Overstock.com shares tumble 13% after earnings

  • Overstock reported a 13 percent drop in fourth quarter revenue to $456.3 million, and a 3 percent decrease in sales for full-year 2017 to $1.745 billion.
  • The stock fell 13 percent in after-hours trading to below $42 a share.
  • The company gave no significant update on a potential sale of its retail arm to focus on its cryptocurrency-related business.

Shares of Overstock.com dropped in extended trading Thursday after the e-commerce company reported a sales decline and no significant progress on a potential sale of its retail arm to focus on its cryptocurrency-related business.

The stock fell 13 percent in after-hours trading to below $42 a share. Shares closed 0.6 percent lower Thursday at $48.20, down 21 percent for the week so far.

Overstock reported a 13 percent drop in fourth quarter revenue to $456.3 million, and a 3 percent decrease in sales for full-year 2017 to $1.745 billion. Management noted a decline in online search, competition from Wayfair, and that better results overall would not likely come until the second half of the year.

“Quarter one is terrible,” CEO Patrick Byrne said on an earnings call. “I think you’ll see us making nice progress in quarter two.”

Byrne indicated on the company’s previous earnings call in the fall that he could sell the retail business, and told CNBC in mid-December that he intended to have a deal within the next three months. D. A. Davidson analyst Tom Forte had raised his price target on the stock to $85 from $57 in November on expectations of a sale of the e-commerce business.

Work “is ongoing” with Guggenheim to consider strategic alternatives, including a sale of e-commerce assets, Overstock said in a release Thursday.

The company also disclosed details on the U.S. Securities and Exchange Commission’s investigation into Overstock’s subsidiary tZero for its $250 million security token offering. Overstock has a license for an alternative trading system and tZero is developing a trading platform for digital token securities.

“We are in the process of responding to these document requests and intend to cooperate fully with the SEC in connection with its investigation, which will require the time and attention of tZERO and our personnel, and may have an adverse effect on our ability to focus attention on our businesses and our ability to raise capital,” the company said in a 10-K filing with the commission.

Overstock had disclosed news of the SEC’s information request in a separate filing earlier in the month. The commission has subpoenaed many cryptocurrency companies and funds recently as it looks to crackdown on fraudulent activity in the industry.

On the earnings call Thursday, Byrne also laid out the company’s other investments related to cryptocurrencies and the blockchain technology behind them, including holdings of a token called Ravencoin. The coin traded at 2.4 cents on CoinMarketCap Thursday.

WATCH: Overstock.com drops after revealing SEC investigation into crypto token sale


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