.  This one is thinly followed and has a wide range of estimates, but it looks like First Call has guestimated earnings at a loss of -$0.62 EPS on revenues of $145 million.  The company has missed estimates for each of the last 3 quarters, and is not in the spotlight as much since its Chairman & CEO Patrick Byrne has stayed more out of the spotlight lately and stopped referring to conspiracies to topple his company by Sith Lords.

On a static basis, it appears that options traders are braced for a move of $1.25 to $1.30 in either direction.  Its most recent chart is actually back under levels that would mark an up-trend in the stock, although it goes without saying that has a mind of its own and can see wild moves on news.  The stock also carries over 5.4 million shares in its June short interest.  That represents more than 40% of the float, and Mr. Byrne’s attack on short sellers is quite a unique case.

The company is expected to post losses for 2007 and 2008.  That means it has to operate cautiously so it doesn’rt get its own piece of the O.  We aren’t going to spend too much guess time from here, but it may be worth pointing out that there are still many skeptics that believe its $400+ million market cap is too high and have their bets placed accordingly.  That’s for you to decide. 

Overstock’s 52-week trading range is $13.40 to $21.72.

Jon C. Ogg
July 30, 2007

Jon Ogg can be reached at [email protected]; he does not own securities in the companies he covers.