SALT LAKE CITY, July 24 /PRNewswire-FirstCall/ -- Overstock.com, Inc.
(Nasdaq: OSTK) announced that today, after a 14 trading day reprieve, it has
reappeared on Nasdaq's Regulation SHO threshold list. (Source:
http://www.nasdaqtrader.com/aspx/regsho.aspx).
Regulation SHO requires the stock exchanges to publish daily a list of
companies whose stock has failures-to-deliver above a certain threshold. It
also requires mandatory close-outs for open fail-to-deliver positions in
threshold securities persisting for over 13 days, with the aim that no
security would appear on the threshold for any extended period. Despite that
aim, Overstock.com has now appeared on the Regulation SHO threshold list for
839 trading days -- about 95% of the nearly 900 days the list has been in
existence.
"We're back on the list," said Overstock.com chairman and CEO Patrick
Byrne, "but I'm not surprised. Data provided by a financial news organization
suggests that of our approximate 6,000 owners, the top 50 own 106% of our
stock. And yet last Friday, it appears that 20% of our issued and outstanding
stock traded, as the price of it fell 40% when we announced earnings that
largely beat the Wall Street consensus expectations."
Last Friday, nearly 4.5 million Overstock.com shares traded -- nearly ten
times the average volume. In addition, there was an abnormally large volume of
trades in the options market on Friday -- even for an options expiration day.
Ironically, this happened while the SEC put in place an emergency
apartheid order that provides special protections against naked short selling
for a select 19 companies, those being Fannie Mae, Freddie Mac, and 17 Wall
Street firms, only seven of which have ever been on the Reg SHO list to date,
and nine of whom have been enabling naked short selling against Overstock.com
(according to a lawsuit filed by Overstock). Byrne said, "This apartheid
protection of the elite of Wall Street is Orwellian: why should a select group
of brokerage firms receive special protection from illegal trading practices,
when many of these firms have enabled others to engage in these very same
practices, targeting public companies that now receive no protection under the
SEC's emergency order?"
The American Bankers Association has asked that the apartheid system be
expanded to include more banks. However, Overstock.com, the Financial Services
Roundtable, and former SEC Chairman Harvey Pitt, have called on the SEC to
expand and extend the rule of law to the entire market.
Byrne continued: "When someone sells something that they neither own, nor
borrow, nor deliver, a reasonable person may ask, 'What is being sold?' The
answer is, 'Nothing.' The SEC has realized that liquidity born of 'nothing'
may be unhealthy for the market."
Overstock.com believes that in order for naked shorting to stop the SEC
must:
"The SEC must do more to stop chronic failures-to-deliver," said
Overstock.com senior vice president of corporate affairs and legal, Jonathan
Johnson. "If it continues to take mere half measures, abusive manipulators
will continue to have their way in the markets."
As of today, 568 companies are on the Regulation SHO threshold list: 245
for over 13 consecutive trading days, 52 for over 100 consecutive trading
days, and one, Medis Technologies Ltd., for 746 consecutive trading days.
(Source: http://buyins.net/tools/short_list.php?ssd=20080724).
About Overstock.com
Overstock.com, Inc. is an online retailer offering brand-name merchandise
at discount prices. The company offers its customers an opportunity to shop
for bargains conveniently, while offering its suppliers an alternative
inventory distribution channel. Overstock.com, headquartered in Salt Lake
City, is a publicly traded company listed on the NASDAQ Global Market System
and can be found online at http://www.overstock.com.
Overstock.com(R) is a registered trademark of Overstock.com, Inc. All
other trademarks are the property of their respective owners.
This press release contains certain forward-looking statements within the
meaning of Section 27A of the Securities Act of 1933 and Section 21E of the
Securities Exchange Act of 1934. Such forward-looking statements include, but
are not limited to, statements regarding the future effect of recommended
remedies for naked short selling and the SEC's ability to ever stop
manipulative naked short selling. Our Form 10-K for the year ended December
31, 2007, our subsequent quarterly reports on Form 10-Q, or any amendments
thereto, and our other subsequent filings with the Securities and Exchange
Commission identify important factors that could cause our actual results to
differ materially from those contained in our projections, estimates or
forward-looking statements.
SOURCE Overstock.com, Inc.
