This morning, a certain sub-sector of the financial blogosphere is abuzz over the press release that Overstock.com (OSTK) put out late yesterday announcing that they had fired its outside auditor, who had just been hired earlier this year, and were filing an “unreviewed” 10-Q. Here’s a snip, which starts with a quote from Friedrich Nietzsche:
This morning, a certain sub-sector of the financial blogosphere is abuzz over the ll things are subject to interpretation; whichever interpretation prevails at a given time is a function of power and not truth. — Friedrich Nietzsche.
Although PwC had given us eight years of fine service, after we filed our 2008 Form 10-K, we ran a formal RFP process for selecting our 2009 auditors as a reflection of my belief that changing auditors every decade or so might be healthy. Grant Thornton won that RFP, and the Audit Committee selected Grant Thornton as our 2009 auditor….Before Grant Thornton took our audit engagement in Q1 2009, it reviewed our filed 2008 Form 10-K and told us it was comfortable with our past accounting practices.
That’s just a snip, but the whole letter, which includes 11 separate points and is signed “your humble servant” by CEO Patrick M. Byrne is definitely worth reading. So too are some of the folks who write regularly about Overstock, including Gary Weiss, Sam Antar and Henry Blodget, all of whom have their own takes on the filing.
As we’ve footnoted before, our default position on Overstock is to essentially ignore them simply because there’s so many other folks who consider Overstock filings — and Byrne — something of a sport. But this one was too odd to ignore.
To be fair, 10-Qs don’t require the same level of scrutiny as 10-Ks do. In a Q, the auditor doesn’t need to submit a separate letter that is filed as an attachment. But “Going Rogue” as Overstock has decided to do here, is definitely out of the ordinary.
Then again, given the tempestuous nature of the company and its CEO, maybe Overstock investors shouldn’t be all that surprised. It’s also a lot easier to take an odd CEO when the stock is up nearly 50% year-to-date.
Photo credit: (AP Photo/Douglas C. Pizac)
