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LONG OVERSTOCK – Nasdaq: OSTK – Timing Has Never Been Better For LONG Activist Intervention.

|About: Overstock.com, Inc. (OSTK), Includes: AMZN, W

If you are reading this research note, you probably know I have been very vocal on the OSTK short trade. NOW things have changed and there is a way to create immediate shareholder value while at the same time improving the long term viability of OSTK retail business. Pressure on Patrick Byrne to step down as CEO and hire a reputable executive from competitors has never been so high.

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What has changed?

1. For once OSTK is now trading at $15 dollars instead of $90. This makes OSTK not only “cheap(-er)” but also makes it a good target for activist investors arguing for a change (after an 81% decline in the stock price).

2. After this decline in OSTK stock price, long term supporters now see Patrick Byrne as a liability for the company and are finally pushing for his resignations as the CEO of the company.

3. Both, Long and Shorts agree that without Patrick Byrne as the CEO, the shares of OSTK would be worth a multiple of the current price. ($30? $40? – that’s a very arbitrary number, difficult to quantify). Both sides agree on the fact that OSTK is trading at current prices due to the lack of credibility of the current management team led by Patrick Byrne.

4. Seeing Patrick Byrne having to sell shares in the low $10’s just 2 months ago (rumored margin call), tells me Patrick Byrne is under a lot of pressure himself and I am betting he is now willing to listen to shareholders’ call for a Change, resign as the CEO and bring in a respectable executive from a reputable competitor such as Amazon or Wayfair.

5. Over the past 5 days the borrow cost at retail brokerage IB has gone up by a multiple of 5x from around 16% to above over 90% on Monday (currently at 68.91%). OSTK has also become very difficult to borrow.

6. The Unemon short thesis was always based on Block-chain dreams being unrealistic and the fact that Patrick Byrne as CEO would weigh down the share price.

7. The only remaining short thesis is now that with Patrick Byrne at the helm of OSTK more of the old same will happen and OSTK will slowly get dragged to the ground!

8. All it will take is a simple press release announcing Byrne’s resignation and it will cause OSTK to double within days ...and Byrne now has a big incentive to do exactly this! So watch for an activist campaign to drive OSTK higher.

I do believe timing has never been better: NOW people can be long OSTK for the right reasons, not for the block-chain dream (which might or might not become reality).

UNEMON1 IS NOW LONG OVERSTOCK – OSKT - … for the right reasons!

Cheers,

Unemon

Disclosure: I am/we are long OSTK.