The publicly traded shares of Overstock.com (NASDAQ: OSTK) swung wildly following the company’s quarterly and full-year earnings report on Thursday.
They initially plunged by more than 20% to near $18 apiece, followed by a surge of over 25% to above $24. They finished the day up by 1% to $23.34 but then fell by 4% on Friday to $22.38. The company’s market cap is now $537 million.
Investors have been divided on Overstock’s future outlook. The company operates as a niche e-commerce market and its CEO Patrick Byrne is an outspoken critic of Wall Street. Notably, he has passionately embraced cryptocurrency, his marketplace being the first of its size to accept bitcoin.
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While bitcoin-based sales were initially a big hit since their launch one year ago, they have not picked up at the pace anticipated by Byrne and ended 2014 way off projections.
The company reportedly preserves a small portion (10%) of its bitcoin-based sales as bitcoins. While Bitcoin’s price declined by as much as 70% throughout 2014, the weak bitcoin sales slightly helped reduce the company’s exposure.
It was previously reported that bitcoin-based sales were approximately 0.25% of total revenues. A more recent estimate pegged the figure at 0.2%, yielding roughly $3 million on $1.5 billion in total revenue. Even in a worst-case scenario where all bitcoin-based sales were realized during bitcoin’s price peak, losses would be no more than $210,000.
The company’s revenues and gross profits did increase over their previous periods–likely a cause for the reversal in sentiment during the second half of Thursday’s session. What initially rattled investors, however, were the net profit figures. These were $1.3 million and $8.8 million for the quarter and year, decreases of 97% and 90% over their previous periods and well below analyst estimates. One-time items, such as the $5.5 million hit from a patent infringement case, obscured what was otherwise a pretty decent year.