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And while I’m on vacation, Tropical Storm Gomen Nasai hits. Overstock announced its Q3 results on Friday, October 28th, and both the press release and the actual call were “colorful.” It wasn’t in the realm of unexpected, the cash burn continues, IT problems continue and next quarter will be better. Also Jack Byrne is replacing his son, Patrick Byrne, as chairman. Patrick telefonically bowed in self-disapproval by writing “Gomen Nasai” and “My bad” in the press release. I’m not kidding, read the Overstock.com Press Release for yourself. Across the web there was the usual spectrum of commentary and here is a round-up, pre-digested for your reading ease.

Herb Greenberg with Jim Cramer as reported by Madd Money. Herb focuses on Overstock scuttlebutt, which is his core skill:

Cramer asked Greenberg about Overstock.com (OSTK), which announced third-quarter earnings Friday.Greenberg said Overstock’s earnings were “crummy.” If Patrick Byrne would have spent more time running his business rather than running his mouth, maybe his company would be doing better.”If results were so bad, why didn’t the stock go down Friday? asked Cramer. Greenberg said he didn’t know. Cramer commented that Overstock.com’s new chairman, Jack Byrne, father of Overstock.com CEO Patrick Byrne, is well-regarded in the insurance industry. Greenberg said if Jack Byrne wasn’t involved with Overstock.com, he believes the stock “would be a fraction of where it is today.” “I like that,” said Cramer, while pushing the bear button.

Preston Willy focuses on the actual business and the lessons that can be gleened from Overstock’s failure:

Cover your expenses with decent margins

The days of grabbing market share at the expense of profits on the internet are over. OK, some companies still employ this model and (occassionally) it works but it is a very risky model and, quite frankly, unnecessary for smart entrepreneurs and marketers. I am never impressed that a company can generate $200M in revenues with $50M in losses - with an endless supply of capital you would have to be very un-business savvy not to be able to do this.

Catablast! points out the unusual approach to hiring at Overstock.com:

“When we meet someone with real brains and energy and the right character, we hire them even without giving them a job.” Byrne describes one executive who was hired after taking a year off to ski. “She was basically a ski bum,” he said. She was also a Phi Beta Kappa from Dartmouth and had worked at Goldman Sachs. I hired her with no job and said, ‘Drift around for a couple of months and figure out what you’re going to do.’” The woman went on to become VP of Marketing.”

Jeff Matthews Can’t Help But Smarm Things Up.

And, Henry Blodgett (yes, that Blodgett, he’s back and he’s better than ever!!!), was relatively even handed, emphasizing that there is still much we don’t know and mentioning the possibility of OSTK being taken private by the Byrne’s:

So it will be interesting to see how the lawsuit–and company–play out from here. Earlier this week, Dr. Byrne’s exceptionally successful father, Jack Byrne, replaced him as Chairman. One wonders now whether one of the elder Byrne’s first moves will be to force his talented-but-distracted son to drop the anti-short jihad and focus on his job (running the company)–or at least acknowledge that maybe, just maybe, the stock is dropping for reasons other than lies. And one also wonders whether, given their combined control of the company (70%-plus), the Byrnes won’t just take Overstock private and end the fight with shorts once and for all.

Resources specific to this call:
Overstock Q3 Press Release
Overstock Q3 Earnings Call Transcript
Overstock Q3 Call Slides
Overstock’s SEC Page