Overstock.com 2014 Annual Report Download - page 29

Table of Contents
Our recently-launched insurance offerings will face competition from traditional insurance brokers and direct insurance marketing organizations.
In 2014 we launched a tab offering insurance for vehicle, residential and small businesses on our website. The tab allows consumers to compare live
quotes for insurance on residential, vehicle, and small business insurance, and to bind (pay for and have go into effect) insurance policies. The insurance
business is highly competitive, and many of our current and potential competitors in this area have greater brand recognition, longer operating histories,
larger customer bases and significantly greater financial, marketing and other resources than we do. Further, most of the risks applicable to our business
generally are also applicable to our insurance offerings business.
We are involved in substantial litigation.
From time to time we receive claims of and become subject to consumer protection, employment, intellectual property and other commercial
litigation related to the conduct and operation of our business and the sale of products on our Website. In connection with such litigation, we may be subject
to significant damages or equitable remedies. In addition, we have in the past been, are now, and in the future may be, involved in substantial litigation in
which we are the plaintiff, including litigation regarding the constitutionality of certain state tax laws, and the prime broker litigation described below. Any
of such litigation, whether as plaintiff or defendant, could be costly and time consuming and could divert management and key personnel from our regular
business operations. We do not currently believe that any of our outstanding litigation will have a material adverse effect on our business, prospects,
financial condition or results of operations. However, due to the uncertainty of litigation and depending on the amount and the timing, an unfavorable
resolution of some or all of these matters could materially affect our business, prospects, financial condition and results of operations.
Our prime broker litigation may have an adverse effect on our business and financial condition.
We remain involved in substantial litigation against Goldman Sachs Group, Inc., Goldman Sachs & Co., Goldman Sachs Execution & Clearing L.P.,
Merrill Lynch, Pierce, Fenner & Smith, Inc., and Merrill Lynch Professional Clearing Corporation, and the use of management’s time and attention in
connection with the litigation and related matters may reduce the time management is able to spend on other aspects of our business, which may have adverse
effects on other aspects of our business. To the extent that any such adverse effects exceed any benefits we may realize from the litigation, it could harm our
business, prospects, financial condition and results of operation.
Public statements we or our Chief Executive Officer, Patrick M. Byrne, have made or may make in the future may antagonize regulatory officials or others.
We and our Chief Executive Officer, Patrick M. Byrne, have from time to time made public statements regarding our or his beliefs about matters of
public interest, including statements regarding naked short selling and regulatory capture. Some of those public statements have been critical of the
Securities and Exchange Commission and other regulatory agencies. These public statements may have consequences for us, whether as a result of increased
regulatory scrutiny or otherwise. Additionally, other officers may make public statements that could have adverse consequences and these statements could
materially harm our business.
The price of our securities may be volatile and you may lose all or a part of your investment.
The market price of our common stock historically has been subject to significant fluctuations. These fluctuations could continue. It is possible that
in future periods our results of operations may be below the expectations of public market analysts and investors. If this occurs, the market price of our
securities may decline.
Our quarterly operating results are volatile and may adversely affect the market price of our securities.
Our future revenues and operating results have varied in the past and may continue to vary significantly from quarter to quarter due to a number of
factors, many of which are outside our control, and any of which could harm our business. As a result, we believe that quarterly comparisons of our operating
results are not necessarily meaningful and that you should not rely on the results of one quarter as an indication of our future performance. In addition to the
other risk factors described in this report, additional factors that have caused and/or could cause our quarterly operating results to fluctuate and in turn affect
the market price of our securities include:
• increases in the cost of advertising and changes in our sales and marketing expenditures;
• our inability to retain existing customers or encourage repeat purchases;
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