Overstock.com 2010 Annual Report Download - page 39

Table of Contents
securities balances typically reach their highest level (other than as a result of cash flows provided by or used in investing and financing activities). This
operating cycle results in a corresponding increase in accounts payable at December 31. Our accounts payable balance generally declines during the first three
months of the year, resulting in a corresponding decline in our cash, cash equivalents, and marketable securities balances.
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 contains 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.
The price of our stock may be vulnerable to manipulation.
We filed an unfair business practice lawsuit against Morgan Stanley & Co. Incorporated, Goldman Sachs & Co., Bear Stearns Companies, Inc., Bank of
America Securities LLC, Bank of New York, Citigroup Inc., Credit Suisse (USA) Inc., Deutsche Bank Securities, Inc., Merrill Lynch, Pierce, Fenner &
Smith, Inc., and UBS Financial Services, Inc., and have settled the case with respect to all defendants except Goldman Sachs Group, Inc., Goldman
Sachs & Co., Goldman Sachs Execution & Clearing L.P.; Merrill Lynch, Pierce, Fenner & Smith, Inc., Merrill Lynch Professional Clearing Corporation, and
Bank of America Securities LLC.
We believe these remaining defendants engaged in unlawful actions and have caused substantial harm to Overstock, and that certain of the defendants
have made efforts to drive the market price of Overstock's common stock down. To the extent that the defendants or other persons engage in any such actions
or take any other actions to interfere with or destroy or harm Overstock's existing and/or prospective business relationships with its suppliers, bankers,
customers, lenders, investors, prospective investors or others, our business, prospects, financial condition and results of operation could be
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