OSTK stock has tanked nearly 60% in the last week as the bad news continues to pile up for Overstock.com Inc (NASDAQ:OSTK).
Bizarre Turn of Events
OSTK stock has been in turmoil since a bizarre turn of events in August saw founder and CEO Patrick Byrne step down from the company after admitting to a three-year relationship with Maria Butina, a Russian spy currently serving an 18-month sentence in federal prison. Following his resignation, Byrne released a statement that mentioned “Deep State,” “Men in Black,” and “political espionage” campaigns against Hillary Clinton and Donald Trump, which led to OSTK shares dropping over 28%.
OSTK Stock Suffers Worst Day in a Decade
Yesterday, OSTK stock suffered its worst day in over a decade following an announcement that Chief Financial Officer Greg Iverson had resigned on news that the company is set to post weaker than expected quarterly results. The company said it expects to report adjusted EBITDA of $17.5 million USD, which means that it is about breaking even. However, Overstock’s full-year guidance had relied on generating significant positive earnings by this stage. The company referenced “increased costs from tariffs on goods manufactured in China” as the main factor for weak revenues.
Overstock has announced that Robert Hughes, who had held the role of CFO previously, will take on the role on an interim basis while Jonathan Johnson, who had been acting as CEO since Byrne’s departure, would continue in that position on a permanent basis. It was not an easy start to life for the two new appointments, as the company was also forced to delay its “digital dividend” due to “feedback … from industry participants, investors and regulators.” OSTK shares had climbed 74% in the previous seven sessions as investors awaited the dividend.
The dividend was designed by Byrne, who sold his remaining 13% stake in the company he founded in a three-day fire sale last week. Byrne said in a blog post that he planned to sell the shares after hearing that the SEC planned to combat the digital dividend, which was designed to stop short-selling against OSTK stock. The planned dividend involved sticking investors with an obscure cryptocurrency that would only be accessible through a Dinosaur Financial Group brokerage account, and investors would be barred from trading them until May 1.
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