Related Posts

Accounting News Roundup: Big Tax Break or Big Spending?; Ernst & Young Partner Promotions in DC; Friend-on-Friend Fraud | 07.21.11

As debt talks intensify, Obama opens door to short-term deal to buy more time [WaPo]
The contentious budget talks that have dominated Washington for months intensified Wednesday, prompting President Obama to say he would accept a short-term hike in the debt ceiling if it gave lawmakers time to finalize a comprehensive deal. Obama had pledged to veto any short-term measure, but White House spokesman Jay Carney said Wednesday that the president could accept an extension of “a few days” if it allowed a long-term deficit-reduction and debt-ceiling deal to work its way throug>My Big Tax Break Looks Like Your Big Spending [Bloomberg]
There is plenty of spending to cut. For instance, we’ve got one government program that hands people money to buy houses that, in most cases, they would buy anyway. They get even more money if they buy a more expensive house. Over the next five years, that program alone will cost almost $500 billion. Another federal agency will spend more than $400 billion to reward people for making money by investing and earning capital gains and dividends rather than by going to work and taking their income in wages. I like investors and I participate in the market, but is this really the sort of activity that requires a $400 billion subsidy?

Fed planning for potential default [Reuters]
The Federal Reserve is actively preparing for the possibility that the United States could default as a deadline for raising the government’s $14.3 trillion borrowing limit looms, a top Fed policymaker said on Wednesday. Charles Plosser, president of the Philadelphia Federal Reserve Bank, said the U.S. central bank has for the past few months been working closely with Treasury, ironing out what to do if the world’s biggest economy runs out of cash on August 2.

Cisco’s 6,500 Job Cuts Could Hurt Push for Offshore Tax Holiday [Bloomberg]
Cisco Systems Inc. (CSCO)’s plan to eliminate about 6,500 jobs worldwide is complicating the corporate lobbying campaign for a tax holiday that would allow multinational companies to return $1 trillion in offshore profits to the U.S. at a low tax rate. The San Jose, California-based company, the world’s largest networking-equipment maker, has been among the most vocal supporters of a repatriation holiday being considered in the U.S. Congress. Cisco chief executive John Chambers has said he wants to return as much as $30 billion in overseas profits to the U.S. The company could increase its headcount by 10 percent, depending on details of a repatriation bill, he said before the job-elimination announcement.

Federal auditors scold IRS for slow notification of security breaches [WaPo]
In a recent report, the Treasury Department Inspector General for Tax Administration reprimanded the Internal Revenue Service for failing to notify taxpayers in a timely way — if at all —when the tax agency inadvertently exposed their personal information. IRS records showed 4,081 inadvertent disclosures of taxpayers’ personal information in fiscal 2009 and fiscal 2010. The IRS sent letters to taxpayers whose privacy was violated 86 days after the fact in 20 percent of the cases auditors examined in a sample of incidents from July 2010 to February 2011.

3 Groups Denied Break By I.R.S. Are Named [NYT]
Three nonprofit advocacy groups that were denied tax exemption by the Internal Revenue Service were all units of Emerge America, an organization devoted to cultivating female political leaders for local, state and federal government. The I.R.S. denied tax exemption to the groups — Emerge Nevada, Emerge Maine and Emerge Massachusetts — because, the agency wrote in denial letters, they were set up specifically to cultivate Democratic candidates. Their Web sites ask for evidence that participants in their training programs are Democrats.

Twitter Poised to Close a Two-Stage $800M Funding, With Half Used to Cash Out Investors and Employees [All Things D]
In a move reminiscent of one done by Facebook in 2009, Twitter is close to completing an $800 million funding deal that will include a second part in which around $400 million of the total will be used to cash out current investors and also employees. According to several sources close to the situation, the complex transaction could be completed within two weeks. Along with basic funding needs, this is largely being done this way to give those with stakes in the San Francisco microblogging company an ability to monetize their privately held common stock and also to do this selling in a more organized — and legal — manner.

Ernst & Young’s Greater Washington Office Announces Leadership Promotions [E&Y]
Four new partners in the DC office. If your office has announced promotions, we want to know.

PwC US Appoints Robert W. McCutcheon as New Industrial Products Leader [PwC]
RWM is the Pittsburgh OMP and will continue in that role but now is also responsible for leading the group that services several industries including “aerospace & defense, chemicals, engineering & construction, industrial manufacturing, metals, transportation & logistics, and forest, paper and packaging.”

Friend-on-friend swindles increase as economy flounders: Prosecutors [NYP]
Don’t forget family members.

Live Blogging the Overstock.com Earnings Call

4:57: Everybody ready to do this? We exchanged an email with Sam Antar a little bit ago and he says he never gets on the call so we know he’s listening along. Sam, can’t you get one of those things that will disguise your voice and that makes it sound like your voicebox was removed?

5:00: Slides are working but These Salt Lake City people need to get their act together.

5:02: Jonathan Johnson in the hizzous! Dr. Patrick is in attendance and Steve Chestnut. Yeah, that 10-K was two weeks late, Johnnie. You should probably mention that. Non-GAAP financial measures? You mean the whole 10-K? We kid, we kid.

5:03: Chestnut gets on and he name drops KPMG. Thanks Klynveldians for making this a virtually painless process. Chesty agrees with Patsy’s sentiments that he’s sorry for the delay but appreciates your patience throughout this whole mess.

Oh boy. Accountants getting thrown under the bus. They’re hiring new people though. Ones that have appropriate training in debits and credits. Hell, they’ll throw in some internal audit people too. Progress is being made, make no mistake.


5:07: Patrick Byrne is up! He’s stoked to be here. Going through the numbers and Patsy mentions that Johnnie Johnson never sounds bored while going over the minutiae. “ALL IS GOOD!” Stalling…Skips an entire slide for some reason (probably not important). Pat doesn’t know what the future holds. That’s deep man. He’ll stop talking about the future now. You know who Patrick cares about? The consumers! He’s passing savings on to you, the American people and Overstock shoppers.

5:11: This thing is generating cash, sayeth Chestnut. Jesus, we are cruising through these slides. Think he’s skipping over anything? An investment banker told Patsy that “profit is noble.” He thinks its Chinese or something. Definitely not Nietzsche. Pat likes LL Bean, btw. Johnnie Johnson is back on. Just because LL Bean is a great company doesn’t mean OSTK isn’t going to try like hell to be numero uno in customer satisfaction.

Okay, these guys really like LL Bean. Patrick is talking about duck boots and grandpas now. Really profound stuff here. Did they mention they were above Amazon, Zappos, etc?

5:15: No reason to read slide 13…moving along, moving along. Patrick is reminiscing about someone at Allen & Co. who said something smart at one time in the past. Not really going anywhere…Yes. Please keep up the abrupt stops and starts. Johnnie do you want to chime in? Pat says they have tight expense controls. This must be the one area of the company where controls are just a-okay. $46 million in cash flow is nothing to sneeze at people. Patrick still doesn’t want to talk about the future.

5:19: Questions. Matt Schindler/BofA (sorry if I butchered the spelling): nice revenue number guys. How’d you do it? Great question, sayeth Patrick. Patrick can’t believe this didn’t happen three years ago but hey, whatever. ’09 wasn’t so hot compared to other years because you know, it pretty much sucked for everybody.

What about gross margin? Patsy said that 20% gross margin was too high and was going to give it back to customers? Now it’s 17% WTF? Are you doing customers a favor or did you get hammered by the seasonal whathaveyou? Patsy says that OSTK wants to be cheaper than everybody in the entire universe, so hell yeah, they’re passing it on to the consumer.

5:26: WE ARE NOT TALKING ABOUT THE FUTURE! Do you know what the future holds? We sure as hell don’t but chances are it involves the SEC so we’re not going there. END. OF. STORY.

The book of this company will be written one day and chapter one will be human development. Who will write this book? Patrick? Robby Boyd? Floyd Norris? Good God, when is this BofA guy’s turn over? One final question: Q1 is the past so that’s technically not the future so how is it??

Patrick says that you may have heard that he was in some hot water, so Q1 actually is the future, thankyouverymuch. Next question.

5:30: Patrick’s fraternity brother is next up and they compliment each other for being such swell guys. Patrick especially likes his buddy’s Minnesota accent. Sounds like Johnnie is running the show because Patrick says that he’s the one insisting that Patrick keep his piehole shut about the future.

5:35: Jesus, Marge Gunderson asks another snoozer of a question. Patrick plugs another book that no one has ever heard of called “The Dick” or something.

Marge Gunderson: Any litigation? – Johnnie will handle this. Prime brokers are going down in September of 2011. Byrne can’t help himself and blurts out that the it will be the OJ Simpson trial of the financial world. That’s nice. Murder. The murder of OSTK.

Hey! What about those Q1 earnings?? It’s still TBD but we’re tentatively shooting for late April. KPMG has been burning the midnight oil! Patrick is singing their praises right now. They’re a great crew. Not like the hacks at Grant Thornton. Herculean effort KPMG. Props. Tons of props. Nice job team. No plans for you to be fired.

5:42: Tom O’Halloran from an bank I’ve never heard of. Byrne claims that the OSTK is part of the American psyche now. Coca-Cola, Baseball, and Overstock.com. Steve Chestnut number drops $900 million in revenues. That’s almost a billion! But we’re still kind of small, we’re not delusional. Johnnie knows that Americans see OSTK as a real alternative for stretching their nickel.

Patrick is now talking macro-econ now and we’re totally disinterested. Btw, did you notice that OSTK is the only discounter on the customer satisfaction survey?

5:48: Talking inventory…What about cash levels? You’ve got about $140 mil in cash. Is that enough? What do you like to see in the future?

Patrick says if working capital drops $30 mil they’re in deep shit. Since this involves the future, Johnnie Johnson takes over and Patrick shuts his trap.

5:51: A emailed question from fellow named Nick whose last name is being withheld to protect him. Weird. He wants to know about patent infringements. Jesus, are Sam’s questions going to get asked or not? The Company will fight these tooth and nail. Johnnie will fight these suits dammit. No settlements. It’s about principle, after all.

Michal Ungai (sp?) is up. Something about future depreciation. Patrick asks Johnnie for permission to answer the question, so it must be serious. Are we talking about this?…stand by…If you’re assuming what we are, then you’re good to go.

5:58: Johnnie says time is up so everybody beat it. Patrick says KPMG needs to get the Q1 done and then they can go on vacay. That’s reassuring.