The crypto-oriented e-tailer reported a net loss of $2.1 million, or 8 cents per share, down from a net profit of $1.6 million one year ago.
Shares of Overstock.com (NASDAQ:OSTK) fell hard in after-hours trading on Monday after reporting revenues that missed analyst estimates.
The e-tailer reported Q3 2015 revenues of $391.2 million, an 11% increase year-over-year, but 2.6% below analyst estimates of $401.6 million.
It reported a net loss of $2.1 million, or 8 cents per share, down from a net profit of $1.6 million one year ago.
Shares fell by 12.35% in after-hours trading to $14.90, just above their 52-week low of $14.85, and bringing year-to-date losses to 38.6%.
[gap]
Overstock was one of the highest profile companies to accept Bitcoin for payment when it did so in early 2014. Months later, it embarked on a project, Medici, to use the Blockchain to streamline the settlement of securities trades.
The company is now identified more with its crypto ambitions than its e-commerce business, and indeed, these ambitions were a major highlight in the earnings report.
CEO Patrick Byrne lauded the blockchain’s potential and noted that by mashing together “cryptotechnologists” with various friends within Wall Street ("yes, I still have some") and IP lawyers, the company has filed for five patents. He expects that they “may have significant value some day.”
He further mentioned the company’s acquisition of SpeedRoute, a trade routing technology firm that would help connect Medici’s crypto platform to the broader markets. He framed the acquisition as accretive to earnings.
The costs of Medici in the quarter ($3.2 million) were enough to swing the company to a loss- its first in 15 quarters. Direct costs of roughly $8 million are expected for the year, but the real costs are higher when accounting for shared overhead and dual-tasked employees. Overstock's costs in general were controlled, he said, and the company underspent its internal budget.
Byrne believes, “for obvious reasons”, that Medici can in fact be co-managed with the seemingly unrelated online retail business.
More Highlights
Though not discussed in the report, the company’s financials may have also been impacted by other holdings, though perhaps only marginally. Unlike most businesses accepting bitcoins, Overstock elects to hold onto a significant portion without having them converted to fiat currency. Bitcoin’s value has declined significantly since the peak in bitcoin-based sales during the first half of last year, but fortunately for Overstock, the e-tailer has fallen far short of its estimates for such sales.
Also, the company recently revealed that it has been accumulating precious metals since the last financial crisis in order to weather against the next one. Gold has appreciated since March 2009, but has lost roughly one-third of its value during the past three years.
Byrne said that Overstock’s main operation, the online retail business, underperformed because of changes in online search algorithms such as Google, inadequate execution in the transition from a discount to rewards program and dynamics in the economy (despite “Janet Yellen's Magic Money Machine”).
Byrne also provided an update on his long-running battle with Wall Street, which includes legal action involving prime brokers in the California Supreme Court. In the past, Byrne has alleged that short sellers were unfairly driving down the value of his company’s stock. He indicated that the earnings release was delayed in the expectation of a major announcement on this front, and regulatory requirements prevented further delay.
Byrne has been a vocal critic of US monetary policy and Wall Street, taking strong issue with practices such as naked short selling- issues he hopes to address with Medici.
He ended the report by praising the company’s development of human capital and noted that many of its “hungry entrepreneurs” are female.
Shares of Overstock.com (NASDAQ:OSTK) fell hard in after-hours trading on Monday after reporting revenues that missed analyst estimates.
The e-tailer reported Q3 2015 revenues of $391.2 million, an 11% increase year-over-year, but 2.6% below analyst estimates of $401.6 million.
It reported a net loss of $2.1 million, or 8 cents per share, down from a net profit of $1.6 million one year ago.
Shares fell by 12.35% in after-hours trading to $14.90, just above their 52-week low of $14.85, and bringing year-to-date losses to 38.6%.
[gap]
Overstock was one of the highest profile companies to accept Bitcoin for payment when it did so in early 2014. Months later, it embarked on a project, Medici, to use the Blockchain to streamline the settlement of securities trades.
The company is now identified more with its crypto ambitions than its e-commerce business, and indeed, these ambitions were a major highlight in the earnings report.
CEO Patrick Byrne lauded the blockchain’s potential and noted that by mashing together “cryptotechnologists” with various friends within Wall Street ("yes, I still have some") and IP lawyers, the company has filed for five patents. He expects that they “may have significant value some day.”
He further mentioned the company’s acquisition of SpeedRoute, a trade routing technology firm that would help connect Medici’s crypto platform to the broader markets. He framed the acquisition as accretive to earnings.
The costs of Medici in the quarter ($3.2 million) were enough to swing the company to a loss- its first in 15 quarters. Direct costs of roughly $8 million are expected for the year, but the real costs are higher when accounting for shared overhead and dual-tasked employees. Overstock's costs in general were controlled, he said, and the company underspent its internal budget.
Byrne believes, “for obvious reasons”, that Medici can in fact be co-managed with the seemingly unrelated online retail business.
More Highlights
Though not discussed in the report, the company’s financials may have also been impacted by other holdings, though perhaps only marginally. Unlike most businesses accepting bitcoins, Overstock elects to hold onto a significant portion without having them converted to fiat currency. Bitcoin’s value has declined significantly since the peak in bitcoin-based sales during the first half of last year, but fortunately for Overstock, the e-tailer has fallen far short of its estimates for such sales.
Also, the company recently revealed that it has been accumulating precious metals since the last financial crisis in order to weather against the next one. Gold has appreciated since March 2009, but has lost roughly one-third of its value during the past three years.
Byrne said that Overstock’s main operation, the online retail business, underperformed because of changes in online search algorithms such as Google, inadequate execution in the transition from a discount to rewards program and dynamics in the economy (despite “Janet Yellen's Magic Money Machine”).
Byrne also provided an update on his long-running battle with Wall Street, which includes legal action involving prime brokers in the California Supreme Court. In the past, Byrne has alleged that short sellers were unfairly driving down the value of his company’s stock. He indicated that the earnings release was delayed in the expectation of a major announcement on this front, and regulatory requirements prevented further delay.
Byrne has been a vocal critic of US monetary policy and Wall Street, taking strong issue with practices such as naked short selling- issues he hopes to address with Medici.
He ended the report by praising the company’s development of human capital and noted that many of its “hungry entrepreneurs” are female.
Federal Prosecutors Charge Samurai Wallet Founders with Money Laundering
Network, Learn, Grow | FMAS:24
Network, Learn, Grow | FMAS:24
Get ready to mark your calendars for FMAS:24, returning this May! Take a quick glimpse of what awaits at the Sandton Convention Centre in Sandton, South Africa from May 20-22, 2024.
Don't miss out on this 5-second invite packed with energy and urgency!
Secure your free ticket now 🔗 https://events.financemagnates.com/yQx0l?utm_source=youtube&utm_campaign=fmas-is-back&utm_medium=video&RefId=FMAS24+Video+Ad+%5B1%5D
#fmas24 #fmas #fmevents #financeinafrica #traders #investors #affiliates #forexTraders #investmentOpportunities #B2BNetworking #finTech #Innovations #TradingCommunity #BusinessOpportunities #AfricanBusiness #Johannesburg #southafrica
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Get ready to mark your calendars for FMAS:24, returning this May! Take a quick glimpse of what awaits at the Sandton Convention Centre in Sandton, South Africa from May 20-22, 2024.
Don't miss out on this 5-second invite packed with energy and urgency!
Secure your free ticket now 🔗 https://events.financemagnates.com/yQx0l?utm_source=youtube&utm_campaign=fmas-is-back&utm_medium=video&RefId=FMAS24+Video+Ad+%5B1%5D
#fmas24 #fmas #fmevents #financeinafrica #traders #investors #affiliates #forexTraders #investmentOpportunities #B2BNetworking #finTech #Innovations #TradingCommunity #BusinessOpportunities #AfricanBusiness #Johannesburg #southafrica
📣 Stay updated with the latest in finance and trading!
Follow FMevents across our social media platforms for news, insights, and event updates. Connect with us today:
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Don't miss out on our latest videos, interviews, and event coverage. Subscribe to our YouTube channel for more!
Here's a sneak peek into the FMAS:24 vibrant atmosphere! Join us at Africa’s premium financial event for a transformative experience that combines the best of finance and technology.
From May 20-22, 2024, the Sandton Convention Centre in Sandton, South Africa, will be the hub for over 3,500 attendees to engage in unparalleled networking opportunities, learn from over 150 industry-leading speakers, and explore innovations from 120+ exhibitors.
Secure your free ticket now 🔗 https://events.financemagnates.com/yQx0l?utm_source=youtube&utm_campaign=fmas-is-back&utm_medium=video&RefId=FMAS24+Video+Ad+%5B1%5D
#fmas24 #fmas #fmevents #financeinafrica #traders #investors #affiliates #forexTraders #investmentOpportunities #B2BNetworking #finTech #Innovations #TradingCommunity #BusinessOpportunities #AfricanBusiness #Johannesburg #southafrica
📣 Stay updated with the latest in finance and trading!
Follow FMevents across our social media platforms for news, insights, and event updates. Connect with us today:
🔗 LinkedIn: https://www.linkedin.com/showcase/financemagnates-events/
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Don't miss out on our latest videos, interviews, and event coverage. Subscribe to our YouTube channel for more!
Here's a sneak peek into the FMAS:24 vibrant atmosphere! Join us at Africa’s premium financial event for a transformative experience that combines the best of finance and technology.
From May 20-22, 2024, the Sandton Convention Centre in Sandton, South Africa, will be the hub for over 3,500 attendees to engage in unparalleled networking opportunities, learn from over 150 industry-leading speakers, and explore innovations from 120+ exhibitors.
Secure your free ticket now 🔗 https://events.financemagnates.com/yQx0l?utm_source=youtube&utm_campaign=fmas-is-back&utm_medium=video&RefId=FMAS24+Video+Ad+%5B1%5D
#fmas24 #fmas #fmevents #financeinafrica #traders #investors #affiliates #forexTraders #investmentOpportunities #B2BNetworking #finTech #Innovations #TradingCommunity #BusinessOpportunities #AfricanBusiness #Johannesburg #southafrica
📣 Stay updated with the latest in finance and trading!
Follow FMevents across our social media platforms for news, insights, and event updates. Connect with us today:
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Don't miss out on our latest videos, interviews, and event coverage. Subscribe to our YouTube channel for more!
Join 3500+ Attendees at FMAS:24 | Africa's Premium Financial Event
Join 3500+ Attendees at FMAS:24 | Africa's Premium Financial Event
Looking to expand your network in #Africa? Join 3500+ attendees at FMAS:24, where online trading, fintech, payments, and crypto meet! Connect with industry leaders and innovators for an unmatched networking experience.
20-22 MAY 2024
Sandton Convention Center, Sandton, South Africa
Register now to secure your spot: https://bit.ly/3JbUpCK
#fmas #fmas24 #fmevents #networking #finance #africa
📣 Stay updated with the latest in finance and trading!
Follow Finance Magnates for news, insights, and event updates across our social media platforms. Connect with us today:
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Looking to expand your network in #Africa? Join 3500+ attendees at FMAS:24, where online trading, fintech, payments, and crypto meet! Connect with industry leaders and innovators for an unmatched networking experience.
20-22 MAY 2024
Sandton Convention Center, Sandton, South Africa
Register now to secure your spot: https://bit.ly/3JbUpCK
#fmas #fmas24 #fmevents #networking #finance #africa
📣 Stay updated with the latest in finance and trading!
Follow Finance Magnates for news, insights, and event updates across our social media platforms. Connect with us today:
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Join 3500+ Attendees at FMAS:24 - Africa's Premium Financial Event
Join 3500+ Attendees at FMAS:24 - Africa's Premium Financial Event
Looking to expand your network in #Africa?
Join 3500+ attendees at FMAS:24, where online trading, fintech, payments, and crypto meet! Connect with industry leaders and innovators for an unmatched networking experience.
20-22 MAY 2024
Sandton Convention Center, Sandton, South Africa
Register now to secure your spot: https://bit.ly/3JbUpCK
#fmas #fmas24 #fmevents #networking #finance #africa
Looking to expand your network in #Africa?
Join 3500+ attendees at FMAS:24, where online trading, fintech, payments, and crypto meet! Connect with industry leaders and innovators for an unmatched networking experience.
20-22 MAY 2024
Sandton Convention Center, Sandton, South Africa
Register now to secure your spot: https://bit.ly/3JbUpCK
#fmas #fmas24 #fmevents #networking #finance #africa
Where the Prop Trading Industry Goes from Here | Finance Magnates Podcast
Where the Prop Trading Industry Goes from Here | Finance Magnates Podcast
Explore the tumultuous world of prop trading in this Finance Magnates podcast episode, featuring insights from Head of Axi Select, Greg Rubin.
We're discussing the challenges and shifts caused by MetaQuotes' pivotal decisions affecting MT4 and MT5 users, and how Axi Select offers a unique, realistic path to professional trading, steering clear of traditional prop firm pitfalls.
Tune in for expert analysis on the future of trading and innovative funding models.
The Axi Select programme is only available to clients of AxiTrader Limited. CFDs carry a high risk of investment loss. In our dealings with you, we will act as a principal counterparty to all of your positions. This content is not available for AU, NZ, EU and UK residents. For more information, refer to our Terms of Service. Standard trading fees apply.
This content is provided solely for general informational purposes and should not be construed as financial product advice or an investment recommendation. It has been prepared without considering your personal circumstances.
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Explore the tumultuous world of prop trading in this Finance Magnates podcast episode, featuring insights from Head of Axi Select, Greg Rubin.
We're discussing the challenges and shifts caused by MetaQuotes' pivotal decisions affecting MT4 and MT5 users, and how Axi Select offers a unique, realistic path to professional trading, steering clear of traditional prop firm pitfalls.
Tune in for expert analysis on the future of trading and innovative funding models.
The Axi Select programme is only available to clients of AxiTrader Limited. CFDs carry a high risk of investment loss. In our dealings with you, we will act as a principal counterparty to all of your positions. This content is not available for AU, NZ, EU and UK residents. For more information, refer to our Terms of Service. Standard trading fees apply.
This content is provided solely for general informational purposes and should not be construed as financial product advice or an investment recommendation. It has been prepared without considering your personal circumstances.
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