0001130713-20-000072 | 10-Q | XBRL Viewer

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Cover Page - shares	9 Months Ended
Cover Page - shares	Sep. 30, 2020	Oct. 30, 2020
Cover [Abstract]
Document Type	10-Q
Document Quarterly Report	true
Document Period End Date	Sep. 30, 2020
Document Transition Report	false
Entity File Number	000-49799
Entity Registrant Name	OVERSTOCK.COM, INC.
Entity Incorporation, State or Country Code	DE
Entity Tax Identification Number	87-0634302
Entity Address, Address Line One	799 West Coliseum Way
Entity Address, City or Town	Midvale
Entity Address, State or Province	UT
Entity Address, Postal Zip Code	84047
City Area Code	801
Local Phone Number	947-3100
Title of 12(b) Security	Common Stock, $0.0001 par value
Trading Symbol	OSTK
Security Exchange Name	NASDAQ
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Accelerated Filer
Entity Small Business	false
Entity Emerging Growth Company	false
Entity Shell Company	false
Entity Common Stock, Shares Outstanding		42,765,117
Entity Central Index Key	0001130713
Amendment Flag	false
Current Fiscal Year End Date	--12-31
Document Fiscal Period Focus	Q3
Document Fiscal Year Focus	2020

Consolidated Balance Sheets (Unaudited) - USD ($) $ in Thousands	Sep. 30, 2020	Dec. 31, 2019
Current assets:
Cash and cash equivalents	$ 529,710	$ 112,266
Restricted cash	2,570	2,632
Marketable securities at fair value	1,355	10,308
Accounts receivable, net of allowance for credit losses of $2,053 and $2,474 at September 30, 2020 and December 31, 2019, respectively	35,403	24,728
Inventories	6,867	5,840
Prepaids and other current assets	19,704	21,589
Total current assets	595,609	177,363
Property and equipment, net	125,142	130,028
Intangible assets, net	9,009	11,756
Goodwill	27,120	27,120
Equity securities	48,983	42,043
Operating lease right-of-use assets	25,402	25,384
Other long-term assets, net	11,717	4,033
Total assets	842,982	417,727
Current liabilities:
Accounts payable	119,663	75,416
Accrued liabilities	145,668	88,197
Unearned revenue	78,757	41,821
Operating lease liabilities, current	5,959	6,603
Other current liabilities	3,803	3,962
Total current liabilities	353,850	215,999
Long-term debt, net	42,148	0
Operating lease liabilities, non-current	21,640	21,554
Other long-term liabilities	6,038	2,319
Total liabilities	423,676	239,872
Stockholders' equity:
Common Stock, Value, Outstanding	4	4
Additional paid-in capital	966,299	764,845
Accumulated deficit	(537,089)	(580,390)
Accumulated other comprehensive loss	(556)	(568)
Treasury stock at cost - 3,559 and 3,326	(71,124)	(68,807)
Equity attributable to stockholders of Overstock.com, Inc.	357,534	115,084
Equity attributable to noncontrolling interests	61,772	62,771
Total stockholders' equity	419,306	177,855
Total liabilities and stockholders' equity	842,982	417,727
Series A-1 Preferred Stock [Member]
Stockholders' equity:
Preferred stock, $0.0001 par value, authorized shares - 5,000	0	0
Series B Preferred Stock
Stockholders' equity:
Preferred stock, $0.0001 par value, authorized shares - 5,000	$ 0	$ 0

Consolidated Balance Sheets (Unaudited) (Parenthetical) - USD ($) $ in Thousands	Sep. 30, 2020	Dec. 31, 2019
Preferred Stock, Par or Stated Value Per Share	$ 0.0001	$ 0.0001
Preferred stock, shares authorized	5,000,000	5,000,000
Common stock, par value (in dollars per share)	$ 0.0001	$ 0.0001
Common stock, shares authorized	100,000,000	100,000,000
Common stock, shares issued	46,317,000	42,790,000
Common stock, shares outstanding	42,758,000	39,464,000
Treasury stock, shares	3,559,000	3,326,000
Accounts Receivable, Allowance for Credit Loss, Current	$ (2,053)	$ (2,474)
Series B Preferred Stock
Preferred stock, shares issued	357,000	357,000
Preferred stock, shares outstanding	357,000	357,000
Series A-1 Preferred Stock [Member]
Preferred stock, shares issued	4,204,000	4,210,000
Preferred stock, shares outstanding	4,204,000	4,210,000

Consolidated Statements of Operations (Unaudited) - USD ($) shares in Thousands, $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2020	Sep. 30, 2019	Sep. 30, 2020	Sep. 30, 2019
Revenue, net
Total net revenue	$ 731,651	$ 347,099	$ 1,865,768	$ 1,088,537
Cost of goods sold
Total cost of goods sold	560,883	277,551	1,439,278	871,966
Gross profit	170,768	69,548	426,490	216,571
Operating expenses
Sales and marketing	72,010	34,215	188,562	102,252
Technology	34,984	32,782	101,458	101,368
General and administrative	34,225	32,681	94,022	104,877
Total operating expenses	141,219	99,678	384,042	308,497
Operating income (loss)	29,549	(30,130)	42,448	(91,926)
Interest Income, Operating	402	449	1,288	1,482
Interest expense	(579)	(57)	(1,367)	(289)
Other expense, net	(7,526)	(4,781)	(5,014)	(14,048)
Income (Loss), Including Portion Attributable to Noncontrolling Interest, before Tax	21,846	(34,519)	37,355	(104,781)
Provision for income taxes	620	23	1,313	279
Net income (loss)	21,226	(34,542)	36,042	(105,060)
Less: Net loss attributable to noncontrolling interests	(2,165)	(3,604)	(7,372)	(10,197)
Net income (loss) attributable to stockholders of Overstock.com, Inc.	$ 23,391	$ (30,938)	$ 43,414	$ (94,863)
Net income (loss) per share of common stock:
Net income (loss) attributable to common shares—basic	$ 0.50	$ (0.89)	$ 1.00	$ (2.74)
Net income (loss) attributable to common shares—diluted	$ 0.50	$ (0.89)	$ 0.99	$ (2.74)
Weighted average shares of common stock outstanding:
Basic	41,595	35,241	40,697	34,289
Diluted	42,202	35,241	41,030	34,289
Retail
Revenue, net
Total net revenue	$ 717,695	$ 340,798	$ 1,824,249	$ 1,070,898
Cost of goods sold
Total cost of goods sold	548,982	272,545	1,403,418	858,169
Gross profit	168,713	68,253	420,831	212,729
Operating expenses
Total operating expenses	125,458	77,641	333,284	244,571
Income (Loss), Including Portion Attributable to Noncontrolling Interest, before Tax	43,050	(9,251)	86,926	(31,530)
Other
Revenue, net
Total net revenue	13,956	6,301	41,519	17,639
Cost of goods sold
Total cost of goods sold	$ 11,901	$ 5,006	$ 35,860	$ 13,797

Consolidated Statements of Comprehensive Loss (Unaudited) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2020	Sep. 30, 2019	Sep. 30, 2020	Sep. 30, 2019
Statement of Comprehensive Income [Abstract]
Net income (loss)	$ 21,226	$ (34,542)	$ 36,042	$ (105,060)
Other comprehensive income
Unrealized gain on cash flow hedges, net of expense for taxes of $0, $0, $0, and $0	4	4	12	12
Other comprehensive income	4	4	12	12
Comprehensive income (loss)	21,230	(34,538)	36,054	(105,048)
Less: Comprehensive loss attributable to noncontrolling interests	(2,165)	(3,604)	(7,372)	(10,197)
Comprehensive income (loss) attributable to stockholders of Overstock.com, Inc.	$ 23,395	$ (30,934)	$ 43,426	$ (94,851)

- Definition

The consolidated profit or loss for the period, net of income taxes, including the portion attributable to the noncontrolling interest.

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+ Details

Consolidated Statements of Comprehensive Loss (Unaudited) (Parenthetical) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2020	Sep. 30, 2019	Sep. 30, 2020	Sep. 30, 2019
Statement of Comprehensive Income [Abstract]
Unrealized gain on cash flow hedges, net of expense for taxes of $0, $0, $0, and $0	$ 0	$ 0	$ 0	$ 0

Consolidated Statements of Changes in Stockholders' Equity (Unaudited) - USD ($) shares in Thousands, $ in Thousands	Total	Common stock	Preferred stock	Additional paid-in capital	Accumulated deficit	Accumulated other comprehensive loss	Treasury stock	Parent	Noncontrolling interest	Series A Preferred Stock Preferred stock	Series A-1 Preferred Stock [Member]	Series A-1 Preferred Stock [Member] Preferred stock	Series B Preferred Stock	Series B Preferred Stock Preferred stock
Common stock, beginning balance (in shares) at Dec. 31, 2018		35,346					3,200
Preferred stock, beginning balance (in shares) at Dec. 31, 2018										127		0		355
Increase (Decrease) in Stockholders' Equity
Shares converted (in shares)										(2)		(125)		(2)
Partners' Capital Account, Exchange of Shares										125
Preferred Stock, Shares, Dividends Declared												3,577
Shares declared, not distributed												0
Common stock issued upon vesting of restricted stock		259
Common stock sold through offerings		2,960
Common stock repurchased through business combination							47
Tax withholding upon vesting of restricted stock							76
Preferred stock, ending balance (in shares) at Sep. 30, 2019										0		3,702		357
Common stock, ending balance (in shares) at Sep. 30, 2019		38,565					3,323
Beginning balance at Dec. 31, 2018				$ 657,981	$ (458,897)	$ (584)	$ (66,757)		$ 78,960
Stockholders' Equity, Including Portion Attributable to Noncontrolling Interest [Abstract]
Stock-based compensation to employees and directors				13,623
Adjustments to Additional Paid in Capital, Noncontrolling Interests									0
Proceeds from issuance and exercise of stock warrants	$ 52,112			52,112
Other				2,416	425				(3,266)
Net income (loss) attributable to stockholders of Overstock.com, Inc.	(94,863)				(94,863)
Net other comprehensive income	12					12
Common stock repurchased through business combination							(643)
Tax withholding upon vesting of restricted stock							(1,373)
Net loss attributable to noncontrolling interests	(10,197)								(10,197)
Ending balance at Sep. 30, 2019	168,952			726,132	(553,335)	(572)	$ (68,773)	$ 103,455	65,497
Common stock, beginning balance (in shares) at Dec. 31, 2018		35,346					3,200
Preferred stock, beginning balance (in shares) at Dec. 31, 2018										127		0		355
Increase (Decrease) in Stockholders' Equity
Preferred Stock, Shares, Dividends Declared											4,085
Preferred stock, ending balance (in shares) at Dec. 31, 2019										0	4,210	4,210	357	357
Common stock, ending balance (in shares) at Dec. 31, 2019		42,790					3,326
Beginning balance at Dec. 31, 2018				657,981	(458,897)	(584)	$ (66,757)		78,960
Ending balance at Dec. 31, 2019	177,855			764,845	(580,390)	(568)	$ (68,807)		62,771
Common stock, beginning balance (in shares) at Jun. 30, 2019		38,561					3,322
Preferred stock, beginning balance (in shares) at Jun. 30, 2019										3		123		356
Increase (Decrease) in Stockholders' Equity
Shares converted (in shares)										(1)		(2)		(1)
Partners' Capital Account, Exchange of Shares										2
Preferred Stock, Shares, Dividends Declared												3,577
Shares declared, not distributed												0
Common stock issued upon vesting of restricted stock		4
Common stock sold through offerings		0
Common stock repurchased through business combination							0
Tax withholding upon vesting of restricted stock							1
Preferred stock, ending balance (in shares) at Sep. 30, 2019										0		3,702		357
Common stock, ending balance (in shares) at Sep. 30, 2019		38,565					3,323
Beginning balance at Jun. 30, 2019				719,010	(522,397)	(576)	$ (68,746)		71,786
Stockholders' Equity, Including Portion Attributable to Noncontrolling Interest [Abstract]
Stock-based compensation to employees and directors				4,467
Adjustments to Additional Paid in Capital, Noncontrolling Interests									0
Proceeds from issuance and exercise of stock warrants				0
Other				2,655	0				(2,685)
Net income (loss) attributable to stockholders of Overstock.com, Inc.	(30,938)				(30,938)
Net other comprehensive income	4					4
Common stock repurchased through business combination							0
Tax withholding upon vesting of restricted stock							(27)
Net loss attributable to noncontrolling interests	(3,604)								(3,604)
Ending balance at Sep. 30, 2019	168,952			726,132	(553,335)	(572)	$ (68,773)	103,455	65,497
Preferred Stock, Value, Issued			$ 0
Increase (Decrease) in Stockholders' Equity
Common Stock, Value, Outstanding		$ 3
Total shares of common stock outstanding		35,242
Preferred Stock, Value, Issued											$ 0		$ 0
Common Stock, Value, Outstanding	$ 4
Total shares of common stock outstanding	39,464
Common stock, beginning balance (in shares) at Dec. 31, 2019		42,790					3,326
Preferred stock, beginning balance (in shares) at Dec. 31, 2019										0	4,210	4,210	357	357
Increase (Decrease) in Stockholders' Equity
Shares converted (in shares)										0		0		0
Partners' Capital Account, Exchange of Shares										0
Preferred Stock, Shares, Dividends Declared												0
Shares declared, not distributed												(6)
Common stock issued upon vesting of restricted stock		696
Common stock sold through offerings		2,831
Common stock repurchased through business combination							0
Tax withholding upon vesting of restricted stock							233
Preferred stock, ending balance (in shares) at Sep. 30, 2020										0	4,204	4,204	357	357
Common stock, ending balance (in shares) at Sep. 30, 2020		46,317					3,559
Beginning balance at Dec. 31, 2019	$ 177,855			764,845	(580,390)	(568)	$ (68,807)		62,771
Stockholders' Equity, Including Portion Attributable to Noncontrolling Interest [Abstract]
Stock-based compensation to employees and directors				8,356
Adjustments to Additional Paid in Capital, Noncontrolling Interests									5,000
Proceeds from issuance and exercise of stock warrants	195,540			192,692
Other				406	(113)				1,373
Net income (loss) attributable to stockholders of Overstock.com, Inc.	43,414				43,414
Net other comprehensive income	12					12
Common stock repurchased through business combination							0
Tax withholding upon vesting of restricted stock							(2,317)
Net loss attributable to noncontrolling interests	(7,372)								(7,372)
Ending balance at Sep. 30, 2020	419,306			966,299	(537,089)	(556)	$ (71,124)	357,534	61,772
Common stock, beginning balance (in shares) at Jun. 30, 2020		43,885					3,553
Preferred stock, beginning balance (in shares) at Jun. 30, 2020										0		4,204		357
Increase (Decrease) in Stockholders' Equity
Shares converted (in shares)										0		0		0
Partners' Capital Account, Exchange of Shares										0
Preferred Stock, Shares, Dividends Declared												0
Shares declared, not distributed												0
Common stock issued upon vesting of restricted stock		17
Common stock sold through offerings		2,415
Common stock repurchased through business combination							0
Tax withholding upon vesting of restricted stock							6
Preferred stock, ending balance (in shares) at Sep. 30, 2020										0	4,204	4,204	357	357
Common stock, ending balance (in shares) at Sep. 30, 2020		46,317					3,559
Beginning balance at Jun. 30, 2020				770,984	(560,480)	(560)	$ (70,537)		63,937
Stockholders' Equity, Including Portion Attributable to Noncontrolling Interest [Abstract]
Stock-based compensation to employees and directors				2,623
Adjustments to Additional Paid in Capital, Noncontrolling Interests									0
Proceeds from issuance and exercise of stock warrants				192,692
Other				0	0				0
Net income (loss) attributable to stockholders of Overstock.com, Inc.	23,391				23,391
Net other comprehensive income	4					4
Common stock repurchased through business combination							0
Tax withholding upon vesting of restricted stock							(587)
Net loss attributable to noncontrolling interests	(2,165)								(2,165)
Ending balance at Sep. 30, 2020	419,306			$ 966,299	$ (537,089)	$ (556)	$ (71,124)	$ 357,534	$ 61,772
Preferred Stock, Value, Issued			$ 0								$ 0		$ 0
Increase (Decrease) in Stockholders' Equity
Common Stock, Value, Outstanding	$ 4	$ 4
Total shares of common stock outstanding	42,758	42,758

Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Thousands	9 Months Ended
	Sep. 30, 2020	Sep. 30, 2019
Cash flows from operating activities:
Consolidated net income (loss)	$ 36,042	$ (105,060)
Adjustments to reconcile consolidated net income (loss) to net cash provided by (used in) operating activities:
Depreciation and amortization	22,709	23,033
Non-cash operating lease cost	4,379	4,940
Stock-based compensation to employees and directors	8,356	13,623
Impairment of equity securities	813	6,964
Income (Loss) from Equity Method Investments	(11,909)	(4,922)
Gain on disposal of business	10,705	0
Impairment of Intangible Assets, Finite-lived	0	1,406
Other non-cash adjustments	2,587	1,978
Changes in operating assets and liabilities, net of acquisitions:
Accounts receivable, net	(15,715)	12,858
Inventories	(1,027)	6,864
Prepaids and other current assets	(42)	5,473
Other long-term assets, net	26	(1,046)
Accounts payable	44,101	(42,110)
Accrued liabilities	59,657	(8,683)
Unearned revenue	37,161	(10,066)
Operating lease liabilities	(4,954)	(4,086)
Other long-term liabilities	3,413	(205)
Net cash provided by (used in) operating activities	198,710	(89,195)
Cash flows from investing activities:
Purchase of equity securities	(1,553)	(5,106)
Proceeds from sale of equity securities and marketable securities	6,306	7,082
Acquisitions of businesses, net of cash acquired	0	4,886
Expenditures for property and equipment	(15,067)	(17,902)
Deconsolidation of cash of Medici Land Governance, Inc.	(4,056)	0
Other investing activities, net	(1,061)	(3,219)
Net cash used in investing activities	(15,431)	(14,259)
Cash flows from financing activities:
Payments on long-term debt	(1,566)	(3,141)
Proceeds from long-term debt	47,500	0
Proceeds from sale of common stock, net of offering costs	195,540	52,112
Payments of taxes withheld upon vesting of restricted stock	(2,317)	(1,373)
Other financing activities, net	(5,054)	(1,161)
Net cash provided by financing activities	234,103	46,437
Net increase (decrease) in cash, cash equivalents and restricted cash	417,382	(57,017)
Cash, cash equivalents and restricted cash, beginning of period	114,898	142,814
Cash, cash equivalents and restricted cash, end of period	532,280	85,797
Non-cash investing and financing activities:
Recognition of right-of-use assets upon adoption of ASC 842	0	30,968
Deposit applied to business combination purchase price	$ 0	$ 7,347

BASIS OF PRESENTATION	9 Months Ended
BASIS OF PRESENTATION	Sep. 30, 2020
Organization, Consolidation and Presentation of Financial Statements [Abstract]
BASIS OF PRESENTATION	1. DESCRIPTION OF BUSINESS Overstock.com, Inc. is an online retailer business and advocate of blockchain technology. As used herein, "Overstock," "the Company," "we," "our" and similar terms include Overstock.com, Inc. and its majority-owned subsidiaries, unless the context indicates otherwise.

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

9 Months Ended

Sep. 30, 2020

Accounting Policies [Abstract]

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND SUPPLEMENTAL DISCLOSURES

Basis of Presentation

We have prepared the accompanying unaudited consolidated financial statements pursuant to the rules and regulations of the Securities and Exchange Commission ("SEC") regarding interim financial reporting. Accordingly, certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States ("GAAP") have been omitted in accordance with the rules and regulations of the SEC. These financial statements should be read in conjunction with our audited annual consolidated financial statements and related notes included in our Annual Report on Form 10-K for the year ended December 31, 2019. There have been no significant changes to our significant accounting policies disclosed in Note 2—Accounting Policies, included in Part II, Item 8, Financial Statements and Supplementary Data, of our Annual Report on Form 10-K for the year ended December 31, 2019, except as disclosed below.

The accompanying unaudited consolidated financial statements reflect all adjustments, consisting only of normal recurring adjustments, which are, in our opinion, necessary for a fair presentation of results for the interim periods presented. For purposes of comparability, we reclassified other certain immaterial amounts in the prior periods presented to conform with the current period presentation. The results of operations for the three and nine months ended September 30, 2020 are not necessarily indicative of the results to be expected for any future period or the full fiscal year, due to seasonality and other factors.

Principles of consolidation

The accompanying consolidated financial statements include our accounts and the accounts of our wholly-owned subsidiaries and other subsidiaries over which we exercise control. All intercompany account balances and transactions have been eliminated in consolidation.

In February 2020, Medici Land Governance, Inc. ("MLG"), an indirect majority-owned subsidiary, consummated the sale of shares of its common stock to an unrelated third party. Upon completion of the transaction, our indirect ownership in MLG was reduced from 57% to 35% of MLG's issued and outstanding shares of common stock. As a result of our loss of a controlling financial interest in MLG under the voting interest model, we performed an assessment of control under the variable interest entity ("VIE") model and determined MLG does not meet the qualifications of a VIE for purposes of consolidation. Accordingly, we deconsolidated MLG's consolidated net assets and noncontrolling interest from our consolidated financial statements and results beginning on February 22, 2020, the date that control ceased. The amount of gain recognized on the deconsolidation was $10.7 million, which is included in our consolidated statements of operations in Other income (expense), net. The gain primarily relates to the remeasurement of our retained equity interest in MLG at fair value, which was determined based on the same price per share MLG provided for the sale of common stock to the third-party and price per share we received in settling a portion of our intercompany debt for additional shares in MLG. Post deconsolidation, MLG became one of our equity method investees for which we perform services. See Note 6—Equity Securities for additional information.

Use of estimates

The preparation of financial statements in conformity with GAAP requires estimates and assumptions that affect the reported amounts of assets and liabilities, revenues and expenses, and related disclosures of contingent liabilities in our consolidated financial statements and accompanying notes. Estimates are used for, but not limited to, receivables valuation, revenue recognition, Club O and gift card breakage, sales returns, vendor incentive discount offers, inventory valuation, depreciable lives and valuation of property and equipment and internally-developed software, goodwill valuation, intangible asset valuation, equity securities valuation, income taxes, stock-based compensation, performance-based compensation, self-

funded health insurance liabilities and contingencies. Our estimates involving, among other items, forecasted revenues, sales volume, pricing, cost and availability of inventory, consumer demand and spending habits, the continued operations of our supply chain and logistics network, and the overall impact of social distancing on our workforce are even more difficult to estimate as a result of uncertainties associated with the scope and duration of the pandemic and various actions taken by governmental authorities, private business and other third parties in response to the global novel coronavirus ("COVID-19") pandemic, the ultimate geographic spread of the virus, the ongoing economic effect of the pandemic and the post-pandemic economic recovery. Although these estimates are based on our best knowledge of current events and actions that we may undertake in the future, the variability of these factors depends on a number of conditions, including uncertainty associated with the COVID-19 pandemic, how long these conditions will persist, what additional measures may be introduced or reintroduced by governments or private parties or what effect any such additional measures may have on our business and thus our accounting estimates may change from period to period. To the extent there are differences between these estimates and actual results, our consolidated financial statements may be materially affected.

Supplemental cash flow information

The following table shows supplemental cash flow information (in thousands):



	Nine months ended September 30,
	2020		2019
Non-cash investing and financing activities:
Recognition of right-of-use assets upon adoption of ASC 842	$	—	$	30,968
Deposit applied to business combination purchase price	—		7,347
Recognition of right-of-use assets obtained in exchange for new operating lease liabilities	5,132		17,238

Recently adopted accounting standards

In June 2016, the FASB issued ASU 2016-13, Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments, which revises how entities account for credit losses for most financial assets and certain other instruments that are not measured at fair value through net income. Topic 326 was subsequently amended by ASU 2019-04, Codification Improvements to Topic 326, Financial Instruments—Credit Losses, Topic 815, Derivatives and Hedging, and Topic 825, Financial Instruments and ASU 2019-11, Codification Improvements to Topic 326, Financial Instruments—Credit Losses. Under the guidance, the measurement of credit losses will be based on a current expected credit losses methodology. We adopted the changes under the new standard on January 1, 2020. We utilized a prospective transition approach for our debt securities for which other-than-temporary impairment had been recognized prior to January 1, 2020. As a result, the amortized cost basis remains the same before and after the effective date of ASU 2016-13. The implementation of ASU 2016-13 did not have a material impact on our consolidated financial statements and disclosures. We will continue to actively monitor the impact of the COVID-19 pandemic on expected credit losses.

Recently issued accounting standards

In December 2019, the FASB issued ASU 2019-12, Income Taxes ("Topic 740")—Simplifying the Accounting for Income Taxes, which removes certain exceptions to the general principles in Topic 740 and amends existing guidance to improve consistent application. For public entities, ASU 2019-12 is required to be adopted for annual periods beginning after December 15, 2020, including interim periods within those fiscal years. Early adoption is permitted. Management is currently evaluating the impact of the adoption of this ASU on our consolidated financial statements and related disclosures.

In January 2020, the FASB issued ASU 2020-01, Investments—Equity Securities (Topic 321), Investments—Equity Method and Joint Ventures (Topic 323), and Derivatives and Hedging (Topic 815): Clarifying the Interactions between Topic 321, Topic 323, and Topic 815, which clarifies the interaction of the accounting for equity securities under Topic 321, the accounting for equity method investments in Topic 323, and the accounting for certain forward contracts and purchased options in Topic 815. For public entities, ASU 2020-01 is required to be adopted for annual periods beginning after December 15, 2020, including interim periods within those fiscal years. Early adoption is permitted. Management is currently evaluating the impact of the adoption of this ASU on our consolidated financial statements and related disclosures.

FAIR VALUE MEASUREMENT

9 Months Ended

Sep. 30, 2020

Fair Value Disclosures [Abstract]

Fair Value Measurement and Measurement Inputs, Recurring and Nonrecurring [Text Block]

3. FAIR VALUE MEASUREMENT

Our financial assets and liabilities are initially measured at fair value, which is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date (exit price). To increase the comparability of fair value measures, the following hierarchy prioritizes the inputs to valuation methodologies used to measure fair value:


•	Level 1—Quoted prices for identical instruments in active markets;


•	Level 2—Quoted prices for similar instruments in active markets, quoted prices for identical or similar instruments in markets that are not active, and model-derived valuations in which all significant inputs and significant value drivers are observable in active markets; and


•	Level 3—Valuations derived from valuation techniques in which one or more significant inputs or significant value drivers are unobservable.

Our assets and liabilities that are adjusted to fair value on a recurring basis are cash equivalents, certain equity and marketable securities, and deferred compensation liabilities, which fair values are determined using quoted market prices from daily exchange traded markets on the closing price as of the balance sheet date and are classified as Level 1. Our other financial instruments, including cash, restricted cash, accounts receivable, accounts payable, accrued liabilities, finance obligations, and debt are carried at cost, which approximates their fair value. Certain assets, including long-lived assets, certain equity securities, goodwill, cryptocurrencies, and other intangible assets, are measured at fair value on a nonrecurring basis; that is, the assets are not measured at fair value on an ongoing basis, but are subject to fair value adjustments using fair value measurements with unobservable inputs (level 3), apart from cryptocurrencies which use quoted prices from various digital currency exchanges with active markets, in certain circumstances (e.g., when there is evidence of impairment).

The following tables summarize our assets and liabilities measured at fair value on a recurring basis using the following levels of inputs as of September 30, 2020 and December 31, 2019, as indicated (in thousands):



	Fair Value Measurements at September 30, 2020:
	Total		Level 1		Level 2		Level 3
Assets:
Cash equivalents - Money market mutual funds	$	566	$	566	$	—	$	—
Equity securities, at fair value	455		455		—		—
Marketable securities, at fair value	1,355		1,355		—		—
Trading securities held in a "rabbi trust" (1)	121		121		—		—
Total assets	$	2,497	$	2,497	$	—	$	—
Liabilities:
Deferred compensation accrual "rabbi trust" (2)	$	138	$	138	$	—	$	—
Total liabilities	$	138	$	138	$	—	$	—



	Fair Value Measurements at December 31, 2019:
	Total		Level 1		Level 2		Level 3
Assets:
Cash equivalents - Money market mutual funds	$	2,799	$	2,799	$	—	$	—
Equity securities, at fair value	823		823		—		—
Marketable securities, at fair value	10,308		10,308		—		—
Trading securities held in a "rabbi trust" (1)	116		116		—		—
Total assets	$	14,046	$	14,046	$	—	$	—
Liabilities:
Deferred compensation accrual "rabbi trust" (2)	$	116	$	116	$	—	$	—
Total liabilities	$	116	$	116	$	—	$	—

___________________________________________


(1)	— Trading securities held in a rabbi trust are included in Prepaids and other current assets and Other long-term assets, net in the consolidated balance sheets.

(2)

— Non-qualified deferred compensation in a rabbi trust is included in Accrued liabilities and Other long-term liabilities in the consolidated balance sheets.

Fair Value of Financial Instruments, Policy [Policy Text Block]


•	Level 1—Quoted prices for identical instruments in active markets;


•	Level 2—Quoted prices for similar instruments in active markets, quoted prices for identical or similar instruments in markets that are not active, and model-derived valuations in which all significant inputs and significant value drivers are observable in active markets; and


•	Level 3—Valuations derived from valuation techniques in which one or more significant inputs or significant value drivers are unobservable.

PROPERTY AND EQUIPMENT, NET

9 Months Ended

Sep. 30, 2020

Property, Plant and Equipment [Line Items]

Property, Plant and Equipment, Policy [Policy Text Block]

4. PROPERTY AND EQUIPMENT, NET

Property and equipment, net consist of the following (in thousands):



	September 30, 2020			December 31, 2019
	September 30, 2020			December 31, 2019
Computer hardware and software	$	234,782		$	223,309
Building	69,245			69,266
Furniture and equipment	16,440			17,739
Land	12,781			12,781
Leasehold improvements	5,400			11,921
Building machinery and equipment	9,785			9,796
Land improvements	7,004			7,003
	355,437			351,815
Less: accumulated depreciation	(230,295		)	(221,787		)
Total property and equipment, net	$	125,142		$	130,028

Capitalized costs associated with internal-use software and website development, both developed internally and acquired externally, and depreciation of costs for the same periods associated with internal-use software and website development consist of the following (in thousands):



	Three months ended September 30,				Nine months ended September 30,
	2020		2019		2020		2019
Capitalized internal-use software and website development	$	4,005	$	3,248	$	11,595	$	10,798
Depreciation of internal-use software and website development	$	3,721	$	3,162	$	10,644	$	9,523

Property and equipment depreciation expense is classified within the corresponding operating expense categories on our consolidated statements of operations as follows (in thousands):



	Three months ended September 30,				Nine months ended September 30,
	2020		2019		2020		2019
Cost of goods sold - retail	$	159	$	170	$	526	$	516
Technology	4,965		5,042		14,504		15,109
General and administrative	1,557		1,261		4,927		3,762
Total depreciation	$	6,681	$	6,473	$	19,957	$	19,387

INTANGIBLE ASSETS AND GOODWILL

9 Months Ended

Sep. 30, 2020

Intangible assets, net [Abstract]

Goodwill and Intangible Assets, Intangible Assets, Policy [Policy Text Block]

5. INTANGIBLE ASSETS

Intangible assets, net consist of the following (in thousands):



	September 30, 2020			December 31, 2019
Intangible assets subject to amortization, gross	$	30,267		$	30,284
Less: accumulated amortization of intangible assets subject to amortization	(21,258		)	(18,528		)
Total intangible assets, net	$	9,009		$	11,756

Amortization of intangible assets is classified within the corresponding operating expense categories in our consolidated statements of operations as follows (in thousands):



	Three months ended September 30,				Nine months ended September 30,
	2020		2019		2020		2019
Technology	$	846	$	896	$	2,539	$	2,687
Sales and marketing	10		16		31		48
General and administrative	55		133		182		(526		)
Total amortization	$	911	$	1,045	$	2,752	$	2,209

In connection with our 2018 acquisition of Mac Warehouse, we received the final valuation information and completed our determination and allocation of the purchase price during the quarter ended March 31, 2019 and recognized adjustments to the provisional values as of March 31, 2019, which among other items decreased the recognized Intangible assets and resulted in a reversal of previously recognized amortization expense of $1.4 million during the quarter ended March 31, 2019.

During the three and nine months ended September 30, 2019, we realized a $1.4 million impairment loss included in General and administrative expense in our consolidated statements of operations related to certain patents held by our Medici Ventures segment. The estimated fair value of the patents were determined based on Level 3 inputs, which were unobservable (see Note 3—Fair Value Measurement), including market participant assumptions for similar assets in an inactive market.

EQUITY SECURITIES

9 Months Ended

Sep. 30, 2020

Investments and Equity Securities [Abstract]

Investment, Policy [Policy Text Block]

6. EQUITY SECURITIES

Equity securities under ASC 321

Certain of our equity securities lack readily determinable fair values and therefore the securities are measured at cost minus impairment, if any, plus or minus changes resulting from observable price changes in orderly transactions for the identical or similar equity securities of the same issuer. The carrying amount of our equity securities without readily determinable fair values was approximately $3.9 million and $3.9 million at September 30, 2020 and December 31, 2019, respectively. Cumulative downward adjustments for price changes and impairments for our equity securities without readily determinable fair values were $6.2 million, and the cumulative upward adjustments for price changes to equity investments were $958,000 as of September 30, 2020. The impairments and downward adjustments for the period related to equity securities without readily determinable fair values at September 30, 2020 and 2019 is as follows (in thousands):



	Three months ended September 30,					Nine months ended September 30,
	2020		2019			2020		2019
Impairments and downward adjustments of equity securities without readily determinable fair values	$	—	$	(2,750	)	$	—	$	(5,708	)

Certain of these equity securities and our marketable securities, which had a carrying value of $1.8 million at September 30, 2020 and $11.1 million at December 31, 2019, are carried at fair value based on Level 1 inputs. See Note 3—Fair Value Measurement. The portion of unrealized gains and losses for the period related to equity securities with readily determinable fair value still held at September 30, 2020 and 2019 is calculated as follows (in thousands):



	Three months ended September 30,						Nine months ended September 30,
	2020			2019			2020			2019
Net losses recognized during the period on equity securities and marketable securities	$	(813	)	$	(700	)	$	(3,268	)	$	(1,818	)
Less: Net gains recognized during the period on equity securities and marketable securities sold	—			—			2,161			—
Unrealized losses during the reporting period on equity securities and marketable securities still held	$	(813	)	$	(700	)	$	(5,429	)	$	(1,818	)

Equity method securities under ASC 323

Our equity method securities include equity securities in which we can exercise significant influence, but not control, over these entities through either holding more than a 20% voting interest in the entity or through our representation on the entity's board of directors. The following table includes our equity method securities and ownership interest as of September 30, 2020:



	Ownership interest
Bitt Inc.	21%
Boston Security Token Exchange LLC	50%
Chainstone Labs, Inc.	29%
FinClusive Capital, Inc.	12%
GrainChain, Inc.	18%
Medici Land Governance, Inc.	35%
Minds, Inc.	23%
PeerNova, Inc.	11%
SettleMint NV	29%
Spera, Inc.	19%
VinX Network Ltd.	29%
Voatz, Inc.	20%

The carrying amount of our equity method securities was approximately $44.6 million and $37.3 million at September 30, 2020 and December 31, 2019, respectively.

The following table summarizes the net losses recognized on equity method securities included in Other expense, net in our consolidated statements of operations (in thousands):



	Three months ended September 30,				Nine months ended September 30,
	2020		2019		2020		2019
Net loss recognized on our proportionate share of the net losses of our equity method securities and amortization of the basis difference	$	5,896	$	1,864	$	11,909	$	4,922
Impairments on equity method securities	813		—		813		1,256
Net loss recognized during the period on equity method securities sold	—		—		—		524

For the three and nine months ended September 30, 2020, we recognized $2.6 million and $6.7 million, respectively, of revenue in Other Revenue on our consolidated statements of operations for developer and other secondment services provided to certain of these entities that are accounted for under the equity method. For the three and nine months ended September 30, 2019, we recognized $639,000 and $1.9 million, respectively, of revenue in Other Revenue on our consolidated statements of operations for developer and other secondment services provided to certain of these entities that are accounted for under the equity method.

We are party to notes receivable agreements with certain of these equity method entities. The carrying amount of these notes receivables, including accrued interest, was $5.7 million and $4.6 million at September 30, 2020 and December 31, 2019, respectively, which are included in Other long-term assets, net in the consolidated balance sheets.

BORROWINGS	9 Months Ended
BORROWINGS	Sep. 30, 2020
Debt Disclosure [Abstract]
BORROWINGS	8. BORROWINGS Loan Core Capital Funding Corporation LLC loan agreements In March 2020, we entered into two loan agreements with Loan Core Capital Funding Corporation LLC. The loan agreements provide a $34.5 million Senior Note, carrying interest at an annual rate of 4.242%, and a $13.0 million Mezzanine Note, carrying interest at an annual rate of 5.002%. The loans carry a blended annual interest rate of 4.45%. The Senior Note is for a 10-year term (stated maturity date is March 6, 2030) and requires interest only payments, with the principal amount and any then unpaid interest due and payable at the end of the 10-year term. The Mezzanine Note has a stated 10-year term, though the agreement requires principal and interest payments monthly over approximately a 46-month payment period. Our debt issuance costs and debt discount are amortized using the straight-line basis which approximates the effective interest method. As of September 30, 2020, the total outstanding debt on these loans was $45.3 million, net of $624,000 in capitalized debt issuance costs, and the total amount of the current portion of these loans included in Other current liabilities on our consolidated balance sheets was $3.2 million. Further, the Company will serve as a guarantor under the Senior Note (the "Senior Note Guaranty") and the Mezzanine Note (the "Mezzanine Note Guaranty"). Both loans include certain financial and non-financial covenants and are secured by our corporate headquarters and the related land and rank senior to stockholders. Overstock has agreed under the Senior Note Guaranty to, among other things, maintain, until all of the obligations guaranteed by Overstock under the Senior Note Guaranty have been paid in full, (i) a net worth in excess of $30 million and minimum liquid assets of $3 million for so long as the Mezzanine Note is outstanding, and (ii) a net worth in excess of $15 million and minimum liquid assets of $1 million from and after the date the Mezzanine Note has been paid in full. Overstock has also agreed under the Mezzanine Note Guaranty to, among other things, maintain a net worth in excess of $30 million and minimum liquid assets of $3 million until all obligations guaranteed by Overstock under the Mezzanine Note Guaranty have been paid in full. We are in compliance with our debt covenants and continue to monitor the most recent developments regarding the COVID-19 pandemic and potential impact to our ongoing compliance with our debt covenants.

LEASES

9 Months Ended

Sep. 30, 2020

Leases [Abstract]

Lessee, Operating Leases [Text Block]

9. LEASES

We have operating leases for warehouses, office space, and data centers. Our leases have remaining lease terms of 1 year to 11 years, some of which may include options to extend the leases perpetually, and some of which may include options to terminate the leases within 1 year.

The following table provides a summary of leases by balance sheet location (in thousands):



	September 30, 2020		December 31, 2019
Operating right-of-use assets	$	25,402	$	25,384
Operating lease liabilities, current	5,959		6,603
Operating lease liabilities, non-current	21,640		21,554

The components of lease expenses were as follows (in thousands):



	Three months ended September 30,				Nine months ended September 30,
	2020		2019		2020		2019
Operating lease cost	$	1,829	$	2,685	$	5,897	$	7,556
Short-term lease cost	6		28		25		90
Variable lease cost	336		406		1,224		1,378

The following table provides a summary of other information related to leases (in thousands):



	Nine months ended September 30,
	2020		2019
Cash payments included in operating cash flows from lease arrangements	$	6,417	$	6,629
Right-of-use assets obtained in exchange for new operating lease liabilities	$	5,132	$	17,238

The following table provides supplemental balance sheet information related to leases:



	September 30, 2020		December 31, 2019
Weighted-average remaining lease term - operating leases	5.63 years		5.86 years
Weighted-average discount rate - operating leases	7	%	8	%

Maturity of lease liabilities under our non-cancellable operating leases as of September 30, 2020, are as follows (in thousands):



Payments due by period	Amount
2020 (Remainder)	$	2,375
2021	7,230
2022	7,102
2023	5,716
2024	3,894
Thereafter	7,628
Total lease payments	33,945
Less interest	6,346
Present value of lease liabilities	$	27,599

COMMITMENTS AND CONTINGENCIES	9 Months Ended
COMMITMENTS AND CONTINGENCIES	Sep. 30, 2020
Commitments and Contingencies Disclosure [Abstract]
COMMITMENTS AND CONTINGENCIES	10. COMMITMENTS AND CONTINGENCIES Legal proceedings and contingencies From time to time, we are involved in litigation concerning consumer protection, employment, intellectual property, claims under the securities laws, and other commercial matters related to the conduct and operation of our business and the sale of products on our Website. In connection with such litigation, we have been in the past and we may be in the future subject to significant damages. In some instances, other parties may have contractual indemnification obligations to us. However, such contractual obligations may prove unenforceable or non-collectible, and if we cannot enforce or collect on indemnification obligations, we may bear the full responsibility for damages, fees, and costs resulting from such litigation. We may also be subject to penalties and equitable remedies that could force us to alter important business practices. Such litigation could be costly and time consuming and could divert or distract our management and key personnel from our business operations. Due to the uncertainty of litigation and depending on the amount and the timing, an unfavorable resolution of some or all of such matters could materially affect our business, results of operations, financial position, or cash flows. The nature of the loss contingencies relating to claims that have been asserted against us are described below. In September 2009, SpeedTrack, Inc. sued us along with 27 other defendants in the United States District Court in the Northern District of California, alleging that we infringed a patent covering search and categorization software. We believe that certain third-party vendors of products and services sold to us are contractually obligated to indemnify us, and we have tendered defense of the case to an indemnitor who accepted the defense. In April 2016, the court entered an order partially dismissing the claims against us. In May 2016, the plaintiff filed an amended complaint and we filed an answer. In March 2020, the court entered a judgment of non-infringement in our favor and against the plaintiff. In June 2020, the plaintiff filed an appeal to the United States District Court of Appeals for the Federal Circuit. No estimate of the possible loss or range of loss can be made. We intend to vigorously defend this appeal. In February 2018, the Division of Enforcement of the SEC informed tZERO and subsequently informed us that it is conducting an investigation and requested that we and tZERO voluntarily provide certain information and documents related to tZERO and the tZERO security token offering in connection with its investigation. In December 2018, we received a follow-up request from the SEC relating to its investigation. As previously disclosed, on October 7, 2019, we received a subpoena from the SEC requesting documents related to the digital dividend of our Series A-1 preferred stock we announced to stockholders in June 2019 (discussed below in Note 12—Stockholders' Equity) and requesting Rule 10b5-1 plans of our officers and directors that were in effect during the period of January 1, 2018 through October 7, 2019. On December 9, 2019, we received a subpoena from the SEC requesting documents related to the GSR transaction and the alternative trading system run by tZERO ATS, LLC. On December 19, 2019, we received a subpoena from the SEC requesting our insider trading policies as well as certain employment and consulting agreements. We also previously received requests from the SEC regarding our communications with our former chief executive officer and director, Patrick Byrne, and the matters referenced in the December 2019 subpoenas. On May 27, 2020, we received a subpoena from the SEC requesting further information regarding the alternative trading system run by tZERO's ATS, LLC. We have responded to all subpoenas and requests for information and will continue to cooperate fully with the SEC in connection with its investigations and information requests. tZERO's broker-dealer subsidiaries are subject to extensive regulatory requirements under federal and state laws and regulations and self-regulatory organization ("SRO") rules. Each of SpeedRoute LLC ("SpeedRoute"), tZERO Markets, LLC ("tZERO Markets") and tZERO ATS, LLC is registered with the SEC as a broker-dealer under the Securities Exchange Act of 1934 (the "Exchange Act") and in the states in which it conducts securities business and is a member of FINRA and other SROs (as applicable). In addition, tZERO ATS, LLC owns and operates an alternative trading system. Each of SpeedRoute, tZERO Markets and tZERO ATS, LLC is subject to regulation, examination, investigation, and disciplinary action by the SEC, FINRA, and state securities regulators, as well as other governmental authorities and SROs with which it is registered or licensed or of which it is a member. Moreover, as a result of tZERO's projects seeking to apply distributed ledger technologies to the capital markets, tZERO's subsidiaries have been, and remain involved in, ongoing oral and written communications with regulatory authorities. As previously disclosed, tZERO's broker-dealer subsidiaries are currently undergoing various examinations, inquiries, and/or investigations undertaken by various regulatory authorities, which may result in financial and other settlements or penalties. Any significant failure by tZERO's broker-dealer subsidiaries to satisfy regulatory authorities that they are in compliance with all applicable rules and regulations could have a material adverse effect on tZERO and on us. tZERO's subsidiary, tZERO Crypto, Inc., is registered as or is applying to become a money transmitter (or its equivalent) in many states and is subject to extensive regulatory requirements applicable to money services businesses, including the requirements of the Financial Crimes Enforcement Network of the U.S. Department of the Treasury ("FinCEN"), anti-money laundering requirements, know-your-customer requirements, record-keeping, reporting and capital and bonding requirements, and inspection by state and federal regulatory agencies. Compliance with these requirements requires the dedication of significant resources and any material failure by tZERO Crypto, Inc. to remain in compliance with the applicable regulatory requirements could subject it to liability or limit the services it may offer. On September 27, 2019, a purported securities class action lawsuit was filed against us and our former chief executive officer and former chief financial officer in the United States District Court of Utah, alleging violations under Section 10(b), Rule 10b-5, Section 20(a), Section 20(A) of the Exchange Act. On October 8, 2019, October 17, 2019, October 31, 2019, and November 20, 2019, four similar lawsuits were filed in the same court also naming the Company and the above referenced former executives as defendants, bringing similar claims under the Exchange Act, and seeking similar relief. These cases were consolidated into a single lawsuit in December 2019. The Court appointed The Mangrove Partners Master Fund Ltd. as lead plaintiff in January 2020. In March 2020, an amended consolidated complaint was filed against us, our president of retail, our former chief executive officer, and our former chief financial officer. We filed a motion to dismiss and on September 28, 2020, the court granted our motion and entered judgment in our favor. The plaintiffs filed a motion to amend their complaint on October 23, 2020 and filed a notice of appeal on October 26, 2020. No estimates of the possible losses or range of losses can be made at this time. We intend to vigorously defend this action. On November 22, 2019, a shareholder derivative suit was filed against us and certain past and present directors and officers of the Company in the United States District Court for the District of Delaware, with allegations that include: (i) breach of fiduciary duties, (ii) unjust enrichment, (iii) insider selling and misappropriation of the Company's information, and (iv) contribution under Sections 10(b) and 21D of the Exchange Act. On December 17, 2019, a similar lawsuit was filed in the same court, naming the same defendants, bringing similar claims, and seeking similar relief. These cases were consolidated into a single lawsuit in January 2020. In March 2020, the court entered a stay on litigation, pending the outcome of the securities class action motion to dismiss. No estimates of the possible losses or range of losses can be made at this time. We intend to vigorously defend these actions. On April 23, 2020, a putative class action lawsuit was filed against us in the Circuit Court of the County of St. Louis, State of Missouri, alleging that we over-collected taxes on products sold into the state of Missouri. No estimate of the possible loss or range of loss can be made at this time. We intend to vigorously defend this action. We establish liabilities when a particular contingency is probable and estimable. At September 30, 2020 and December 31, 2019, we have accrued $2.6 million and $9.6 million, respectively, which are included in Accrued liabilities in our consolidated balance sheets. The decrease in our estimated liability for these amounts included in Accrued liabilities was primarily attributable to the reversal of a legal settlement accrual due to a ruling in our favor during the second quarter of 2020. It is reasonably possible that the actual losses may exceed our accrued liabilities.

INDEMNIFICATIONS AND GUARANTEES	9 Months Ended
INDEMNIFICATIONS AND GUARANTEES	Sep. 30, 2020
INDEMNIFICATIONS AND GUARANTEES
INDEMNIFICATIONS AND GUARANTEES	11. INDEMNIFICATIONS AND GUARANTEES During our normal course of business, we have made certain indemnities, commitments, and guarantees under which we may be required to make payments in relation to certain transactions. These indemnities include, but are not limited to, indemnities we entered into in favor of Loan Core Capital Funding Corporation LLC under our loan agreements, various lessors in connection with facility leases for certain claims arising from such facility or lease, the environmental indemnity we entered into in favor of the lenders under our prior loan agreements, customary indemnification arrangements in underwriting agreements and similar agreements, and indemnities to our directors and officers to the maximum extent permitted under the laws of the State of Delaware. The duration of these indemnities, commitments, and guarantees varies, and in certain cases, is indefinite. In addition, the majority of these indemnities, commitments, and guarantees do not provide for any limitation of the maximum potential future payments we could be obligated to make. As such, we are unable to estimate with any reasonableness our potential exposure under these items. We have not recorded any liability for these indemnities, commitments, and guarantees in the accompanying consolidated balance sheets. We do, however, accrue for losses for any known contingent liability, including those that may arise from indemnification provisions, when future payment is both probable and reasonably estimable.

STOCKHOLDERS' EQUITY	9 Months Ended
STOCKHOLDERS' EQUITY	Sep. 30, 2020
Equity [Abstract]
STOCKHOLDERS' EQUITY	12. STOCKHOLDERS' EQUITY Common stock Each share of common stock has the right to one vote. The holders of common stock are also entitled to receive dividends declared by the Board of Directors out of funds legally available, subject to prior rights of holders of all classes of stock outstanding having priority rights as to dividends. On May 19, 2020, we completed the distribution of our announced digital dividend (the "Dividend") payable in shares of our Series A-1 preferred stock. The Dividend was paid out at a ratio of 1:10, so that one share of Series A-1 preferred stock was issued for every ten shares of OSTK common stock, for every ten shares of Series A-1 preferred stock, and for every ten shares of Series B preferred stock held by all holders of such shares as of April 27, 2020, the record date for the Dividend. The number of shares of Series A-1 preferred stock declared as a stock dividend was 4,085 as of December 31, 2019 and the number of shares distributed was 4,079 on May 19, 2020. Preferred stock Each share of our Series A preferred stock, Series A-1 preferred stock, and our Series B preferred stock (collectively, the "preferred shares"), except as required by law, are intended to have voting and dividend rights similar to those of one share of common stock. Preferred shares rank senior to common stock with respect to dividends. Holders of the preferred shares are entitled to an annual cash dividend of $0.16 per share, in preference to any dividend payment to the holders of the common stock, out of funds of the Company legally available for payment of dividends and subject to declaration by our Board of Directors. Holders of the preferred shares are also entitled to participate in any cash dividends we pay to the holders of the common stock and are also entitled to participate in non-cash dividends we pay to holders of the common stock, subject to potentially different treatment if we effect a stock dividend, stock split, or combination of the common stock. There are no arrearages in cumulative preferred dividends. We declared and paid a cash dividend of $0.16 per share to the holders of our preferred stock during 2018 and 2019. Neither the Series A-1 preferred stock nor Series B preferred stock is required to be converted into or exchanged for shares of our common stock or any other entity; however, at our sole discretion, we may convert the Series A-1 preferred stock into Series B preferred stock at any time on a one-to-one basis. In the event of any liquidation, any amount available for distribution to stockholders after payment of all liabilities will be distributed proportionately, with each share of Series A-1 preferred stock and each share of Series B preferred stock being treated as though it were a share of our common stock. If we are party to any merger or consolidation in which our common stock is changed into or exchanged for stock or other securities of any other person (or the Company) or cash or any other property (or a right to receive the foregoing), we will use all commercially reasonable efforts to cause each outstanding share of the preferred stock to be treated as if such share were an additional outstanding share of common stock in connection with any such transaction. Neither the Series A-1 preferred stock nor the Series B preferred stock is registered under the Exchange Act. Common Stock Offering We completed a public offering of our common stock on August 14, 2020 and issued 2,415,000 shares of our common stock pursuant to an underwriting agreement, dated August 11, 2020, for proceeds totaling $192.7 million, net of $11.4 million in offering costs. JonesTrading Sales Agreement We entered into an Amended and Restated Capital on Demand^TMSales agreement dated June 26, 2020 with JonesTrading Institutional Services LLC ("JonesTrading") and D.A. Davidson & Co. ("D.A. Davidson"), under which we may conduct "at the market" public offerings of our common stock. Under the sales agreement, JonesTrading and D.A. Davidson, acting as our agents, may offer our common stock in the market on a daily basis or otherwise as we request from time to time. We have no obligation to sell additional shares under the sales agreement, but we may do so from time to time. For the nine months ended September 30, 2020, we did not sell any shares of our common stock pursuant to the sales agreement but have received $2.8 million of proceeds that was included in Accounts receivable, net on our consolidated balance sheet at December 31, 2019 for the sale of an aggregate of 415,904 shares of our common stock under the prior iteration of the agreement that were executed in late December 2019. As of September 30, 2020, we had $150.0 million available under our "at the market" sales program. GSR Agreement On April 1, 2020, tZERO issued 508,710 shares of tZERO common stock, representing approximately 0.5% of the issued and outstanding common stock of tZERO, to GSR Capital Ltd., a Cayman Islands exempted company ("GSR") in exchange for $5.0 million in consideration in full satisfaction of the Investment Agreement dated May 8, 2019. GSR's installment payments towards the Investment Agreement were included in Accrued liabilities on our consolidated balance sheet prior to the closing of the transaction.

STOCK-BASED AWARDS

9 Months Ended

Sep. 30, 2020

Share-based Payment Arrangement [Abstract]

STOCK-BASED AWARDS

13. STOCK-BASED AWARDS

We have equity incentive plans that provide for the grant to employees and board members of stock-based awards, including stock options and restricted stock. Employee accounting applies to awards granted by the Company or subsidiary of the Company or subsidiary's shares only to its own employees, respectively. Stock-based compensation expense is classified within the corresponding operating expense categories on our consolidated statements of operations as follows (in thousands):



	Three months ended September 30,					Nine months ended September 30,
	2020			2019		2020		2019
Cost of goods sold — retail	$	50		$	55	$	153	$	156
Sales and marketing	(76		)	486		621		1,460
Technology	460			1,428		1,822		4,325
General and administrative	2,189			2,498		5,760		7,682
Total stock-based compensation	$	2,623		$	4,467	$	8,356	$	13,623

When an award is forfeited prior to the vesting date, we recognize an adjustment for the previously recognized expense in the period of the forfeiture.

Overstock restricted stock awards

The Overstock.com, Inc. Amended and Restated 2005 Equity Incentive Plan (the "Plan") provides for the grant of incentive stock options to employees and directors of the Company and non-qualified stock options to consultants, as well as restricted stock units and other types of equity awards of the Company. These restricted stock awards generally vest over three years at 33.3% at the end of the first year, 33.3% at the end of the second year and 33.3% at the end of the third year, subject to the recipient's continuing service to us. In addition to our traditional equity awards, during the quarter ended March 31, 2019, we granted 502,765 restricted stock awards with a cumulative grant date fair value of $8.6 million which vested over a one-year period.

The cost of restricted stock units is determined using the fair value of our common stock on the date of the grant and compensation expense is either recognized on a straight-line basis over the vesting schedule or on an accelerated schedule when vesting of restricted stock awards exceeds a straight-line basis. The cumulative amount of compensation expense recognized at any point in time is at least equal to the portion of the grant date fair value of the award that is vested at that date.

The following table summarizes restricted stock award activity during the nine months ended September 30, 2020 (in thousands, except per share data):



	Nine months ended September 30, 2020
	Units		Weighted Average Grant Date Fair Value
Outstanding—beginning of year	1,051		$	26.22
Granted at fair value	478		9.82
Vested	(696	)	23.50
Forfeited	(156	)	24.72
Outstanding—end of period	677		$	17.78

Medici Ventures stock options

The Medici Ventures, Inc. ("Medici Ventures") 2017 Stock Option Plan, as amended, provides for the grant of options to employees and directors of and consultants to Medici Ventures to acquire up to approximately 9% of the authorized shares of Medici Ventures' common stock. Medici Ventures authorized 1.5 million shares, 900,000 of which are issued and outstanding to Overstock, and 130,000 of which are subject to the 2017 Stock Option Plan. The remaining 470,000 are authorized but unissued. Options vested under this plan expire at the end of ten years. During the nine months ended September 30, 2020, Medici Ventures granted 13,650 stock options with a cumulative grant date fair value of $282,000 which vest over a three-year period.

tZERO equity awards

The tZERO Group, Inc. 2017 Equity Incentive Plan, as amended, provides for grants of equity awards to employees and directors of and consultants to tZERO to acquire up to 5% of the authorized shares of tZERO's common stock. During the nine months ended September 30, 2020, tZERO granted 60,000 stock option awards with a cumulative grant date fair value of $46,000. In June 2020, tZERO completed the restructuring of its outstanding equity awards through the amendment and cancellation of each of its outstanding stock option awards in favor of the issuance of restricted stock unit awards, with each participant under its plan receiving one restricted stock unit for each stock option canceled. In addition to the original service-based vesting condition (generally three years), the restricted stock unit awards include an added performance-based vesting condition that a liquidity event must occur in order for the restricted stock unit awards to vest. The exchange was accounted for as a Type II modification with an incremental fair value of $6.9 million for the modified awards which will be expensed for the fully vested portion of the grant once the performance-based vesting condition becomes probable and the remaining fair value of the grant will be expensed on a straight-line basis over the remaining vesting period. As such, no incremental compensation cost was recognized on the modification date. The original grant date fair value of the stock option awards exchanged for restricted stock unit awards will continue to be expensed on a straight-line basis over their remaining vesting period. During the nine months ended September 30, 2020, tZERO granted 11,528,016 restricted stock awards, including 7,851,016 restricted stock unit awards related to the exchange of stock option unit awards for restricted stock awards. The incremental restricted stock unit awards granted that were not part of the exchange totaled 3,677,000 and had a cumulative grant date fair value of $3.5 million which will be expensed for the fully service-based vested portion of the grant once the performance-based vesting condition becomes probable and the remaining fair value of the grant will be expensed on a straight-line basis over the remaining service-based vesting period.

REVENUE AND CONTRACT LIABILITY

9 Months Ended

Sep. 30, 2020

REVENUE AND CONTRACT LIABILITY [Abstract]

Revenue [Policy Text Block]

14. REVENUE AND CONTRACT LIABILITY

Revenue Disaggregation

Disaggregation of revenue by major product line is included in Segment Information in Note 17—Business Segments.

Unearned Revenue

The following table provides information about unearned revenue from contracts with customers, including significant changes in unearned revenue balances during the periods presented (in thousands):



	Amount
Unearned revenue at December 31, 2018	$	50,578
Increase due to deferral of revenue at period end	36,622
Decrease due to beginning contract liabilities recognized as revenue	(45,379		)
Unearned revenue at December 31, 2019	41,821
Increase due to deferral of revenue at period end	71,200
Decrease due to beginning contract liabilities recognized as revenue	(34,264		)
Unearned revenue at September 30, 2020	$	78,757

Our total unearned revenue related to outstanding Club O Reward dollars was $8.6 million and $6.7 million at September 30, 2020 and December 31, 2019, respectively. Breakage income related to Club O Reward dollars and gift cards is recognized as a component of Retail revenue in our consolidated statements of operations. The timing of revenue recognition of these reward dollars is driven by actual customer activities, such as redemptions and expirations.

Breakage included in revenue was $1.6 million and $1.5 million for the three months ended September 30, 2020 and 2019 and $3.8 million and $3.5 million for the nine months ended September 30, 2020 and 2019.

Sales returns allowance

The following table provides additions to and deductions from the sales returns allowance (in thousands):



	Amount
Allowance for returns at December 31, 2018	$	15,261
Additions to the allowance	117,040
Deductions from the allowance	(121,194		)
Allowance for returns at December 31, 2019	11,107
Additions to the allowance	143,746
Deductions from the allowance	(136,937		)
Allowance for returns at September 30, 2020	$	17,916

NET INCOME LOSS PER SHARE

9 Months Ended

Sep. 30, 2020

Earnings Per Share [Abstract]

Earnings Per Share, Policy [Policy Text Block]

16. NET INCOME (LOSS) PER SHARE

Our Series A preferred stock, Series A-1 preferred stock, and Series B preferred stock (collectively, the "preferred shares") are considered participating securities, and as a result, net income (loss) per share is calculated using the two-class method. Under this method, we give effect to preferred dividends and then allocate remaining net income (loss) attributable to our stockholders to both common shares and participating securities (based on the percentages outstanding) in determining net income (loss) per common share.

Basic net income (loss) per common share is computed by dividing net income (loss) attributable to common shares (after allocating between common shares and participating securities) by the weighted average number of common shares outstanding during the period.

Diluted net income (loss) per share is computed by dividing net income (loss) attributable to common shares (after allocating between common shares and participating securities) by the weighted average number of common and potential common shares outstanding during the period (after allocating total dilutive shares between our common shares outstanding and our preferred shares outstanding). Potential common shares, comprising incremental common shares issuable upon the exercise of stock options, warrants, and restricted stock awards are included in the calculation of diluted net income (loss) per common share to the extent such shares are dilutive. Net income (loss) attributable to common shares is adjusted for options and restricted stock awards issued by our subsidiaries when the effect of our subsidiary's diluted earnings per share is dilutive.

The following table sets forth the computation of basic and diluted net income (loss) per common share for the periods indicated (in thousands, except per share data):



	Three months ended September 30,					Nine months ended September 30,
	2020		2019			2020		2019
Numerator:
Net income (loss) attributable to stockholders of Overstock.com, Inc.	$	23,391	$	(30,938	)	$	43,414	$	(94,863	)
Less: Preferred stock TZROP repurchase loss	—		—			—		(425		)
Less: Preferred stock dividends - declared and accumulated	179		837			376		875
Undistributed income (loss)	23,212		(31,775		)	43,038		(95,313		)
Less: Undistributed income (loss) allocated to participating securities	2,293		(428		)	2,482		(1,319		)
Net income (loss) attributable to common stockholders	$	20,919	$	(31,347	)	$	40,556	$	(93,994	)
Denominator:
Weighted average shares of common stock outstanding—basic	41,595		35,241			40,697		34,289
Effect of dilutive securities:
Stock options and restricted stock awards	607		—			333		—
Weighted average shares of common stock outstanding—diluted	42,202		35,241			41,030		34,289
Net income (loss) per share of common stock:
Basic	$	0.50	$	(0.89	)	$	1.00	$	(2.74	)
Diluted	$	0.50	$	(0.89	)	$	0.99	$	(2.74	)

The following shares were excluded from the calculation of diluted shares outstanding as their effect would have been anti-dilutive (in thousands):



	Three months ended September 30,		Nine months ended September 30,
	2020	2019	2020	2019
Stock options and restricted stock units	4	1,088	302	1,088

BUSINESS SEGMENTS

9 Months Ended

Sep. 30, 2020

Segment Reporting [Abstract]

Segment Reporting Disclosure [Text Block]

17. BUSINESS SEGMENTS

Segment information has been prepared in accordance with ASC Topic 280 Segment Reporting. We determined our segments based on how we manage our business. We allocate corporate support costs (administrative functions such as finance, human resources, and legal) to our operating segments based on their estimated usage and based on how we manage our business. We use income (loss) before income taxes as the measure to determine our reportable segments.

Our Retail segment primarily consists of amounts earned through e-commerce product sales through our Website, excluding intercompany transactions eliminated in consolidation.

Our tZERO segment primarily consists of amounts earned through securities transactions through our broker-dealers and costs incurred to execute our tZERO business initiatives, excluding intercompany transactions eliminated in consolidation.

Our MVI segment primarily consists of costs incurred to create or foster a set of products and solutions that leverage blockchain technology to generate efficiencies and increase security and control through our Medici Ventures business initiatives, excluding intercompany transactions eliminated in consolidation.

Other consists of our unallocated corporate support costs and Medici Land Governance. We deconsolidated Medici Land Governance consolidated net assets and noncontrolling interest from our consolidated financial statements beginning on February 22, 2020, the date that control ceased.

We do not allocate assets between our segments for our internal management purposes, and as such, they are not presented here. There were no significant inter-segment sales or transfers during the three and nine months ended September 30, 2020 and 2019.

The following table summarizes information about reportable segments and a reconciliation to consolidated net income (loss) (in thousands):



	Three months ended September 30,
	Retail			tZERO			MVI			Other			Total
2020
Net revenue	$	717,695		$	11,151		$	2,805		$	—		$	731,651
Cost of goods sold	548,982			9,098			2,803			—			560,883
Gross profit	168,713			2,053			2			—			170,768
Operating expenses	125,458			10,613			2,923			2,225			141,219
Interest and other expense, net (1)	(205		)	(3,848		)	(3,650		)	—			(7,703		)
Income (loss) before income taxes	$	43,050		$	(12,408	)	$	(6,571	)	$	(2,225	)	21,846
Provision for income taxes													620
Net income (2)													$	21,226

2019
Net revenue	$	340,798		$	5,662		$	639