Overstock Over The Top (OSTK)

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Overstock.com (NASDAQ:OSTK) is seeing a stock surge in its pre-market trading.  The controversial online discount retailer posted a narrower than expected loss of $4.7 million on a 3% rise in revenues to $161.9 million.  The loss per share was -$0.20 EPS.  First Call had consensus estimates of -$0.39 EPS on revenues of $155.1 million.

On an operating cash flow basis, Overstock posted a $5.9 million positive cash flow, and that is critical since that was a Q3 number rather than just a Q4 holiday quarter.  On an EBITDA basis, the company posted a positive $4.1 million.

The big upside on revenues compared to estimates combined with lower sales marketing costs (down 49%) appear to have paid off.  The stock is trading up over 14% to $34.00, well above the $13.40 lows of the last year and just under the $35.96 52-week high. At the end of September, the NASDAQ short interest in Overstock was listed as 4.611 million shares, about 15.5 days to cover.

Jon C. Ogg
October 19, 2007