Overwrought, over-stretched, over there

More Overstock craziness...

Overstock raises $40M in stock placement

Troubled online auction house Overstock.com has announced it has raised US$40 million selling around 2.7 million common shares to institutional investors. The money is needed for working capital, including sales, marketing and inventory purchases.

Stifel Nicolaus analyst Scott Devin saw this as a positive event, saying that the cash injection "gives the company enough capital to attempt to fix the core business." The market appears to agree: Overstock shares rose 46c, around 3%, yesterday.

Overstock washes more dirty linen

After the first open letter posted on the Overstock forums, CEO Patrick Byrne posts another. It's not only an attempt to pour oil on troubled waters, but an appeal to users of the site to suggest improvements. Along with this backtracking, delaying and suddenly asking for confirmation on policies he'd said were a done deal only serve to muddy the waters further.

It's often a complaint about eBay that they aren't contactable, that they don't listen, that the "consultations with the community" aren't visible, but in practice if the actions on Overstock are the alternative, I'm glad eBay are the way they are. As a seller and buyer I like to know where I am. I want a stable selling environment. I want management of the site that don't justify their employees based on their personal lives. Above all I actually like eBay keeping a professional stance and not getting drawn into squabbling with sellers and buyers.

Here's to Doug and his team!

Overstock have same counterfeit problems as eBay

In an open letter on the Overstock forums, CEO Patrick M. Byrne chastised sellers for their attitude to Overstock staff. Angry sellers turned on them over new measures bought in to prevent auctions with a buy it now price a couple of pennies higher than the starting price.

"Starting price $29.95, Make it Mine @ $30.00." Folks, that is not an auction, that is a classified ad. Our real auctions have disappeared under an ocean of such classified ads, which destroys closing rates for everyone.

In a sideways dig at eBay, he mentioned a "competitor’s environment where such behavior is tolerated", whilst naming and shaming the biggest offenders.

More interesting than noting Overstock are mirroring eBays move to give auctions a higher profile, is a paragraph hidden away in the middle of his diatribe.

We decided that our auctions of designer items were little better than the competition's. I know that the ethic of auction sites is to hide behind the claim that they are a neutral venue, and in a legal sense that is what we are as well, but from an ethical perspective, I am simply unwilling to allow Overstock customers, even those visiting our auctions board, to be sold anything fake. If this means that all the auctions business dries up, then that is what it is going to mean. No one gets to sell fake merchandise on Overstock. It's that simple.

It's good to see that counterfeit items removed from sale on eBay are not going to simply end up on alternative sites. All auction sites should take note of his ethic "If we do not know if it is real, then it should not go up".