Yes, says Francis Chou of Toronto-based Chou Funds. Indeed, this beleaguered online retailer of excess merchandise is his largest holding (as of Dec. 31, 2006). Given the thick fog of negativity surrounding Overstock.com, we might suspect Chou of a misstep but the Canadian “Fund Manager of the Decade” is not to be lightly dismissed given his record for outperforming the stock market over the past 15 years.
Fairfax Financial Holdings, another company under siege by the short sellers, also owns a large stake in Overstock.com. Fairfax Financial has Chou on board as a vice president (and is located one floor down in the same building as Chou’s office). Together, the two groups own a one-quarter stake. OverStock.com CEO Patrick Byrne owns approximately one-third.
The company is trading at as steep a discount as its merchanise: one-half of annual revenues. Any spot of good news could trigger a jump in stock price, especially if short sellers cover. But will the good news come? Web metrics site www.Alexa.com shows traffic to Overstock.com has been on the decline in recent quarters.
OSTK 1-yr. chart:
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