Category | The Archive

Keeping the Books from Being Burned

Those who would hijack the legal institutions shielding society from Wall Street perfidy must also hijack the political institutions providing them oversight, and hijack the discourse about those legal and political institutions, and hijack the social institutions mediating that discourse. The capture must run deep to be stable. So deep, in fact, that records of the past become untrustworthy.

The records of the past have in fact become untrustworthy. Stories have disappeared from databases and video clips from websites. It has happened as recently as this week: a clip to which “The Story of Deep Capture” linked as evidence stopped working. And just today has begun a new round of clogging the discourse regarding our claims (the simple difference between legal short-selling and illegal stock counterfeiting being too fine a distinction for almost any journalist to recognize when characterizing my position).

This chapter is meant to remedy that situation. It will serve as an archive of material to which the rest of DeepCapture may link, with little editorial comment. Those who wish to take issue with DeepCapture’s archiving and deconstruction of their copyrighted articles and videos (and, perhaps, emails) know where to find us.

Posted in The ArchiveComments (0)

CNBC and I Get Acquainted

On November 28, 2003 I appeared on CNBC for the first time, and the interview they conducted was perfectly fair. They asked me pointed, intelligent questions, and let me answer. We discussed sourcing and supply lines, as well as an issue related to Tiffany. They noted Overstock’s losses, but also noted that we had had a GAAP-profitable quarter (and questioned whether Amazon had or had not by that point). I was optimistic about the future, hoping that the trajectory that Overstock was then on (crazy-high growth with roughly break-even results, and a minimum use of cash) could continue indefinitely.

It did, in fact, continue for two years, through 2005. But around the end of 2005 our wings shredded and we had a tough two years getting things back under control. But at the time of this interview, things looked like they were on track.

Posted in The ArchiveComments (0)

Larry, Jim and I Get to Know Each Other – 2 Dec 2003

On December 2, 2003, I appeared on Kudlow & Cramer for the first time. Larry Kudlow and Jim Cramer both seemed like fine, reasonable guys, and they asked intelligent questions. This interview was a condensed version of what it is like to walk into a hedge fund for the first time and explain one’s business.

Posted in The ArchiveComments (0)

The Mystery of "Gross Profit": Kudlow, Cramer & Me – 28 Jan 2004

After releasing Overstock’s Q4, 2003 results, I drove to a studio in Salt Lake City and appeared on Kudlow & Cramer for the second time (and third time on CNBC).

Posted in The ArchiveComments (1)

The Mystery of “Gross Profit”: Kudlow, Cramer & Me – 28 Jan 2004

After releasing Overstock’s Q4, 2003 results, I drove to a studio in Salt Lake City and appeared on Kudlow & Cramer for the second time (and third time on CNBC).

Posted in The ArchiveComments (0)

The Deepening Mystery of "Gross Profit": Kudlow & Cramer – 23 April 2004

Interview: Patrick Byrne, chairman and CEO of Overstock.com, discusses the company’s revenues and earnings
836 words
23 April 2004
CNBC: Kudlow & Cramer English (c) Copyright 2004, CNBC, Inc. All Rights Reserved.

LARRY KUDLOW, co-host: Overstock.com reduced losses with 181 percent increase in sales. So what’s next? We’ve got Overstock CEO Patrick Byrne.

Patrick, welcome back to K&C. You had pretty good numbers. Your stock is on a nice little run here. So I congratulate you for that. But once again, once again, you are confusing the heck out of me and everybody else with your arguments about gross vs. GAAP. I’m not really sure why you continue to do this and what it is you’re trying to hide.

Mr. PATRICK BYRNE (Overstock.com Chairman & CEO): Well, thank you for having me back, Mr. Cramer.

KUDLOW: No, I’m Kudlow, actually.

Mr. BYRNE: Oh, I’m sorry.

MICHELLE CARUSO-CABRERA, co-host: I’m Cramer.

KUDLOW: And this is Michelle.

Mr. BYRNE: You know, I can’t see either of you, so I just…

KUDLOW: OK, fair enough.

Mr. BYRNE: What…

KUDLOW: But what about–you are the only CEO who publishes this confusing issue about gross vs. GAAP revenues and earnings. Why do you do it, sir?

Mr. BYRNE: No good deed goes unpunished. I’ve tried to explain the economics of our business. I wrote a three-page letter this time. Last quarter, I wrote a 12-page letter. Maybe it is confusing. I thought I’m trying to do a good thing. And really, you know, the letters that the shareholders see are pretty much the letters that the board see. It’s so they can really understand the business. But I can understand in today’s age why people take that for there must be smoke and mirrors going on. But so if you just want to look at GAAP numbers, we’ll just look at GAAP numbers.

CARUSO-CABRERA: And let’s talk about those GAAP numbers. Are you ever going to make any money here?

Mr. BYRNE: I think so, yes.

CARUSO-CABRERA: You’re not profitable yet. When do you expect to be profitable?

Mr. BYRNE: Well, we’ve been there for–been there, slipped back under. We’re minus 2.4 percent at this point. For every dollar we sell, we lose minus 2.4 cents. Put it this way. I can think of one other company, Amazon, that grew to half a billion dollars in sales in five years. This is our fifth year. We launched our site October ’99, and I think we’ll do half a billion dollars this year. I think they’re the only other company that got there. I think we’ll–you know, they got there–the year they got there, they lost a billion and a half. We’ll get there this year. Yeah, we’ll make a million, lose a million. We’ll be within a half a percent of break-even.

KUDLOW: Well, yeah. You know, your business plan, you’re kind of the low-end eBay, if you will, or Amazon. But you got every right to do it, and it looks like you’re having some success. But what is it that you’re hiding on this? In other words, normal GAAP earnings takes revenues less expenses, brings down certain one-time charges, and that gets us to the profitable bottom line. Are you trying to say to us you’re not making as much in sales revenue or that you will have a better future? I mean, it’s utterly confusing to me.

Mr. BYRNE: Well, first of all, I’m all about GAAP. I have been so critical of the companies that do–I don’t believe in one-time charges; I don’t believe in EBITDA. If somebody talks EBITDA, put your hand on your wallet; they’re a crook.

KUDLOW: So if you say GAAP profit–GAAP gross profit is up 83 percent, isn’t that misleading, this idea of GAAP gross profit? As Michelle said, you’re not scoring profits yet. You may next month, but you’re not yet.

Mr. BYRNE: Larry, that’s…

KUDLOW: Quick answer.

Mr. BYRNE: …that’s…

KUDLOW: Quick answer.

Mr. BYRNE: Quick answer is that’s a silly question. GAAP has a concept called revenue, a concept called gross profit, a concept called net profit. Those are GAAP–a basic accounting course teaches that.

KUDLOW: But every company of the 5,000 reporters have net, not gross. Anyway…

CARUSO-CABRERA: You know what? We’ve got to go.

Mr. BYRNE: Well, we give them that, too.

KUDLOW: …I don’t understand it. I don’t understand it. Anyway, thank you for coming back.

CARUSO-CABRERA: Thank you.

Mr. BYRNE: OK.

CARUSO-CABRERA: Despite all that.

Mr. BYRNE: Thanks.

CARUSO-CABRERA: All right. Thank you very much, sir. Coming up next, the K&C and my view on today’s financial headlines. And later, we talk trucking e-commerce and outsourcing.

See it here.

Posted in The ArchiveComments (0)

The Deepening Mystery of “Gross Profit”: Kudlow & Cramer – 23 April 2004

Interview: Patrick Byrne, chairman and CEO of Overstock.com, discusses the company’s revenues and earnings
836 words
23 April 2004
CNBC: Kudlow & Cramer English (c) Copyright 2004, CNBC, Inc. All Rights Reserved.

LARRY KUDLOW, co-host: Overstock.com reduced losses with 181 percent increase in sales. So what’s next? We’ve got Overstock CEO Patrick Byrne.

Patrick, welcome back to K&C. You had pretty good numbers. Your stock is on a nice little run here. So I congratulate you for that. But once again, once again, you are confusing the heck out of me and everybody else with your arguments about gross vs. GAAP. I’m not really sure why you continue to do this and what it is you’re trying to hide.

Mr. PATRICK BYRNE (Overstock.com Chairman & CEO): Well, thank you for having me back, Mr. Cramer.

KUDLOW: No, I’m Kudlow, actually.

Mr. BYRNE: Oh, I’m sorry.

MICHELLE CARUSO-CABRERA, co-host: I’m Cramer.

KUDLOW: And this is Michelle.

Mr. BYRNE: You know, I can’t see either of you, so I just…

KUDLOW: OK, fair enough.

Mr. BYRNE: What…

KUDLOW: But what about–you are the only CEO who publishes this confusing issue about gross vs. GAAP revenues and earnings. Why do you do it, sir?

Mr. BYRNE: No good deed goes unpunished. I’ve tried to explain the economics of our business. I wrote a three-page letter this time. Last quarter, I wrote a 12-page letter. Maybe it is confusing. I thought I’m trying to do a good thing. And really, you know, the letters that the shareholders see are pretty much the letters that the board see. It’s so they can really understand the business. But I can understand in today’s age why people take that for there must be smoke and mirrors going on. But so if you just want to look at GAAP numbers, we’ll just look at GAAP numbers.

CARUSO-CABRERA: And let’s talk about those GAAP numbers. Are you ever going to make any money here?

Mr. BYRNE: I think so, yes.

CARUSO-CABRERA: You’re not profitable yet. When do you expect to be profitable?

Mr. BYRNE: Well, we’ve been there for–been there, slipped back under. We’re minus 2.4 percent at this point. For every dollar we sell, we lose minus 2.4 cents. Put it this way. I can think of one other company, Amazon, that grew to half a billion dollars in sales in five years. This is our fifth year. We launched our site October ’99, and I think we’ll do half a billion dollars this year. I think they’re the only other company that got there. I think we’ll–you know, they got there–the year they got there, they lost a billion and a half. We’ll get there this year. Yeah, we’ll make a million, lose a million. We’ll be within a half a percent of break-even.

KUDLOW: Well, yeah. You know, your business plan, you’re kind of the low-end eBay, if you will, or Amazon. But you got every right to do it, and it looks like you’re having some success. But what is it that you’re hiding on this? In other words, normal GAAP earnings takes revenues less expenses, brings down certain one-time charges, and that gets us to the profitable bottom line. Are you trying to say to us you’re not making as much in sales revenue or that you will have a better future? I mean, it’s utterly confusing to me.

Mr. BYRNE: Well, first of all, I’m all about GAAP. I have been so critical of the companies that do–I don’t believe in one-time charges; I don’t believe in EBITDA. If somebody talks EBITDA, put your hand on your wallet; they’re a crook.

KUDLOW: So if you say GAAP profit–GAAP gross profit is up 83 percent, isn’t that misleading, this idea of GAAP gross profit? As Michelle said, you’re not scoring profits yet. You may next month, but you’re not yet.

Mr. BYRNE: Larry, that’s…

KUDLOW: Quick answer.

Mr. BYRNE: …that’s…

KUDLOW: Quick answer.

Mr. BYRNE: Quick answer is that’s a silly question. GAAP has a concept called revenue, a concept called gross profit, a concept called net profit. Those are GAAP–a basic accounting course teaches that.

KUDLOW: But every company of the 5,000 reporters have net, not gross. Anyway…

CARUSO-CABRERA: You know what? We’ve got to go.

Mr. BYRNE: Well, we give them that, too.

KUDLOW: …I don’t understand it. I don’t understand it. Anyway, thank you for coming back.

CARUSO-CABRERA: Thank you.

Mr. BYRNE: OK.

CARUSO-CABRERA: Despite all that.

Mr. BYRNE: Thanks.

CARUSO-CABRERA: All right. Thank you very much, sir. Coming up next, the K&C and my view on today’s financial headlines. And later, we talk trucking e-commerce and outsourcing.

See it here.

Posted in The ArchiveComments (2)

Kudlow & Cramer and I Discuss the Upcoming Google Dutch Auction IPO

On April 30, 2004, I went on Kudlow and Cramer. Larry Kudlow and Jim Cramer invited me on to discuss the upcoming Google IPO, which was being performed as Dutch Auction IPO (pioneered by Bill Hambrecht, and employed by Overstock in its IPO two years previously). Jim in particular seemed to welcome my explanation of how corrupt the IPO game is on Wall Street, and the virtues of this alternative.

Posted in The ArchiveComments (0)

Kudlow & Cramer and I Discuss the Upcoming Google Dutch Auction IPO

On April 30, 2004, I went on Kudlow and Cramer. Larry Kudlow and Jim Cramer invited me on to discuss the upcoming Google IPO, which was being performed as Dutch Auction IPO (pioneered by Bill Hambrecht, and employed by Overstock in its IPO two years previously). Jim in particular seemed to welcome my explanation of how corrupt the IPO game is on Wall Street, and the virtues of this alternative.

Posted in The ArchiveComments (1)

James Cramer, Larry Kudlow & Me 23 July 2004

In the summer of 2004 I went on Kudlow & Cramer to discuss 2004 Q2 results. We were still growing extraordinarily fast (88% in real terms, and gross profits were growing 106%). Our GAAP losses of $2.3 million on $87.8 million in sales for the quarter, or 2.6%, were in line with our strategy of maintaining high rates of growth while running roughly break-even, which I had publicly defined as +/- 1% on an annual basis. Incidentally, Overstock went on to finish 2004, our fifth full year in business, a half-billion dollar company, having shown real growth of 84% and gross profit growth of 158%, and losing $5 million (that is, running at -1% net income on a GAAP basis), and generating positive $25 million of operating cash flow.

Note that Jim Cramer reads from David Rocker here. Jim would later claim that he never met David Rocker except for one time in a grocery store.

 

Posted in The ArchiveComments (0)

  • Popular
  • Latest
  • Comments
  • Tags
  • Subscribe

Related Sites