Overstock.com 2015 Annual Report Download - page 37
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The practice of “abusive naked short selling” places our stock at risk for manipulative attacks by large investment pools and prime brokers. Abusive
naked short selling is the practice by which short sellers place large short sell orders for shares without first borrowing the shares to be sold, or without having
first adequately located such shares and arranged for a firm contract to borrow such shares prior to the delivery date set to close the sale. While selling broker
dealers are by rule required to deliver shares to close a transaction by a certain date, and while purchasing broker-dealers are obligated by rule to purchase the
sold quantity of shares when they are not delivered to close the sale, these rules are often ignored. Abusive naked short selling has a depressive effect on share
prices when it is allowed to persist because the economic effect of abusive naked short selling is the oversupply of counterfeit stock to the market. We believe
the regulations designed to address this abusive practice are both inadequately structured and inadequately enforced. Consequently, we believe that without
the enactment of adequate regulations and the enforcement necessary to curb these abuses, the manipulations achieved through abusive naked short selling
are likely to continue. We believe that our stock has been subject to these abusive practices by those attempting to manipulate its price downward. To the
extent that our stock is subject to these practices in the future, our stock may be more volatile than it might otherwise be and/or may trade at prices below
those that might prevail in the absence of such abuses.
Regulation SHO requires the stock exchanges to publish daily a list of companies whose stock has failures-to-deliver above a certain threshold. It
also requires mandatory close-outs for open fail-to-deliver positions in threshold securities persisting for over 13 days, with the aim that no security would
appear on the threshold for any extended period. Despite that aim, our common stock has frequently appeared on the Regulation SHO threshold list for
extended and continuous periods and, while we do not currently appear on the Regulation SHO threshold list, in the past our stock has been on the list for
more trading days than any other company.
Any investment in our securities involves a high degree of risk. Investors should consider carefully the risks and uncertainties described above, and
all other information in this Form 10-K and in any reports we file with the SEC after we file this Form 10-K, before deciding whether to purchase or hold our
securities. Additional risks and uncertainties not currently known to us or that we currently deem immaterial may also become important factors that may
harm our business. The occurrence of any of the risks described in this Form 10-K could harm our business. The trading price of our securities could decline
due to any of these risks and uncertainties, and investors may lose part or all of their investment.
We generally have not received significant coverage by securities analysts, and the lack of coverage may adversely affect our share price and trading
volume. The lack of coverage may cause our share price or trading volume to be lower than they might be if more analysts covered us.
None.
As of December 31, 2015, we operated the following facilities:
• We lease approximately 150,000 square feet of office space in the United States for general corporate purposes. We are continuing the construction
of our new corporate headquarters in Salt Lake City, Utah and we expect to complete and occupy our new headquarters in 2016.
• We lease approximately 3,000 square feet of office space in Ireland.
• We lease approximately 3,000 square feet of office space in China.
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