Overtsock Stock Plunges 25% Over Trade Tariff, CFO Resignation

Shares of internet retailer Overstock.com, which made headlines in August because of its ex-CEO’s intimate relationship with a Russian spy, plummeted 25.3 percent to $11.29 in regular trading Monday.

It recovered slightly by 0.9 percent in afterhours. The stock began trading at $13.78. Shares in Overstock are down 10 percent year-to-date.

The precipitous fall in Overstock shares was triggered by the company warning its full-year retail earnings might miss previously set targets (mostly due to the impact of Trump's tariffs) and news of the resignation of CFO Greg Iverson on Sept. 17.

Overstock said the disappointing guidance was due to "increased costs from tariffs on goods manufactured in China." This factor led to weaker than expected revenues. Overstock also said waning consumer confidence slashed purchases of high-ticket items, while search traffic campaigns are taking much longer than expected to convert customers.

Overstock expects its retail business to show "modest positive adjusted EBITDA" during the fourth quarter.

"In spite of these recent headwinds, we're confident in our retail strategy," said Dave Nielsen, president of Overstock Retail. "We see positive leading indicators, including increased organic traffic, and we believe we will deliver profitable and sustainable growth for our retail business through our ongoing MarTech and Supply Chain initiatives."

Robert Hughes, a former member of Overstock senior management, will serve as acting CFO while the company searches for a permanent replacement for Iverson.

On Aug. 22, Overstock saw its shares spike 10 percent on Wall Street after CEO Patrick M. Byrne resigned due to the fallout from his intimate relationship with Russian spy Marina Butina, allegedly at the behest of the FBI.

Byrne claims the FBI encouraged him into entering into a relationship with Butina to gather intelligence as part of a “soft coup” by the “Deep State” against both Hillary Clinton and Donald Trump.

Byrne said he was approached by Butina in 2015 but later came to suspect she might be a Russian spy. Byrne contacted the FBI, which told him to continue the relationship with the Russian. He and Butina had an intimate relationship for the next three years. Butina’s lawyer confirmed Byrne’s relationship with his client.

Byrne’s participation in this plot is difficult to confirm and remains bizarre given what’s known about it.