Overstock.com 2012 Annual Report Download - page 35

Table of Contents
fourth quarter sales do exceed those of the preceding quarters, that we will be able to manage the increased sales effectively. Further, we generally
increase our inventories substantially in anticipation of holiday season shopping activity, which has a negative effect on our cash flow. Securities
analysts and investors may inaccurately estimate the effects of seasonality on our results of operations in one or more future quarters and, consequently,
our operating results may fall below expectations, causing the market price of our securities to decline.
Sales by our significant stockholders could have an adverse effect on the market price of our stock.
Several of our stockholders own significant portions of our common stock. If one or more of stockholders were to sell all or a portion of their
holdings of our common stock, the market price of our common stock could be negatively impacted. The effect of such sales, or of significant portions
of our stock being offered or made available for sale, could result in strong downward pressure on our stock price. Investors should be aware that they
could experience significant short-term volatility in our stock if such stockholders decide to sell all or a portion of their holdings of our common stock at
once or within a short period of time. In addition, the transfer of ownership of 50% or more of our outstanding shares within a three year period could
adversely affect our ability to use our net operating losses to offset future taxable net income.
We do not intend to pay dividends on our common stock and you may lose the entire amount of your investment in our common stock.
We have never declared or paid any cash dividends on our common stock and do not intend to pay dividends on our common stock for the
foreseeable future. We intend to invest our future earnings, if any, to fund our growth. Therefore, you will not receive any funds without selling your
shares. We cannot assure that you will receive a positive return on your investment when you sell your shares or that you will not lose the entire amount
of your investment.
Our Amended and Restated Certificate of Incorporation, Amended and Restated Bylaws and the Delaware General Corporation Law contain
anti-takeover provisions which could discourage or prevent a takeover, even if an acquisition would be beneficial to our stockholders.
Several provisions of our Amended and Restated Certificate of Incorporation and Amended and Restated Bylaws could discourage potential
acquisition proposals and could delay or prevent a change in control of our company even if that change in control would be beneficial to our
stockholders. For example, only one-third of our board of directors is elected at each of our annual meetings of stockholders, which will make it more
difficult for a potential acquirer to change the management of our company, even after acquiring a majority of the shares of our common stock. These
provisions, which cannot be amended without the approval of two-thirds of our stockholders, could diminish the opportunities for a stockholder to
participate in tender offers, including tender offers at a price above the then current market value of our common stock. In addition, our board of
directors, without further stockholder approval, may issue preferred stock, with such terms as the board of directors may determine, that could have the
effect of delaying or preventing a change in control of our company. The issuance of preferred stock could also adversely affect the voting powers of
the holders of common stock, including the loss of voting control to others. We are also afforded the protections of Section 203 of the Delaware
General Corporation Law, which could delay or prevent a change in control of our company or could impede a merger, consolidation, takeover or other
business combination involving our company or discourage a potential acquirer from making a tender offer or otherwise attempting to obtain control of
our company.
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