OSTK's stock price

The price of a share of Overstock.com Inc.'s equity has drifted downward considerably since the company filed that shockingly unaudited 10Q a little more than a month ago.

A share was worth $16.25 at the close of business November 16, but only $13.22 after yesterday.

Still, one might fairly argue that the Refco analogy that immediately sprung to my mind at the time was hasty. Refco folded within a single week after its accounting came under scrutiny. That scrutiny began in earnest, as I've mentioned before, on October 10, 2005 when the company announced it had discovered a receivable owed to the company in the amnount of $430 million. Refco filed for chapter 11 protection only one week later. Since Overstock is still around, should we dismiss the proposed analogy?

Not entirely. Financial services firms, like Refco, are especially vulnerable to a quick unravelling, simply because trust is all they are selling. It is their stock in trade. If Overstock were only selling trust in its value as a counter-party, it would likely be done now, too. But Overstock is selling physical merchandise, a fact that can slow the forces of destruction.

The Facebook shenanigans that have more recently garnered attention began well before the fall-out of auditee with auditor. Yet the emergence of the former into the light of dayt so soon after the latter has a poetic appropriateness to it, and some of the statements that Byrne and Bagley have made since the matter became public have had the sound of desperation.

Oh, BTW, a moment ago I mentioned that Overstock sells physical merchandise. I wonder, though, if that is still what underlies its stock price. Perhaps for purposes of stock analysts Overstock is really selling a share of its lawsuits. But more on that possibility another time.