Overstock.com 2011 Annual Report Download - page 39

Table of Contents
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. We generally have payment terms with our fulfillment partners that extend beyond the amount of time necessary to
collect proceeds from our customers. As a result of holiday sales, at December 31 of each year, our cash, cash equivalents, and marketable 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.
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
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