Document and Entity Information
Document and Entity Information - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2018 | Mar. 13, 2019 | Jun. 30, 2018 | |
Document and Entity Information | |||
Entity Registrant Name | OVERSTOCK.COM, INC | ||
Entity Central Index Key | 0001130713 | ||
Document Type | 10-K | ||
Document Period End Date | Dec. 31, 2018 | ||
Amendment Flag | false | ||
Current Fiscal Year End Date | --12-31 | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Filer Category | Accelerated Filer | ||
Entity Public Float | $ 689.3 | ||
Entity Common Stock, Shares Outstanding | 32,252,029 | ||
Document Fiscal Year Focus | 2018 | ||
Document Fiscal Period Focus | FY |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Current assets: | ||
Cash and cash equivalents | $ 141,512 | $ 203,215 |
Restricted cash | 1,302 | 455 |
Accounts receivable, net | 35,930 | 30,080 |
Inventories, net | 14,108 | 13,703 |
Prepaids and other current assets | 22,415 | 17,744 |
Total current assets | 215,267 | 265,197 |
Fixed assets, net | 134,687 | 129,343 |
Deferred tax assets, net | 109 | 0 |
Intangible assets, net | 13,370 | 7,337 |
Goodwill | 22,895 | 14,698 |
Equity investments | 60,427 | 13,024 |
Other long-term assets, net | 14,464 | 4,216 |
Total assets | 461,219 | 433,815 |
Current liabilities: | ||
Accounts payable | 102,574 | 85,406 |
Accrued liabilities | 87,858 | 82,611 |
Deferred revenue | 50,578 | 46,468 |
Other current liabilities, net | 476 | 178 |
Total current liabilities | 241,486 | 214,663 |
Long-term debt, net | 3,069 | 0 |
Long-term debt, net - related party | 0 | 39,909 |
Other long-term liabilities | 5,958 | 7,120 |
Total liabilities | 250,513 | 261,692 |
Stockholders' equity: | ||
Common stock, $0.0001 par value: Authorized shares - 100,000; Issued shares - 35,346 and 30,632; Outstanding shares - 32,146 and 27,497 | 3 | 3 |
Additional paid-in capital | 657,981 | 494,732 |
Accumulated deficit | (458,897) | (254,692) |
Accumulated other comprehensive loss | (584) | (599) |
Shares at cost - 3,200 and 3,135 | (66,757) | (63,816) |
Equity attributable to stockholders of Overstock.com, Inc. | 131,746 | 175,628 |
Equity attributable to noncontrolling interests | 78,960 | (3,505) |
Total stockholders' equity | 210,706 | 172,123 |
Total liabilities and stockholders' equity | 461,219 | 433,815 |
Series A | ||
Stockholders' equity: | ||
Preferred stock, $0.0001 par value: Authorized shares - 5,000; Series A, issued and outstanding shares - 127 and 127; Series B, issued and outstanding - 355 and 555 | 0 | 0 |
Series B | ||
Stockholders' equity: | ||
Preferred stock, $0.0001 par value: Authorized shares - 5,000; Series A, issued and outstanding shares - 127 and 127; Series B, issued and outstanding - 355 and 555 | $ 0 | $ 0 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - $ / shares | Dec. 31, 2018 | Dec. 31, 2017 |
Preferred stock, par value (in dollars 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 | 35,346,000 | 30,632,000 |
Common stock, shares outstanding | 32,146,000 | 27,497,000 |
Treasury stock, shares | 3,200,000 | 3,135,000 |
Series A | ||
Preferred stock, shares issued | 127,000 | 127,000 |
Preferred stock, shares outstanding | 127,000 | 127,000 |
Series B | ||
Preferred stock, shares issued | 355,000 | 555,000 |
Preferred stock, shares outstanding | 355,000 | 555,000 |
Consolidated Statements of Oper
Consolidated Statements of Operations - USD ($) shares in Thousands, $ in Thousands | 12 Months Ended | |||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | ||
Revenue, net | ||||
Total net revenue | $ 1,821,592 | $ 1,744,756 | $ 1,799,963 | |
Cost of goods sold | ||||
Total cost of goods sold | 1,467,684 | 1,404,205 | 1,468,614 | |
Gross profit | 353,908 | 340,551 | 331,349 | |
Operating expenses: | ||||
Sales and marketing | [1] | 274,479 | 180,589 | 147,896 |
Technology | [1] | 132,154 | 115,878 | 106,760 |
General and administrative | [1] | 164,481 | 90,718 | 89,298 |
Litigation settlement | 0 | 0 | (19,520) | |
Total operating expenses | 571,114 | 387,185 | 324,434 | |
Operating income (loss) | (217,206) | (46,634) | 6,915 | |
Interest income | 2,208 | 659 | 326 | |
Interest expense | (1,468) | (2,937) | (877) | |
Other income (loss), net | (3,488) | 1,178 | 14,181 | |
Income (loss) before income taxes | (219,954) | (47,734) | 20,545 | |
Provision (benefit) for income taxes | (2,384) | 64,188 | 9,297 | |
Consolidated net income (loss) | (217,570) | (111,922) | 11,248 | |
Less: Net loss attributable to noncontrolling interests | (11,500) | (2,044) | (1,274) | |
Net income (loss) attributable to stockholders of Overstock.com, Inc. | $ (206,070) | $ (109,878) | $ 12,522 | |
Net income (loss) per common share—basic: | ||||
Net income (loss) attributable to common shares-basic (in dollars per share) | $ (6.83) | $ (4.28) | $ 0.49 | |
Weighted average common shares outstanding-basic (in shares) | 29,976 | 25,044 | 25,342 | |
Net income (loss) per common share—diluted: | ||||
Net income (loss) attributable to common shares-diluted (in dollars per share) | $ (6.83) | $ (4.28) | $ 0.49 | |
Weighted average common shares outstanding-diluted (in shares) | 29,976 | 25,044 | 25,426 | |
Retail | ||||
Revenue, net | ||||
Total net revenue | $ 1,800,187 | $ 1,728,104 | $ 1,784,782 | |
Cost of goods sold | ||||
Total cost of goods sold | [1] | 1,452,195 | 1,392,558 | 1,458,411 |
Other | ||||
Revenue, net | ||||
Total net revenue | 21,405 | 16,652 | 15,181 | |
Cost of goods sold | ||||
Total cost of goods sold | $ 15,489 | $ 11,647 | $ 10,203 | |
[1] | (1) Includes stock-based compensation as follows (Note 15): Cost of goods sold — retail $201 $183 $266 Sales and marketing 1,728 415 249 Technology 2,066 649 777 General and administrative 10,361 2,830 3,599 Total $14,356 $4,077 $4,891 |
Consolidated Statements of Op_2
Consolidated Statements of Operations (Parenthetical) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Total stock-based compensation | $ 14,356 | $ 4,077 | $ 4,891 |
Cost of goods sold — retail | |||
Total stock-based compensation | 201 | 183 | 266 |
Sales and marketing | |||
Total stock-based compensation | 1,728 | 415 | 249 |
Technology | |||
Total stock-based compensation | 2,066 | 649 | 777 |
General and administrative | |||
Total stock-based compensation | $ 10,361 | $ 2,830 | $ 3,599 |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Income (Loss) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Statement of Comprehensive Income [Abstract] | |||
Consolidated net income (loss) | $ (217,570) | $ (111,922) | $ 11,248 |
Unrealized gain (loss) on cash flow hedges, net of benefit (expense) for taxes of $0, $(689), and $(211) | 15 | 941 | (110) |
Other comprehensive income (loss) | 15 | 941 | (110) |
Comprehensive income (loss) | (217,555) | (110,981) | 11,138 |
Less: Comprehensive loss attributable to noncontrolling interests | (11,500) | (2,044) | (1,274) |
Comprehensive income (loss) attributable to stockholders of Overstock.com, Inc. | $ (206,055) | $ (108,937) | $ 12,412 |
Consolidated Statements of Co_2
Consolidated Statements of Comprehensive Income (Loss) (Parenthetical) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Statement of Comprehensive Income [Abstract] | |||
Unrealized gain (loss) on cash flow hedges, tax | $ 0 | $ (689) | $ (211) |
Consolidated Statements of Chan
Consolidated Statements of Changes in Stockholders' Equity - USD ($) shares in Thousands, $ in Thousands | Total | Common stock | Treasury stock | Preferred stock | Preferred stockSeries A | Preferred stockSeries B | Additional paid-in capital | Accumulated deficit | Accumulated other comprehensive loss | Parent | Noncontrolling interest |
Beginning balance (in shares) at Dec. 31, 2015 | 27,634 | 2,400 | 0 | 0 | |||||||
Beginning balance at Dec. 31, 2015 | $ (51,747) | $ 370,047 | $ (166,420) | $ (1,430) | $ (1,092) | ||||||
Increase (Decrease) in Stockholders' Equity | |||||||||||
Common stock issued upon vesting of restricted stock (in shares) | 219 | ||||||||||
Common stock issued for asset purchase (in shares) | 0 | ||||||||||
Exercise of stock options (in shares) | 42 | ||||||||||
Exercise of stock warrants (in shares) | 0 | ||||||||||
Rights offering (in shares) | 0 | 127 | 569 | ||||||||
Other (in shares) | 0 | 0 | |||||||||
Tax withholding upon vesting of restricted stock (in shares) | 63 | ||||||||||
Purchase of treasury stock (in shares) | 0 | ||||||||||
Stock-based compensation to employees and directors | 4,891 | ||||||||||
Common stock issued for asset purchase | 0 | ||||||||||
Exercise of stock options | 819 | ||||||||||
Exercise of stock warrants | 0 | ||||||||||
Common stock sold through ATM offering, net | $ 0 | 0 | |||||||||
Issuance of stock warrants | 0 | ||||||||||
Rights offering | 7,591 | ||||||||||
Other | 0 | 0 | |||||||||
Cumulative effect of change in accounting principle | 0 | ||||||||||
Net income (loss) attributable to stockholders of Overstock.com, Inc. | 12,522 | 12,522 | |||||||||
Declaration and payment of preferred dividends | 0 | ||||||||||
Net other comprehensive income (loss) | (110) | (110) | |||||||||
Tax withholding upon vesting of restricted stock | $ (840) | 0 | |||||||||
Purchase of treasury stock | $ 0 | ||||||||||
Proceeds from security token offering, net | 0 | ||||||||||
Stock-based compensation to employees and directors | 0 | ||||||||||
Paid in capital for noncontrolling interest | 0 | ||||||||||
Fair value of noncontrolling interest at acquisition | 0 | ||||||||||
Net loss attributable to noncontrolling interests | $ 1,274 | (1,274) | |||||||||
Equity attributable to noncontrolling interests, other | 0 | ||||||||||
Ending balance (in shares) at Dec. 31, 2016 | 25,432 | 27,895 | 2,463 | 127 | 569 | ||||||
Ending balance at Dec. 31, 2016 | $ 172,960 | $ (52,587) | $ 0 | 383,348 | (153,898) | (1,540) | $ 175,326 | (2,366) | |||
Increase (Decrease) in Stockholders' Equity | |||||||||||
Common stock (in shares) | $ 3 | ||||||||||
Common stock issued upon vesting of restricted stock (in shares) | 212 | ||||||||||
Common stock issued for asset purchase (in shares) | 0 | ||||||||||
Exercise of stock options (in shares) | 39 | ||||||||||
Exercise of stock warrants (in shares) | 2,472 | ||||||||||
Rights offering (in shares) | 0 | 0 | 0 | ||||||||
Other (in shares) | 14 | (14) | |||||||||
Tax withholding upon vesting of restricted stock (in shares) | 68 | ||||||||||
Purchase of treasury stock (in shares) | 604 | ||||||||||
Stock-based compensation to employees and directors | 4,077 | ||||||||||
Common stock issued for asset purchase | 0 | ||||||||||
Exercise of stock options | 664 | ||||||||||
Exercise of stock warrants | 100,000 | ||||||||||
Common stock sold through ATM offering, net | 0 | 0 | |||||||||
Issuance of stock warrants | 6,462 | ||||||||||
Rights offering | 0 | ||||||||||
Other | 181 | (181) | |||||||||
Cumulative effect of change in accounting principle | 9,374 | ||||||||||
Net income (loss) attributable to stockholders of Overstock.com, Inc. | (109,878) | (109,878) | |||||||||
Declaration and payment of preferred dividends | (109) | ||||||||||
Net other comprehensive income (loss) | 941 | 941 | |||||||||
Tax withholding upon vesting of restricted stock | $ (1,229) | 0 | |||||||||
Purchase of treasury stock | $ (10,000) | ||||||||||
Proceeds from security token offering, net | 905 | ||||||||||
Stock-based compensation to employees and directors | 0 | ||||||||||
Paid in capital for noncontrolling interest | 0 | ||||||||||
Fair value of noncontrolling interest at acquisition | 0 | ||||||||||
Net loss attributable to noncontrolling interests | $ 2,044 | (2,044) | |||||||||
Equity attributable to noncontrolling interests, other | 0 | ||||||||||
Ending balance (in shares) at Dec. 31, 2017 | 27,497 | 30,632 | 3,135 | 127 | 555 | ||||||
Ending balance at Dec. 31, 2017 | $ 172,123 | $ (63,816) | 0 | 494,732 | (254,692) | (599) | 175,628 | (3,505) | |||
Increase (Decrease) in Stockholders' Equity | |||||||||||
Common stock (in shares) | 3 | $ 3 | |||||||||
Common stock issued upon vesting of restricted stock (in shares) | 234 | ||||||||||
Common stock issued for asset purchase (in shares) | 147 | ||||||||||
Exercise of stock options (in shares) | 0 | ||||||||||
Exercise of stock warrants (in shares) | 1,250 | ||||||||||
Rights offering (in shares) | 2,883 | 0 | 0 | ||||||||
Other (in shares) | 200 | (200) | |||||||||
Tax withholding upon vesting of restricted stock (in shares) | 65 | ||||||||||
Purchase of treasury stock (in shares) | 0 | ||||||||||
Stock-based compensation to employees and directors | 10,316 | ||||||||||
Common stock issued for asset purchase | 4,430 | ||||||||||
Exercise of stock options | 0 | ||||||||||
Exercise of stock warrants | 50,562 | ||||||||||
Common stock sold through ATM offering, net | 94,554 | 94,554 | |||||||||
Issuance of stock warrants | 26 | ||||||||||
Rights offering | 0 | ||||||||||
Other | 3,361 | (3,098) | |||||||||
Cumulative effect of change in accounting principle | 5,040 | ||||||||||
Net income (loss) attributable to stockholders of Overstock.com, Inc. | (206,070) | (206,070) | |||||||||
Declaration and payment of preferred dividends | (77) | ||||||||||
Net other comprehensive income (loss) | 15 | 15 | |||||||||
Tax withholding upon vesting of restricted stock | $ (2,941) | (1,681) | |||||||||
Purchase of treasury stock | $ 0 | ||||||||||
Proceeds from security token offering, net | 82,354 | ||||||||||
Stock-based compensation to employees and directors | 4,040 | ||||||||||
Paid in capital for noncontrolling interest | 5,932 | ||||||||||
Fair value of noncontrolling interest at acquisition | 4,468 | ||||||||||
Net loss attributable to noncontrolling interests | $ 11,500 | (11,500) | |||||||||
Equity attributable to noncontrolling interests, other | (1,148) | ||||||||||
Ending balance (in shares) at Dec. 31, 2018 | 32,146 | 35,346 | 3,200 | 127 | 355 | ||||||
Ending balance at Dec. 31, 2018 | $ 210,706 | $ (66,757) | $ 0 | $ 657,981 | $ (458,897) | $ (584) | $ 131,746 | $ 78,960 | |||
Increase (Decrease) in Stockholders' Equity | |||||||||||
Common stock (in shares) | $ 3 | $ 3 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Statement of Cash Flows [Abstract] | |||
Consolidated net income (loss) | $ (217,570,000) | $ (111,922,000) | $ 11,248,000 |
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities: | |||
Depreciation of fixed assets | 26,411,000 | 28,848,000 | 27,283,000 |
Amortization of intangible assets | 5,286,000 | 3,999,000 | 3,968,000 |
Stock-based compensation to employees and directors | 14,356,000 | 4,077,000 | 4,891,000 |
Deferred income taxes, net | (2,386,000) | 65,199,000 | 7,719,000 |
Gain on investment in precious metals | 0 | (1,971,000) | (201,000) |
Gain on sale of cryptocurrencies | (8,370,000) | (1,995,000) | 0 |
Impairment of cryptocurrencies | 10,463,000 | 0 | 0 |
Loss on equity investments, net | 2,828,000 | 5,995,000 | 2,850,000 |
Loss on disposal of business and other asset abandonments | 3,565,000 | 0 | 0 |
Impairment on indefinite-lived intangible assets | 6,000,000 | 0 | 0 |
Early extinguishment costs of long-term debts | 283,000 | 2,464,000 | 0 |
Other | 711,000 | 368,000 | 356,000 |
Changes in operating assets and liabilities, net of acquisitions: | |||
Accounts receivable, net | (5,558,000) | (1,938,000) | (10,006,000) |
Inventories, net | 628,000 | 5,234,000 | 1,105,000 |
Prepaids and other current assets | (3,622,000) | (2,799,000) | 1,588,000 |
Other long-term assets, net | (2,870,000) | (2,307,000) | (786,000) |
Accounts payable | 16,499,000 | (20,995,000) | (18,823,000) |
Accrued liabilities | 5,661,000 | (12,311,000) | 16,936,000 |
Deferred revenue | 9,150,000 | 4,688,000 | (9,164,000) |
Other long-term liabilities | (399,000) | 145,000 | 600,000 |
Net cash provided by (used in) operating activities | (138,934,000) | (35,221,000) | 39,564,000 |
Cash flows from investing activities: | |||
Proceeds from sale of precious metals | 0 | 11,917,000 | 1,610,000 |
Investment in precious metals | 0 | 0 | (1,633,000) |
Purchase of intangible assets | (9,597,000) | (423,000) | 0 |
Investment in equity securities | (48,731,000) | (5,188,000) | (4,750,000) |
Disbursement of note receivable | (3,059,000) | (750,000) | (3,668,000) |
Acquisitions of businesses, net of cash acquired | (12,912,000) | 0 | 1,248,000 |
Deposit on purchase of a business | (8,000,000) | 0 | 0 |
Expenditures for fixed assets, including internal-use software and website development | (28,680,000) | (23,586,000) | (72,281,000) |
Other | 56,000 | 70,000 | 27,000 |
Net cash used in investing activities | (110,923,000) | (17,960,000) | (79,447,000) |
Cash flows from financing activities: | |||
Payments on capital lease obligations | (496,000) | (83,000) | 0 |
Paydown on direct financing arrangement | 0 | 0 | (54,000) |
Payments on finance obligations | 0 | (15,316,000) | (1,906,000) |
Payments on interest swap | 0 | (1,535,000) | (563,000) |
Proceeds from finance obligations | 0 | 0 | 11,399,000 |
Payments on long-term debt | (40,000,000) | (45,766,000) | 0 |
Proceeds from long-term debt | 0 | 40,000,000 | 36,273,000 |
Payments of preferred dividends | (77,000) | (109,000) | 0 |
Proceeds from issuance and exercise of stock warrants | 50,588,000 | 106,462,000 | 0 |
Proceeds from exercise of stock options | 0 | 664,000 | 819,000 |
Proceeds from rights offering, net of offering costs | 0 | 0 | 7,591,000 |
Proceeds from security token offering, net of offering costs and withdrawals | 82,354,000 | 905,000 | 0 |
Proceeds from sale of common stock, net of offering costs | 94,554,000 | 0 | 0 |
Paid in capital for noncontrolling interest | 6,700,000 | 0 | 0 |
Purchase of treasury stock | 0 | (10,000,000) | 0 |
Payments of taxes withheld upon vesting of restricted stock | (4,622,000) | (1,229,000) | (840,000) |
Payment of debt issuance costs | 0 | (670,000) | 0 |
Net cash provided by financing activities | 189,001,000 | 73,323,000 | 52,719,000 |
Net increase (decrease) in cash and cash equivalents | (60,856,000) | 20,142,000 | 12,836,000 |
Cash, cash equivalents and restricted cash, beginning of year | 203,670,000 | 183,528,000 | 170,692,000 |
Cash, cash equivalents and restricted cash, end of year | 142,814,000 | 203,670,000 | 183,528,000 |
Cash paid during the period: | |||
Interest paid, net of amounts capitalized | 1,319,000 | 2,940,000 | 1,269,000 |
Income taxes paid (refunded), net | (726,000) | 487,000 | 1,338,000 |
Non-cash investing and financing activities: | |||
Fixed assets, including internal-use software and website development costs, financed through accounts payable and accrued liabilities | 139,000 | 989,000 | 2,219,000 |
Equipment acquired under capital lease obligations | 0 | 1,421,000 | 0 |
Capitalized interest cost | 0 | 0 | 105,000 |
Acquisition of assets through stock issuance | 4,430,000 | 0 | 0 |
Change in fair value of cash flow hedge | 0 | (1,738,000) | (659,000) |
Note receivable converted to equity investment | $ 200,000 | $ 1,368,000 | $ 2,850,000 |
BASIS OF PRESENTATION
BASIS OF PRESENTATION | 12 Months Ended |
Dec. 31, 2018 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
BASIS OF PRESENTATION | BASIS OF PRESENTATION Business and organization As used herein, "Overstock," "Overstock.com," "O.co," "we," "our" and similar terms include Overstock.com, Inc. and our majority-owned subsidiaries, unless the context indicates otherwise. We were formed on May 5, 1997 as D2-Discounts Direct, a limited liability company. On December 30, 1998, we were reorganized as a C Corporation in the State of Utah and reincorporated in Delaware in May 2002. On October 25, 1999, we changed our name to Overstock.com, Inc. We are an online retailer and advancer of blockchain technology. Through our online retail business, we offer a broad range of price-competitive products, including furniture, home decor, bedding and bath, and housewares, among other products. We sell our products and services through our Internet websites located at www.overstock.com, www.o.co and www.o.biz (referred to collectively as the "Website"). Although our three websites are located at different domain addresses, the technology, equipment, and processes supporting the Website and the process of order fulfillment described herein are the same for all three websites. In late 2014, we began working on initiatives to develop and advance blockchain technology, which initiatives we refer to collectively as Medici. Our Medici business initiatives seek to leverage the security, transparency and immutability of cryptographically protected and distributed ledgers, such as blockchains, and are focused on solving important problems, including financial transaction issues, particularly in the area of securities settlement. Our Medici business initiatives include our wholly-owned subsidiary, Medici Ventures, Inc. ("Medici Ventures"), which conducts a majority of its business through its majority-owned subsidiary tZERO Group, Inc. ("tZERO"), formerly tØ.com, Inc., a financial technology company pursuing potential financial applications of blockchain technologies as well as non-blockchain businesses. Medici Ventures currently holds equity interests in several technology companies whose focuses include commercial blockchain applications for identity and social media, property and land, money and banking, capital markets, supply chain, and voting. In December 2017 we engaged Guggenheim Securities, LLC to help us identify and evaluate certain strategic initiatives. We are considering a range of potential transactions, including a sale of our retail business and additional equity or debt financings. Our Board continually discusses a variety of potential strategic and financial options and other changes to our business, but has not approved or made any determination to consummate any strategic transaction, and may choose not to do so in the foreseeable future or at all. Basis of presentation We have prepared the accompanying consolidated financial statements pursuant to generally accepted accounting principles in the United States ("GAAP"). Preparing financial statements requires us to make estimates and assumptions that affect the amounts that are reported in the consolidated financial statements and accompanying disclosures. Although these estimates are based on our best knowledge of current events and actions that we may undertake in the future, our actual results may be different from our estimates. The results of operations presented herein are not necessarily indicative of our results for any future period. In the fourth quarter of 2018, we completed our annual review of our segment reporting and in light of a strategic shift in our Chief Operating Decision Maker's long-term strategic focus for our organization, we no longer consider the split of retail direct and retail partner as a distinct and relevant measure of our business. Accordingly, revenues and cost of goods sold recorded in "Direct" and "Partner and Other" are now split between "Retail" and "Other" on the consolidated statements of operations. "Retail" includes retail revenue and costs of goods sold from both "Direct" and "Partner" transactions. Our revenues and costs of goods sold related to our Medici business remains in "Other". In addition, we have recast the prior period revenues and cost of goods sold to conform with current year presentation. Direct and Partner are no longer considered separate reportable segments in our Business Segment disclosures. In addition, tZERO has been identified as a reportable segment separate from Other. For purposes of comparability, we reclassified other certain immaterial amounts in the prior periods presented to conform with the current year presentation. We also retrospectively applied certain accounting standard updates as discussed in Note 2—Accounting Policies, Recently adopted accounting standards . |
ACCOUNTING POLICIES
ACCOUNTING POLICIES | 12 Months Ended |
Dec. 31, 2018 | |
Accounting Policies [Abstract] | |
ACCOUNTING POLICIES | ACCOUNTING POLICIES Principles of consolidation The accompanying consolidated financial statements include our accounts and the accounts of our wholly-owned subsidiaries and subsidiaries for which we exercise control. All intercompany account balances and transactions have been eliminated in consolidation. The financial results of Verify Investor, LLC have been included in our consolidated financial statements from the date of acquisition on February 12, 2018. The financial results of Mac Warehouse, LLC have been included in our consolidated financial statements from the date of acquisition on June 25, 2018. Use of estimates The preparation of financial statements in conformity with generally accepted accounting principles 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, incentive discount offers, inventory valuation, depreciable lives of fixed assets and internally-developed software, goodwill valuation, intangible asset valuation, equity investment valuation, income taxes, stock-based compensation, performance-based compensation, self-funded health insurance liabilities, and contingencies. Although these estimates are based on our best knowledge of current events and actions that we may undertake in the future, actual results could differ materially from these estimates. Cash equivalents We classify all highly liquid instruments, including instruments with a remaining maturity of three months or less at the time of purchase, as cash equivalents. Cash equivalents were $3.1 million and $25.5 million at December 31, 2018 and 2017 , respectively. Restricted cash We consider cash that is legally restricted and cash that is held as compensating balances for credit arrangements as restricted cash. Fair value of financial instruments We account for our assets and liabilities using a hierarchy of valuation techniques based on whether the inputs to those valuation techniques are observable or unobservable. Observable inputs reflect market data obtained from independent sources, while unobservable inputs reflect our market assumptions. These two types of inputs have created the fair-value hierarchy below. This hierarchy requires us to minimize the use of unobservable inputs and to use observable market data, if available, when determining 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 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 December 31, 2018 and 2017 , as indicated (in thousands): Fair Value Measurements at December 31, 2018: Total Level 1 Level 2 Level 3 Assets: Cash equivalents - Money market mutual funds $ 3,135 $ 3,135 $ — $ — Investment in equity securities, at fair value 2,636 2,636 — — Trading securities held in a "rabbi trust" (1) 84 84 — — Total assets $ 5,855 $ 5,855 $ — $ — Liabilities: Deferred compensation accrual "rabbi trust" (2) $ 85 $ 85 $ — $ — Total liabilities $ 85 $ 85 $ — $ — Fair Value Measurements at December 31, 2017: Total Level 1 Level 2 Level 3 Assets: Cash equivalents - Money market mutual funds $ 25,455 $ 25,455 $ — $ — Trading securities held in a "rabbi trust" (1) 74 74 — — Total assets $ 25,529 $ 25,529 $ — $ — Liabilities: Deferred compensation accrual "rabbi trust" (2) 92 92 — — Total liabilities $ 92 $ 92 $ — $ — ___________________________________________ (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. Accounts receivable, net Accounts receivable consist primarily of carrier rebates, trade amounts due from customers in the United States, and uncleared credit card transactions at period end. Accounts receivable are recorded at invoiced amounts and do not bear interest. From time to time, we grant credit to some of our business customers on normal credit terms (typically 30 days). We maintain an allowance for doubtful accounts receivable based upon our business customers' financial condition and payment history, and our historical collection experience and expected collectability of accounts receivable. The allowance for doubtful accounts receivable was $2.1 million and $1.3 million at December 31, 2018 and 2017 , respectively. Concentration of credit risk At December 31, 2018 and 2017 , one and two banks held the majority of our cash and cash equivalents. Our cash equivalents primarily consist of money market securities which are uninsured. We do not believe that, as a result of this concentration, we are subject to any unusual financial risk beyond the normal risk associated with commercial banking relationships. Inventories, net Inventories, net include merchandise purchased for resale which are accounted for using a standard costing system which approximates the first-in-first-out ("FIFO") method of accounting, and are valued at the lower of cost and net realizable value. Inventory valuation requires us to make judgments, based on currently available information, about the likely method of disposition, such as through sales to individual customers, returns to product vendors, liquidations, and expected recoverable values of each disposition category. Prepaids and other current assets Prepaids and other current assets represent expenses paid prior to receipt of the related goods or services, including advertising, license fees, maintenance, packaging, insurance, prepaid inventories, other miscellaneous costs, and cryptocurrency-denominated assets ("cryptocurrencies"). See Cryptocurrencies below. Cryptocurrencies We hold cryptocurrency-denominated assets ("cryptocurrencies") such as bitcoin and we include them in Prepaids and other current assets in our consolidated balance sheets. Our cryptocurrencies were $2.4 million and $1.5 million at December 31, 2018 and 2017 , respectively, and are recorded at cost less impairment. We recognize impairment on these assets caused by decreases in market value, determined by taking quoted prices from various digital currency exchanges with active markets, whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. See Fair value of financial instruments above. Such impairment in the value of our cryptocurrencies is recorded in General and administrative expense in our consolidated statements of operations. Impairments on cryptocurrencies were $10.5 million for the year ended December 31, 2018 . There was no impairment on cryptocurrencies during the years ended December 31, 2017 and 2016 . Gains and losses realized upon sale of cryptocurrencies are also recorded in General and administrative expense in our consolidated statements of operations. We occasionally use our cryptocurrencies to purchase other cryptocurrencies. Gains and losses realized with these non-cash transactions are also recorded in General and administrative expense in our consolidated statements of operations. These non-cash transactions as well as gains (losses) from cryptocurrencies received through our tZERO security token offering are also presented as an adjustment to reconcile Consolidated net income (loss) to Net cash provided by (used in) operating activities in our consolidated statements of cash flows. Further, the proceeds from the sale of cryptocurrencies received through our tZERO security token offering are presented as a financing activity in our consolidated statements of cash flows due to its near immediate conversion into cash and its economic similarity to the receipt of cash proceeds under the tZERO security token offering. Realized gains on sale of cryptocurrencies were $8.4 million for the year ended December 31, 2018 . There were no realized gains (losses) on sale of cryptocurrencies for the years ended December 31, 2017 and 2016 . Fixed assets, net Fixed assets are recorded at cost and stated net of depreciation and amortization. Fixed assets are depreciated using the straight-line method over the estimated useful lives of the related assets or the term of the related capital lease, whichever is shorter, as follows: Life (years) Building 40 Land improvements 20 Building machinery and equipment 15-20 Furniture and equipment 5-7 Computer hardware 3-4 Computer software, including internal-use software and website development 2-4 Leasehold improvements are amortized over the shorter of the term of the related leases or estimated useful lives. Included in fixed assets is the capitalized cost of internal-use software and website development, including software used to upgrade and enhance our Website and processes supporting our business. We capitalize costs incurred during the application development stage of internal-use software and amortize these costs over the estimated useful life. Costs incurred related to design or maintenance of internal-use software are expensed as incurred. During the years ended December 31, 2018 , 2017 , and 2016 , we capitalized $19.3 million , $9.6 million , and $15.9 million , respectively, of costs associated with internal-use software and website development, both developed internally and acquired externally. Depreciation of internal-use software and website development for the years ended December 31, 2018 , 2017 , and 2016 was $13.8 million , $15.9 million , and $17.1 million , respectively. Depreciation expense is classified within the corresponding operating expense categories in the consolidated statements of operations as follows (in thousands): Year ended 2018 2017 2016 Cost of goods sold - retail $ 354 $ 307 $ 310 Technology 21,894 24,604 25,693 Sales and marketing — — 124 General and administrative 4,163 3,937 1,156 Total depreciation, including internal-use software and website development $ 26,411 $ 28,848 $ 27,283 Upon sale or retirement of assets, cost and related accumulated depreciation and amortization are removed from the balance sheet and the resulting gain or loss is reflected in our consolidated statements of operations. Equity investments under ASC 321 At December 31, 2018 , we held minority interests (less than 20%) in fourteen privately held entities, accounted for under ASC Topic 321, Investments - Equity Securities ("ASC 321"), which are included in Equity investments in our consolidated balance sheets. One of these equity investments, which had a carrying value of $2.6 million at December 31, 2018 , is carried at fair value based on Level 1 inputs. See Fair value of financial instruments above. The remaining equity investments lack readily determinable fair values and therefore the investments 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. Dividends received are reported in earnings if and when received. We review our investments individually for impairment by evaluating if events or circumstances have occurred that may indicate the fair value of the investment is less than its carrying value. If such events or circumstances have occurred, we estimate the fair value of the investment and recognize an impairment loss equal to the difference between the fair value of the investment and its carrying value. In such cases, the estimated fair value of the investment is determined using unobservable inputs including assumptions by the investee's management including quantitative information such as lower valuations in recently completed or proposed financings. These inputs are classified as Level 3. Because several of our investees are in the early startup or development stages, these entities are subject to potential changes in cash flows, valuation, and inability to attract new investors which may be necessary for the liquidity needed to support their operations. The carrying amount of our investments under ASC 321 was approximately $20.3 million and $6.5 million at December 31, 2018 and 2017 , respectively. We recognized unrealized gains of $1.1 million during the year ended December 31, 2018 and no unrealized gains on investments carried at fair value during the years ended December 31, 2017 and 2016 , respectively. We recognized $511,000 , $5.5 million and $2.9 million impairment loss on these investments during the years ended December 31, 2018 , 2017 and 2016 , respectively. Unrealized gains and impairment losses on our investments are recorded in Other income (expense), net on our consolidated statements of operations. Equity method investments under ASC 323 At December 31, 2018 , we held minority interests in privately held entities, accounted for as equity method investments under ASC Topic 323, Investments - Equity Method and Joint Ventures ("ASC 323"), which are included in Equity investments in our consolidated balance sheets. We can exercise significant influence, but not control, over the investees 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 investments and related ownership interest as of December 31, 2018 : Ownership interest Bitt Inc. 21% Spera, Inc. 19% Voatz, Inc. 13% SettleMint NV 30% Bitsy, Inc. 33% Chainstone Labs, Inc. 29% Minds, Inc. 24% VinX Network Ltd. 21% GrainChain, Inc. 10% StockCross Financial Services, Inc. 24% Boston Security Token Exchange LLC 50% Based on the nature of our ownership interests and the extent of our contributed capital, we have variable interests in certain of these entities. However, we have insufficient voting rights or other means to influence the investee such that we do not have power to direct the investee's activities that most significantly impact the economic performance of each entity. Further, we are not the investee's primary beneficiary and we therefore do not consolidate the investee in our financial statements. Our investments, plus any loans, off-balance sheet commitments, and other subordinated financial support related to these variable interest entities totaled $25.9 million and $3.7 million as of December 31, 2018 and 2017, respectively, representing our maximum exposures to loss. The carrying amount of our equity method investments was approximately $40.1 million and $6.5 million at December 31, 2018 and 2017 , respectively. The carrying value of our equity method investments exceeded the amount of the underlying equity in net assets of the investees and the difference was primarily related to goodwill and the fair value of intangible assets. The basis difference attributable to amortizable intangible assets is amortized over their estimated useful lives. We record our proportionate share of the net income or loss of the investee and the amortization of the basis difference related to intangible assets in Other income (expense), net in our consolidated statements of operations with corresponding adjustments to the carrying value of the investment. Our proportionate share of the net losses of our equity method investees and amortization of the basis difference for the years ended December 31, 2018 , 2017 and 2016 was $3.9 million , $0.5 million , and zero , respectively, and recognized in Other income (expense), net in our consolidated statements of operations. Noncontrolling interests Our wholly-owned subsidiary, Medici Ventures, Inc. ("Medici Ventures"), conducts its primary business through its majority-owned subsidiary, tZERO Group, Inc. ("tZERO"), formerly tØ.com, Inc., which includes a financial technology company, two related registered broker dealers, an accredited investor verification company, and certain strategic interests in other entities which support or align with tZERO's objectives and strategies. Medici Ventures, tZERO, and their respective consolidated subsidiaries are included in our consolidated financial statements. Intercompany transactions have been eliminated and the amounts of contributions and gains or losses that are attributable to the noncontrolling interests are disclosed in our consolidated financial statements. On December 18, 2017, tZERO launched an offering (the "security token offering") of the right to acquire tZERO Preferred Equity Tokens (the "tZERO Security Token") through a Simple Agreement for Future Equity ("SAFE"). The security token offering closed on August 6, 2018, and on October 12, 2018 tZERO issued the tZERO Security Tokens in settlement of the SAFEs. tZERO Security Token holders have the right to, prior to distributing earnings to tZERO common shareholders, a noncumulative dividend equal to 10% of tZERO's consolidated Adjusted Gross Revenue (as defined by the security token offering documents) for the most recently completed fiscal quarter , if declared by tZERO's Board of Directors, to be paid out of funds lawfully available on a quarterly basis. tZERO Security Token holders are not entitled to participate in any dividends paid to the holders of tZERO's common stock, have no rights to vote, and have no rights to the undistributed earnings of tZERO and are not entitled to any utility functionality as part of the tZERO Security Tokens. Any remaining undistributed earnings or losses of tZERO for a period shall be allocated to the noncontrolling interest held by the tZERO Security Token holders based on the contractual participation rights of the security to share in those earnings as if all the earnings for the period had been distributed. In the event of any liquidation, dissolution or winding up of tZERO, the tZERO Security Token holders will be entitled to the limited preferential liquidation rights equal to USD $0.10 per token to the extent funds are available . At December 31, 2018 , cumulative proceeds since December 18, 2017, net of withdrawals, from the security token offering totaling $104.8 million have been classified as a component of noncontrolling interest within our consolidated financial statements. Withdrawals during the security token offering period were $22.0 million . As of December 31, 2018 , tZERO incurred $21.5 million of offering costs associated with the security token offering that are classified as a reduction in proceeds within noncontrolling interest of our consolidated financial statements. During the first quarter of 2018, tZERO purchased 65.8% of ES Capital Advisors, LLC ("ES Capital"), a registered investment advisor under the Investment Advisers Act of 1940, which was accounted for as an asset acquisition. tZERO operated the ES Capital business under the name tZERO Advisors and offered automated investment advisory services on our Website. tZERO subsequently sold its equity interest in ES Capital during the fourth quarter of 2018. tZERO also purchased 81.0% of Verify Investor, LLC, an accredited investor verification company. This transaction is described further in Note 3—Acquisitions, Goodwill, and Acquired Intangible Assets. The financial position and results of operations for these entities are included in our consolidated financial statements. Medici Land Governance Inc., a Delaware public benefit corporation ("MLG"), was recently formed by Medici Ventures with our President and Chief Executive Officer, Dr. Patrick M. Byrne ("Dr. Byrne"). Pursuant to the Subscription Agreements dated September 21, 2018, Medici Ventures contributed certain of its assets, including intellectual property relating to technologies regarding land governance and property rights, to MLG in exchange for 510,000 shares of MLG common stock and at the same time Dr. Byrne personally contributed $6.7 million in cash to MLG in exchange for 390,000 shares of MLG common stock. As a result of the transactions described above, Medici Ventures holds approximately 57% of the outstanding capital stock of MLG, and Dr. Byrne holds approximately 43% of the outstanding capital stock of MLG. Leases We account for lease agreements as either operating or capital leases depending on certain defined criteria. In certain of our lease agreements, we receive rent holidays and other incentives. We recognize lease costs on a straight-line basis without regard to deferred payment terms, such as rent holidays, that defer the commencement date of required payments. Additionally, tenant improvement allowances are amortized as a reduction in rent expense over the term of the lease. Leasehold improvements are capitalized at cost and amortized over the lesser of their expected useful life or the term of the lease at inception, without assuming renewal features, if any, are exercised. Treasury stock We account for treasury stock of our common shares under the cost method and include treasury stock as a component of stockholders' equity. Goodwill Goodwill represents the excess of the purchase price paid over the fair value of the net assets acquired in business combinations. Goodwill is not amortized but is tested for impairment at least annually or when we deem that a triggering event has occurred. When evaluating whether goodwill is impaired, we make a qualitative assessment to determine if it is more likely than not that the fair value of a reporting unit is less than its carrying amount. If the qualitative assessment determines that it is more likely than not that its fair value is less than its carrying amount, we compare the fair value of the reporting unit to which the goodwill is assigned to its carrying amount. If the carrying amount exceeds its fair value, an impairment loss is recognized in an amount equal to the excess of the carrying amount over the fair value of the reporting unit, not to exceed the carrying amount of the goodwill. There were no impairments to goodwill recorded during the years ended December 31, 2018 , 2017 and 2016 . For the year ended December 31, 2018 , we recognized $8.2 million in goodwill related to two business acquisitions as described in Note 3-Acquisitions, Goodwill, and Acquired Intangible Assets. Intangible assets other than goodwill We capitalize and amortize intangible assets other than goodwill over their estimated useful lives unless such lives are indefinite. Intangible assets other than goodwill acquired separately from third-parties are capitalized at cost while such assets acquired as part of a business combination are capitalized at their acquisition-date fair value. Indefinite-lived intangible assets are tested for impairment annually or more frequently when events or circumstances indicate that the carrying value more likely than not exceeds its fair value. In addition, we routinely evaluate the remaining useful life of intangible assets not being amortized to determine whether events or circumstances continue to support an indefinite useful life, including any legal, regulatory, contractual, competitive, economic, or other factors that may limit their useful lives. Definite lived intangible assets are amortized using the straight-line method of amortization over their useful lives, with the exception of certain intangibles (such as acquired technology, customer relationships, and trade names) which are amortized using an accelerated method of amortization based on cash flows. These definite lived intangible assets are reviewed for impairment whenever events or changes in circumstances indicate that their carrying amount may not be recoverable as described below under Impairment of long-lived assets . Intangible assets, net consist of the following (in thousands): December 31, 2018 2017 Intangible assets subject to amortization, gross (1) $ 29,099 $ 17,779 Less: accumulated amortization of intangible assets subject to amortization (15,729 ) (10,442 ) Total intangible assets, net $ 13,370 $ 7,337 ___________________________________________ (1) — At December 31, 2018 , the weighted average remaining useful life for intangible assets, other, excluding fully amortized intangible assets, was 5.54 years. For the year ended December 31, 2018 , we recognized a $3.2 million loss included in General and administrative expense in our consolidated statements of operation, upon the sale of our investment advisor licenses, as part of the ES Capital disposition, which were classified as intangible assets. Amortization of intangible assets other than goodwill is classified within the corresponding operating expense categories in our consolidated statements of operations as follows (in thousands): Year ended 2018 2017 2016 Technology $ 3,424 $ 3,620 $ 2,904 Sales and marketing 460 83 1,008 General and administrative 1,402 296 56 Total amortization $ 5,286 $ 3,999 $ 3,968 Estimated amortization expense for the next five years is: $5.6 million in 2019 , $2.8 million in 2020 , $2.4 million in 2021 , $1.2 million in 2022 , $705,000 in 2023 and $695,000 thereafter. Impairment of long-lived assets We review property and equipment and other long-lived assets, including intangible assets other than goodwill, for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset group may not be recoverable. See the Cryptocurrencies section above for our impairment policy over cryptocurrencies. Recoverability is measured by comparison of the assets' carrying amount to future undiscounted net cash flows the asset group is expected to generate. Cash flow forecasts are based on trends of historical performance and management's estimate of future performance, giving consideration to existing and anticipated competitive and economic conditions. If such asset group is considered to be impaired, the impairment to be recognized is measured by the amount by which the carrying amount of the assets exceeds their fair values. There were no impairments to long-lived assets recorded during the years ended December 31, 2018 , 2017 and 2016 . For the year ended December 31, 2018 , we realized a $6.0 million loss on impairments to indefinite-lived intangible assets included in General and administrative expense in our consolidated statements of operations related to certain intellectual property licenses held by Medici Ventures that previously had an indefinite useful life. In conjunction with our annual assessment, we concluded the remaining useful life of these licenses were zero based on current contractual arrangements. There were no impairments to intangible assets recorded during the years ended December 31, 2017 and 2016 . Other long-term assets, net Other long-term assets, net consist primarily of long-term prepaid expenses and deposits. Derivative financial instruments In 2014, we entered into a loan agreement in connection with the construction of our new corporate headquarters. We began borrowing under the facility in October 2015. Because amounts borrowed on the loan carried a variable LIBOR-based interest rate, we were affected by changes in certain market conditions and as such, we used derivatives, in the form of interest rate swap agreements, as a risk management tool to mitigate the potential impact of these changes. In November 2017, we repaid the outstanding balance of the underlying loans and concurrently terminated the derivative instruments. To the extent that the hedges were effective, the changes in fair values of our cash flow hedges were recorded in Accumulated other comprehensive income (loss) in the consolidated statements of changes in stockholders' equity. The variable-rate interest on the borrowing for our new corporate headquarters was capitalized during the construction period and is reclassified into earnings over the depreciable life of the asset. Upon termination of the derivative instrument in November 2017, we reclassified $941,000 unrealized loss on cash flow hedges, net of tax benefits from Accumulated other comprehensive loss into earnings, and recognized a $1.4 million loss on early extinguishment of debt recorded in Other income, net in our consolidated statements of operations for the year ended December 31, 2017 . The remaining construction period capitalized variable-rate interest from our cash flow hedge included in Accumulated other comprehensive loss is not material. Revenue recognition As further discussed below in Recently adopted accounting standards , the Company adopted ASC 606 effective at the beginning of fiscal 2018. Refer to Note 2 - Summary of Significant Accounting Policies of the Company’s annual report on Form 10-K for the year ended December 30, 2017 for policies in effect for revenue recognition prior to December 31, 2017, which were based on ASC 605. Revenue is recognized when, or as, control of a promised product or service transfers to a customer, in an amount that reflects the consideration to which the Company expects to be entitled in exchange for transferring those products or services. Revenue excludes taxes that have been assessed by governmental authorities and that are directly imposed on revenue-producing transactions between the Company and its customers, including sales and use taxes. Revenue recognition is evaluated through the following five-step process: 1) identification of the contract with a customer; 2) identification of the performance obligations in the contract; 3) determination of the transaction price; 4) allocation of the transaction price to the performance obligations in the contract; and 5) recognition of revenue when or as a performance obligation is satisfied. Product Revenue We derive our revenue primarily from our retail business through our Website, but may also derive revenue from sales of merchandise through offline and other channels. Our Retail revenue is derived primarily from merchandise sold at a point in time and shipped to customers. Merchandise sales are fulfilled with inventory sourced through our partners or from our owned inventory, depending on the most efficient means of fulfilling the customer contract. The majority of our sales, however, are fulfilled from inventory sourced through our partners. Revenue is recognized when control of the product passes to the customer, typically at the date of delivery of the merchandise to the customer or the date a service is provided, and is recognized in an amount that reflects the expected consideration to be received in exchange for such goods or services. As such, customer orders are recorded as deferred revenue prior to delivery of products or services ordered. As we ship high volumes of packages through multiple carriers, it is not practical for us to track the actual delivery date of each shipment. Therefore, we use estimates to determine which shipments are delivered and, therefore, recognized as revenue at the end of the period. Our delivery date estimates are based on average shipping transit times, which are calculated using the following factors: (i) the type of shippin |
ACQUISITIONS, GOODWILL, AND ACQ
ACQUISITIONS, GOODWILL, AND ACQUIRED INTANGIBLE ASSETS | 12 Months Ended |
Dec. 31, 2018 | |
Business Combinations [Abstract] | |
Acquisitions, Goodwill, and Acquired Intangible Assets | ACQUISITIONS, GOODWILL, AND ACQUIRED INTANGIBLE ASSETS Verify Investor, LLC On February 12, 2018, tZERO acquired 81% of the total equity interests of Verify Investor, LLC, an accredited investor verification company, for a total purchase price of $12.0 million in cash. We estimated the fair value of the acquired assets based on Level 3 inputs, which were unobservable (see Note 2—Accounting Policies, Fair value of financial instruments). These inputs included our estimate of future revenues, operating margins, discount rates, royalty rates and assumptions about the relative competitive environment. The fair values of the assets acquired and liabilities assumed at the acquisition date are as follows (in thousands): Purchase Price Fair Value Cash paid, net of cash acquired $ 11,769 Allocation Intangible assets $ 7,400 Goodwill 7,360 Other assets acquired 3 Other liabilities assumed (179 ) Total net assets, net of cash acquired 14,584 Less: noncontrolling interest (2,815 ) Total net assets attributable to tZERO, net of cash acquired $ 11,769 The following table details the identifiable intangible assets acquired at their fair value and remaining useful lives as of December 31, 2018 (amounts in thousands): Intangible Assets Fair Value Weighted Average Useful Life (years) Technology and developed software $ 6,300 10 Trade names 700 10 Customer relationships 400 0.5 Total acquired intangible assets as of the acquisition date 7,400 Less: accumulated amortization of acquired intangible assets 1,105 Total acquired intangible assets, net $ 6,295 The expense for amortizing intangible assets acquired in connection with this acquisition was $1.1 million for the year ended December 31, 2018 . Acquired intangible assets primarily include technology, trade name, and customer relationships. As described above, we determined the fair value of these assets using an income approach method to determine the present value of expected future cash flows for each identifiable intangible asset. This method was based on discount rates which incorporate a risk premium to take into account the risks inherent in those expected cash flows. The expected cash flows were estimated based on the company's historical operating results. The acquired assets, liabilities, and associated operating results were consolidated into our financial statements at the acquisition date. The goodwill recognized arises from intangible assets that do not qualify for separate recognition and expected synergies with our tZERO operations. The total amount of goodwill expected to be deductible for tax purposes is our share of the goodwill recognized at the acquisition date. The carrying amount of goodwill has not changed since the acquisition date. Pro forma results of operations have not been presented because the effects of this acquisition were not material to our consolidated results of operations. Mac Warehouse, LLC On June 25, 2018, we acquired 100% of the total equity interests of Mac Warehouse, LLC, an electronics retailer of refurbished Apple products, to complement our retail business for a total purchase price of $1.2 million in cash and the assumption of a loan of $3.1 million . We estimated the fair value of the acquired assets and liabilities based on Level 3 inputs, which were unobservable (see Note 2-Accounting Policies, Fair value of financial instruments ) . These inputs included our estimate of future revenues, operating margins, discount rates, royalty rates and assumptions about the relative competitive environment. Determination and allocation of the purchase price to net tangible and intangible assets is based upon preliminary estimates. These preliminary estimates and assumptions could change significantly during the measurement period as we finalize the valuations of the intangible assets acquired and related tax impact. Any change could result in variances between our future financial results and the amounts recognized in the financial information presented below, including variances in fair values recorded, as well as expenses associated with these items. The preliminary estimated fair values of the assets acquired and liabilities assumed at the acquisition date are as follows (in thousands): Purchase Price Fair Value Cash paid, net of cash acquired $ 1,143 Allocation Accounts receivable, net $ 399 Inventories, net 1,033 Prepaids and other current assets 29 Fixed assets 154 Intangible assets 3,502 Goodwill 837 Accounts payable and accrued liabilities (905 ) Long-term debt, net (3,069 ) Deferred tax liabilities (837 ) Total net assets, net of cash acquired $ 1,143 Acquired intangible assets primarily include trade name and customer relationships which have an estimated useful life of 18 months. The acquired assets, liabilities, and associated operating results were consolidated into our financial statements at the acquisition dates. The carrying amount of goodwill includes the amount of deferred tax liability recognized. The following unaudited pro forma financial information presents our results as if the current year acquisitions of Mac Warehouse, LLC had occurred at the beginning of 2016 (amounts in thousands), however, it should not be taken as indicative of our future consolidated results of operations: (unaudited) Years ended December 31, 2018 2017 2016 Total revenue $ 1,825,776 $ 1,759,503 $ 1,809,418 Consolidated net income (loss) $ (222,597 ) $ (111,848 ) $ 11,380 |
ACCOUNTS RECEIVABLE
ACCOUNTS RECEIVABLE | 12 Months Ended |
Dec. 31, 2018 | |
Receivables [Abstract] | |
ACCOUNTS RECEIVABLE | ACCOUNTS RECEIVABLE, NET Accounts receivable, net consist of the following (in thousands): December 31, 2018 2017 Freight rebates receivable $ 11,729 $ 8,527 Accounts receivable, trade 10,380 8,317 Credit card receivables 8,924 8,480 Other receivables 7,013 6,009 38,046 31,333 Less: allowance for doubtful accounts (2,116 ) (1,253 ) Accounts receivable, net $ 35,930 $ 30,080 |
INVENTORIES
INVENTORIES | 12 Months Ended |
Dec. 31, 2018 | |
Inventory Disclosure [Abstract] | |
INVENTORIES | INVENTORIES, NET Inventories, net consist of the following (in thousands): December 31, 2018 2017 Product inventories, net $ 10,520 $ 8,844 Inventory in-transit 3,588 4,859 Total inventories, net $ 14,108 $ 13,703 |
PREPAIDS AND OTHER ASSETS
PREPAIDS AND OTHER ASSETS | 12 Months Ended |
Dec. 31, 2018 | |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | |
PREPAIDS AND OTHER ASSETS | PREPAIDS AND OTHER CURRENT ASSETS Prepaids and other current assets consist of the following (in thousands): December 31, 2018 2017 Prepaid maintenance $ 7,373 $ 7,427 Prepaid other 7,573 5,684 Other current assets 3,322 1,577 Prepaid insurance 2,341 444 Prepaid advertising 961 987 Prepaid inventories 845 1,625 Total prepaids and other current assets $ 22,415 $ 17,744 |
FIXED ASSETS
FIXED ASSETS | 12 Months Ended |
Dec. 31, 2018 | |
Property, Plant and Equipment [Abstract] | |
FIXED ASSETS | FIXED ASSETS, NET Fixed assets, net consist of the following (in thousands): December 31, 2018 2017 Computer hardware and software, including internal-use software and website development $ 215,412 $ 196,501 Building 69,266 69,169 Furniture and equipment 17,066 14,455 Land 12,781 12,781 Building machinery and equipment 9,713 8,356 Leasehold improvements 8,379 7,752 Land improvements 6,972 6,764 339,589 315,778 Less: accumulated depreciation (204,902 ) (186,435 ) Total fixed assets, net $ 134,687 $ 129,343 Depreciation of fixed assets totaled $26.4 million , $28.8 million , and $27.3 million for the years ended December 31, 2018 , 2017 and 2016 , respectively. During 2018 , we retired $8.0 million of fully depreciated fixed assets that were removed from service in 2018 . Fixed assets included assets under capital leases and finance obligations of $1.8 million and $1.8 million at December 31, 2018 and 2017 , respectively. Accumulated depreciation related to assets under capital leases and finance obligations was $962,000 and $458,000 at December 31, 2018 and 2017 , respectively. Depreciation expense of assets recorded under capital leases and finance obligations was $504,000 , $3.5 million and $4.1 million for the years ended December 31, 2018 , 2017 and 2016 , respectively. |
OTHER LONG-TERM ASSETS
OTHER LONG-TERM ASSETS | 12 Months Ended |
Dec. 31, 2018 | |
OTHER LONG-TERM ASSETS | |
OTHER LONG-TERM ASSETS | OTHER LONG-TERM ASSETS, NET Other long-term assets, net consist of the following (in thousands): December 31, 2018 2017 Deposit on purchase of a business $ 8,000 $ — Other long-term assets 4,310 2,786 Prepaid expenses, long-term portion 2,154 1,430 Total other long-term assets, net $ 14,464 $ 4,216 |
ACCRUED LIABILITIES
ACCRUED LIABILITIES | 12 Months Ended |
Dec. 31, 2018 | |
Payables and Accruals [Abstract] | |
ACCRUED LIABILITIES | ACCRUED LIABILITIES Accrued liabilities consist of the following (in thousands): December 31, 2018 2017 Accounts payable accruals $ 15,872 $ 16,614 Allowance for returns 15,261 17,391 Accrued marketing expenses 14,150 25,959 Accrued compensation and other related costs 12,099 10,716 Accrued loss contingencies 10,940 608 Sales and other taxes payable 9,923 2,363 Accrued freight 5,343 5,040 Other accrued expenses 4,270 3,920 Total accrued liabilities $ 87,858 $ 82,611 |
DEFERRED REVENUE
DEFERRED REVENUE | 12 Months Ended |
Dec. 31, 2018 | |
Deferred Revenue Disclosure [Abstract] | |
DEFERRED REVENUE | DEFERRED REVENUE Deferred revenue consists of the following (in thousands): December 31, 2018 2017 Payments received prior to product delivery $ 30,033 $ 24,632 Club O membership fees and reward points 11,709 11,761 Unredeemed gift cards 3,399 4,955 In store credits 4,707 4,489 Other 730 631 Total deferred revenue $ 50,578 $ 46,468 |
BORROWINGS
BORROWINGS | 12 Months Ended |
Dec. 31, 2018 | |
Debt Disclosure [Abstract] | |
BORROWINGS | BORROWINGS PCL L.L.C. Term Loan On November 6, 2017, we entered into a loan agreement with PCL L.L.C., an entity directly or indirectly wholly-owned by the mother and brother of our President and Chief Executive Officer, Dr. Patrick M. Byrne ("Dr. Byrne"). The agreement provides for a $40.0 million term loan (the "PCL Loan") which carries an annual interest rate of 8.0% . On May 8, 2018, our Board of Directors approved a prepayment of the PCL Loan and we repaid the entire outstanding balance under the loan plus accrued interest. High Bench Senior Credit Agreement On June 25, 2018, we became party to a senior credit agreement, as amended, with High Bench-Mac Warehouse-Senior Debt, LLC ("High Bench Loan"), in connection with our acquisition of Mac Warehouse, LLC. Under the amended agreement, the loan carries an annual interest rate of 11.0% and a default rate of 18.0% . The High Bench Loan is subject to monthly interest only payments with the remaining principal amount and any then unpaid interest due and payable on April 18, 2020. The High Bench Loan is subject to mandatory prepayment under certain circumstances, such as a change-in-control of the business, and is prepayable at our election at any time without penalty or premium. There are no financial covenants associated the High Bench Loan. At December 31, 2018 , our outstanding balance on the High Bench Loan was $3.1 million . Letters of credit At December 31, 2018 and 2017 , letters of credit totaling $280,000 and $355,000 , respectively, were issued on our behalf collateralized by compensating cash balances held at a bank, which are included in Restricted cash in our consolidated balance sheets. Commercial purchasing card agreement We have a commercial purchasing card (the "Purchasing Card") agreement. We use the Purchasing Card for business purpose purchasing and must pay it in full each month. At December 31, 2018 , $48,000 was outstanding and $952,000 was available under the Purchasing Card. At December 31, 2017 , $822,000 was outstanding and $4.2 million was available under the Purchasing Card. Capital lease During the year ended December 31, 2017, we entered into a capital lease arrangement of computer equipment for $1.4 million . The arrangement will expire in 2020. At December 31, 2018 , the outstanding balance under the capital lease was $884,000 and is included in Other current liabilities, net and Other long-term liabilities on our consolidated balance sheets. Future payment obligations, including interest, under the capital lease are $496,000 and $413,000 for 2019 and 2020 , respectively. |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 12 Months Ended |
Dec. 31, 2018 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS AND CONTINGENCIES | COMMITMENTS AND CONTINGENCIES Summary of future minimum lease payments for all operating leases Minimum future payments under all operating leases as of December 31, 2018 , are as follows (in thousands): Payments due by period: 2019 $ 8,822 2020 7,414 2021 7,654 2022 7,579 2023 6,677 Thereafter 19,571 $ 57,717 Our subsidiary, tZERO, commenced a new lease subsequent to December 31, 2018 . We have included the future lease payments associated with this lease in the table above. Rental expense for operating leases totaled $7.8 million , $9.3 million and $12.6 million for the years ended December 31, 2018 , 2017 and 2016 , respectively. 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. On September 23, 2009, SpeedTrack, Inc. sued us along with 27 other defendants in the United States District Court in the Northern District of California. We are alleged to have 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. On April 21, 2016, the court entered an order partially dismissing the claims against us. On May 4, 2016, the plaintiff filed an amended complaint, and we filed our answer. No estimate of the possible loss or range of loss can be made. We intend to vigorously defend this action and pursue our indemnification rights with our vendors. On February 11, 2013, RPost Holdings, Inc., RPost Communications Limited, and RMail Limited, filed suit against us in the United States District Court in the Eastern District of Texas for infringement of patents covering products and services that verify the delivery and integrity of email messages. We tendered defense of the case to an indemnitor who accepted the defense. No estimate of the possible loss or range of loss can be made. We intend to vigorously defend this action and pursue our indemnification rights with our vendors. On September 20, 2018, a jury returned a verdict against us in our Delaware unclaimed property case, which is expected to result in a judgment against us in the amount of approximately $7.3 million (for certain unredeemed gift card balances, treble damages, and penalties) plus attorneys’ fees and costs. Our estimated liability for these amounts was included in Accrued liabilities at December 31, 2018. The expense associated with these litigation charges was included in general and administrative expense in our consolidated statement of operations for the year ended December 31, 2018. William French ("French") and the State of Delaware ("Delaware") sued us, along with numerous other defendants, in the Superior Court of the State of Delaware for alleged violations of Delaware's unclaimed property laws. French and Delaware alleged that we knowingly refused to fulfill obligations under Delaware's Abandoned Property Law by failing to report and deliver unclaimed gift card funds to the State of Delaware, and knowingly made, used or caused to be made or used, false statements and records to conceal, avoid or decrease an obligation to pay or transmit money to Delaware in violation of the Delaware False Claims and Reporting Act. We intend to file an appeal once a judgment has been entered by the court. On June 21, 2018, the U.S. Supreme Court issued an opinion in our South Dakota sales tax case, overturning Quill Corp v. North Dakota and permitting states to require remote sellers to collect sales tax under certain circumstances. As a result, we began collecting sales tax in all 45 states that have sales tax, including South Dakota. Pursuant to South Dakota’s statute, we are not required to pay sales tax retroactively. Although the U.S. Supreme Court’s opinion vacated and remanded the case back to the South Dakota Supreme Court for further proceedings, the parties entered an agreement to dismiss the case in November of 2018. On July 7, 2017, the State of Wyoming sued us along with five other defendants in the Second Judicial District Court of Wyoming. Wyoming alleged that U.S. constitutional law should be revised to permit Wyoming to require out-of-state e-commerce retailers to collect and remit sales tax in Wyoming in accordance with Wyoming's sales tax statute. After the U.S. Supreme Court’s ruling in our South Dakota case listed above, we began collecting sales tax in Wyoming and a consent judgment to dismiss the case was entered in November of 2018. Wyoming’s statute does not require us to pay sales tax retroactively. On August 28, 2017, the State of Indiana sued us along with one other defendant in the Superior Court of Indiana, Marion County. Indiana alleged that U.S. constitutional law should be revised to permit Indiana to require out-of-state e-commerce retailers to collect and remit sales tax in Indiana in accordance with Indiana's sales tax statute. After the U.S. Supreme Court’s ruling in our South Dakota case listed above, we began collecting sales tax in Indiana. Indiana’s statute does not require us to pay sales tax retroactively. The Indiana case was dismissed in August of 2018. 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 of 2018, we received a follow-up request from the SEC relating to its investigation. We are cooperating fully with the SEC in connection with its investigation. tZERO's broker-dealer subsidiaries are, and any broker-dealer subsidiaries that it acquires or forms in the future will be, subject to extensive regulatory requirements under federal and state laws and regulations and self-regulatory organization ("SRO") rules. Each of SpeedRoute and PRO Securities is registered with the SEC as a broker-dealer under 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, PRO Securities owns and operates the PRO Securities ATS, which is registered with the SEC as an alternative trading system. Each of SpeedRoute and PRO Securities 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; as appropriate or required, we will provide further information regarding such matters. Any failure by tZERO's broker-dealer subsidiaries to satisfy their regulatory authorities that they are in compliance with all applicable rules and regulations could have a material adverse effect on tZERO and on us. On January 31, 2019, a putative class action lawsuit was filed against us in the United States District Court, Southern District of New York, alleging that our website violates the Americans with Disabilities Act ("ADA") in addition to other New York specific laws, because it is not accessible to blind and visually impaired people. No estimate of the possible loss or range of loss can be made. We intend to vigorously defend this action. On March 15, 2019, Consolidated Transaction Processing, LLC. filed suit against us in the United States District Court for the District of Delaware. We are alleged to have infringed patents covering electronic transaction processing methods. We are currently evaluating the merits of the complaint, and no estimate of the possible loss or range of loss can be made. We intend to vigorously defend this action and pursue any indemnification rights that exist with our vendors. We establish liabilities when a particular contingency is probable and estimable. At December 31, 2018 , we have accrued $10.3 million , which is included in accrued liabilities in the consolidated balance sheets. It is reasonably possible that the actual losses may exceed our accrued liabilities. |
INDEMNIFICATIONS AND GUARANTEES
INDEMNIFICATIONS AND GUARANTEES | 12 Months Ended |
Dec. 31, 2018 | |
INDEMNIFICATIONS AND GUARANTEES | |
INDEMNIFICATIONS AND GUARANTEES | 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 to 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
STOCKHOLDERS' EQUITY | 12 Months Ended |
Dec. 31, 2018 | |
Stockholders' Equity Note [Abstract] | |
STOCKHOLDERS' EQUITY | 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. No dividends have been declared or paid on our common stock through December 31, 2018 . Preferred Stock Each share of Series A Preferred and each share of Series B Preferred (collectively the "preferred shares") is 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 will be 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 on our preferred stock during 2017 and 2018 . Neither the Series A Preferred nor Series B Preferred 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 Preferred shares into Series B Preferred shares at any time on a one -to-one basis. Until the third anniversary of the original issuance date, we may redeem, at our discretion, both the Series A and Series B Preferred shares for an amount equal to the highest of the following: (1) the subscription price plus any accrued but unpaid dividends, (2) 105% of the average trading price of our common stock during a five -trading-day period and (3) 105% of the average trading price of the series of preferred shares during the same five -day-trading period. 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 Preferred and each share of Series B Preferred being treated as though it were a share of our common stock. JonesTrading Sales Agreement In August 2018, we entered into a sales agreement with JonesTrading Institutional Services LLC ("JonesTrading"), under which we conducted "at the market" public offerings of our common stock during the quarter ended September 30, 2018, and may conduct additional "at the market" public offerings of our common stock from time to time. Under the sales agreement, JonesTrading, acting as our agent, 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 expect to do so from time to time. We will pay JonesTrading up to a 2.0% sales commission on all sales. The sales agreement contemplates sales of up to $150 million of our common stock over a period of up to three years. As of December 31, 2018 , we had sold 2,883,344 shares of our common stock pursuant to the sales agreement and have received $94.6 million in proceeds, net of $2.6 million of offering costs, including commissions paid to JonesTrading. The average price per share of stock sold pursuant to the sales agreement during the year ended December 31, 2018 , excluding offering costs, was $33.71 . JonesTrading Standby Equity Agreement In August 2018 we also entered into a standby equity underwriting agreement with JonesTrading. We did not sell any shares under the standby equity underwriting agreement, and the agreement terminated in accordance with its terms during the quarter ended September 30, 2018. Under the standby underwriting agreement, we had the right, but no obligation, to sell up to $50 million of our common stock to JonesTrading, as underwriter, for sale to the public in a firm commitment public offering. We paid a 1% commitment fee to JonesTrading for entering into the underwriting agreement. GSR Agreement In August 2018, Overstock signed a Token Purchase Agreement with GSR Capital Ltd., a Cayman Islands exempted company ("GSR"). The Token Purchase Agreement sets forth the terms on which GSR agreed to purchase, for $30 million , on May 6, 2019 or such other date as may be agreed by the parties, security tokens at a price of $6.67 per security token. These security tokens were issued by tZERO to Overstock in satisfaction of $30 million of tZERO's indebtedness to Overstock. We may be required to obtain additional tokens in order to fulfill our obligations under the agreement. The agreement states that the obligations of GSR to complete the transaction described will be subject to conditions, some of which are unidentified. |
STOCK-BASED AWARDS
STOCK-BASED AWARDS | 12 Months Ended |
Dec. 31, 2018 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
STOCK-BASED AWARDS | 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 in the company or subsidiary's shares only to its own employees, respectively. No sibling or upstream awards have been granted. Stock-based compensation expense was as follows (in thousands): Years ended December 31, 2018 2017 2016 Overstock restricted stock awards $ 9,096 $ 4,056 $ 4,891 Medici Ventures stock options 412 21 — tZERO equity awards 4,848 — — Total stock-based compensation expense $ 14,356 $ 4,077 $ 4,891 Overstock stock option awards Our Board of Directors adopted the Overstock.com, Inc. 2005 Equity Incentive Plan and it was most recently amended and restated and re-approved by the stockholders on May 9, 2017 (as so amended and restated, the "Plan"). Under the Plan, the Board of Directors may issue 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. Options granted under this Plan generally expire at the end of ten years and vest in accordance with a vesting schedule determined by our Board of Directors, usually over four years from the grant date. We did not grant any options during the years ended December 31, 2018 , 2017 and 2016 . At December 31, 2018 , 1.8 million shares of stock remained available for future grants under the Plan. We settle stock option exercises with newly issued common shares. As of December 31, 2018 , there were no options outstanding under the Plan. The following is a summary of stock option activity (in thousands, except per share data): 2018 2017 2016 Shares Weighted Average Exercise Price Shares Weighted Average Exercise Price Shares Weighted Average Exercise Price Outstanding—beginning of year — $ — 156 $ 17.33 204 $ 17.27 Exercised — — (39 ) 16.90 (42 ) 17.08 Expired/Forfeited — — (117 ) 17.48 (6 ) 17.08 Outstanding—end of year — $ — — $ — 156 $ 17.33 Options exercisable at year-end — $ — — $ — 156 $ 17.33 The most recent stock options were granted in May 2008 and have fully vested. There was no stock based compensation related to stock options recorded during the years ended December 31, 2018 , 2017 and 2016 . The total intrinsic value of options exercised during the years ended December 31, 2018 , 2017 and 2016 was $0 , $54,000 , and $82,000 , respectively. The total cash received from employees as a result of employee stock option exercises during the years ended December 31, 2018 , 2017 and 2016 were approximately $0 , $664,000 , and $819,000 , respectively. Overstock restricted stock awards For the years ended December 31, 2018 , 2017 and 2016 , the Compensation Committee of the Board of Directors approved grants of 387,000 , 310,000 and 541,000 restricted stock awards, respectively, to our officers, board members and employees. These restricted stock awards 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. At December 31, 2018 , there were 559,000 unvested restricted stock awards that remained outstanding. 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 three -year 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 weighted average grant date fair value of restricted stock awards granted during the years ended December 31, 2018 , 2017 and 2016 was $65.42 , $17.75 and $14.52 , respectively. The following table summarizes restricted stock award activity (in thousands, except fair value data): 2018 2017 2016 Units Weighted Units Weighted Units Weighted Outstanding—beginning of year 540 $ 17.05 560 $ 17.46 349 $ 24.80 Granted at fair value 387 65.42 310 17.75 541 14.52 Vested (234 ) 17.68 (212 ) 19.58 (219 ) 22.57 Forfeited (134 ) 42.85 (118 ) 16.21 (111 ) 16.52 Outstanding—end of year 559 $ 44.08 540 $ 17.05 560 $ 17.46 Medici Ventures stock options The Medici Ventures, Inc. 2017 Stock Option Plan provides for the grant of options to employees and directors of and consultants to Medici Ventures to acquire up to 10% of the authorized shares of Medici Ventures' common stock. During the twelve months ended December 31, 2018 , Medici Ventures granted 94,450 stock options with a cumulative grant date fair value of $1.8 million which vest over a three year period. During the year ended December 31, 2017, Medici Ventures granted 74,750 stock options to certain Medici Ventures and Overstock employees with a cumulative grant date fair value of $91,000 , which will be expensed on a straight-line basis over the vesting period of three years. tZERO equity awards The tZERO.com 2017 Equity Incentive Plan provides for grant of options to employees and directors of and consultants to tZERO to acquire up to 5% of the authorized shares of tZERO's common stock. In January 2018, tZERO granted 2,000,000 restricted stock awards (post-stock split) with a cumulative grant date fair value of $4.0 million under the equity incentive plan, all of which vested on January 23, 2018. Accordingly, there is no expense to be recognized in future periods related to these awards. As a result of these vested awards, our indirect ownership interest in tZERO was reduced from 81% to approximately 80% . During the twelve months ended December 31, 2018 , tZERO granted awards to acquire 5,590,000 shares (post-stock split) of its stock with a cumulative grant date fair value of $4.6 million which will be expensed on a straight-line basis over the vesting period of two to three years. No awards were issued during the year ended December 31, 2017. |
EMPLOYEE RETIREMENT PLAN
EMPLOYEE RETIREMENT PLAN | 12 Months Ended |
Dec. 31, 2018 | |
Retirement Benefits [Abstract] | |
EMPLOYEE RETIREMENT PLAN | EMPLOYEE RETIREMENT PLAN We have a 401(k) defined contribution plan which permits participating employees to defer a portion of their compensation, subject to limitations established by the Internal Revenue Code. During the years ended December 31, 2018 , 2017 and 2016 , employees who completed 3 months of service and are 21 years of age or older are qualified to participate in the plan which matches 100% of the first 6% of each participant's contributions to the plan subject to IRS limits. Matching contributions vest immediately. Participant contributions also vest immediately. Our matching contribution totaled $5.5 million , $4.1 million and $3.8 million for the years ended December 31, 2018 , 2017 and 2016 , respectively. We made no discretionary contributions to eligible participants for the years ended December 31, 2018 , 2017 and 2016 , respectively. |
OTHER INCOME (EXPENSE), NET
OTHER INCOME (EXPENSE), NET | 12 Months Ended |
Dec. 31, 2018 | |
Other Income and Expenses [Abstract] | |
OTHER INCOME, NET | OTHER INCOME (EXPENSE), NET Other income (expense), net consisted of the following (in thousands): Years ended December 31, 2018 2017 2016 Club O Rewards and gift card breakage $ — $ 2,742 $ 16,808 Gain on investment in precious metals — 1,971 201 Loss on equity investments, net (2,843 ) (5,995 ) (2,850 ) Other (645 ) 2,460 22 Total other income (expense), net $ (3,488 ) $ 1,178 $ 14,181 |
INCOME TAXES
INCOME TAXES | 12 Months Ended |
Dec. 31, 2018 | |
Income Tax Disclosure [Abstract] | |
INCOME TAXES | INCOME TAXES For financial reporting purposes, income (loss) before income taxes includes the following components (in thousands): Years ended December 31, 2018 2017 2016 United States $ (219,585 ) $ (48,039 ) $ 20,974 Foreign (369 ) 305 (429 ) Total income (loss) before income taxes $ (219,954 ) $ (47,734 ) $ 20,545 The provision (benefit) for income taxes for 2018 , 2017 and 2016 consists of the following (in thousands): Years ended December 31, 2018 2017 2016 Current: Federal $ (57 ) $ 365 $ 280 State (141 ) 280 1,264 Foreign 44 57 34 Total current (154 ) 702 1,578 Deferred: Federal (1,583 ) 56,350 7,311 State (645 ) 7,146 410 Foreign (2 ) (10 ) (2 ) Total deferred (2,230 ) 63,486 7,719 Total provision (benefit) for income taxes $ (2,384 ) $ 64,188 $ 9,297 The provision (benefit) for income taxes for 2018 , 2017 and 2016 differ from the amounts computed by applying the U.S. federal income tax rate of 21% for 2018 and 35% for 2017 and 2016 to income (loss) before income taxes for the following reasons (in thousands): Year ended December 31, 2018 2017 2016 U.S. federal income tax provision (benefit) at statutory rate $ (46,190 ) $ (16,707 ) $ 7,191 State income tax expense, net of federal benefit (8,289 ) (2,480 ) 1,232 Research and development credit (1,734 ) (1,696 ) (1,078 ) Stock based compensation expense (1,260 ) 164 674 Other 1,652 581 110 Gain on subsidiary stock 2,192 — — Reduction in federal rate — 25,287 — Change in valuation allowance 51,245 59,039 1,168 Total provision (benefit) for income taxes $ (2,384 ) $ 64,188 $ 9,297 The components of our deferred tax assets and liabilities as of December 31, 2018 and 2017 are as follows (in thousands): December 31, 2018 2017 Deferred tax assets: Net operating loss carryforwards $ 79,820 $ 29,350 Research and development tax credits 15,382 12,653 Accrued expenses 7,898 10,672 Reserves and other 5,345 1,480 Basis difference in investments 4,857 1,636 Fixed and intangible assets 2,493 8,068 Other tax credits 206 220 Gross deferred tax assets 116,001 64,079 Valuation allowance (114,523 ) (63,278 ) Total deferred tax assets 1,478 801 Deferred tax liabilities: Prepaid expenses (880 ) (788 ) Goodwill (489 ) (261 ) Fixed assets — — Total deferred tax liabilities (1,369 ) (1,049 ) Total deferred tax assets (liabilities), net $ 109 $ (248 ) At December 31, 2018 , we have federal net operating loss carryforwards with no expiration date of approximately $168.6 million and federal net operating loss carryforwards of approximately $152.3 million which primarily expire between 2020 and 2037 if unused. We have state net operating loss carryforwards of approximately $286.9 million , which primarily expire between 2021 and 2033 if unused. At December 31, 2018 , we have federal research credit carryforwards of approximately $16.4 million and state research credit carryforwards of approximately $6.9 million . These tax credits expire at various dates between 2021 and 2038 if unused. Ownership changes under Internal Revenue Code Section 382 could limit the amount of net operating losses or credit carryforwards that can be used in any annual period. Each quarter we assess the recoverability of our deferred tax assets under ASC Topic 740. We assess the available positive and negative evidence to estimate whether we will generate sufficient future taxable income to use our existing deferred tax assets. We have limited carryback ability and do not have significant taxable temporary differences to recover our existing deferred tax assets, therefore we must rely on future taxable income, including tax planning strategies, to support their realizability. We have established a valuation allowance for our deferred tax assets not supported by carryback ability or taxable temporary differences, primarily due to uncertainty regarding our future taxable income. We have considered, among other things, the cumulative loss incurred over the three-year period ended December 31, 2018, as a significant piece of objective negative evidence. We intend to continue maintaining a valuation allowance on our net deferred tax assets until there is sufficient evidence to support the reversal of all or some portion of these allowances. The amount of the deferred tax asset considered realizable could be adjusted if objective negative evidence in the form of cumulative losses is no longer present and additional weight may be given to subjective evidence such as long-term projections for growth. We will continue to monitor the need for a valuation allowance against our remaining deferred tax assets on a quarterly basis. Tax laws and regulations themselves are subject to change as a result of changes in fiscal policy, changes in legislation, the evolution of regulations, and court rulings. On December 22, 2017, the President signed into law Public Law No. 115-97, commonly referred to as the Tax Cuts and Jobs Act ("TCJA"), following its passage by the United States Congress. Staff Accounting Bulletin No. 118 ("SAB 118") was issued to address the application of US GAAP in situations when a registrant did not have the necessary information available, prepared, or analyzed (including computations) in reasonable detail to complete the accounting for certain income tax effects of the TCJA. As of December 31, 2017, we were able to reasonably estimate certain effects and, therefore, recorded adjustments associated with the remeasurement of certain deferred tax assets and liabilities and the mandatory deemed repatriation of cumulative foreign earnings. Our accounting for the following elements of the TCJA was completed as of September 30, 2018. The expense related to the remeasurement of certain deferred tax assets and liabilities, based on the rates at which they are expected to reverse in the future, was $25.2 million . The expense related to the one-time transition tax on the mandatory deemed repatriation of cumulative foreign earnings was $47,000 . We did not make any measurement-period adjustments related to these items during the year because there were no significant changes to our provisional amounts, and therefore, there is no impact to our effective tax rate due to measurement-period adjustments. The TCJA includes a provision to tax global intangible low-taxed income ("GILTI") of foreign subsidiaries beginning in 2018. Under GAAP, we can make an accounting policy election to either treat taxes due on the GILTI inclusion as a current period expense or factor such amounts into our measurement of deferred taxes. We will elect to treat any potential GILTI inclusions as a period cost as we are not projecting any material impact from GILTI inclusions and any deferred taxes related to any inclusion would be immaterial. A reconciliation of the beginning and ending unrecognized tax benefits, excluding interest and penalties, as of December 31, 2018 , 2017 and 2016 is as follows (in thousands): Year ended December 31, 2018 2017 2016 Beginning balance $ 6,964 $ 7,333 $ 4,753 Additions for tax positions related to the current year 1,013 881 1,112 Additions (reductions) for tax positions taken in prior years 332 230 1,468 Reduction for tax positions settled by utilizing tax attributes (335 ) (1,480 ) — Ending balance $ 7,974 $ 6,964 $ 7,333 Included in the balance of unrecognized tax benefits as of December 31, 2018 , 2017 and 2016 , are approximately $8.0 million , $7.0 million , and $5.9 million , respectively, of tax benefits that, if recognized, would affect the effective tax rate. Also included in the balance of unrecognized tax benefits as of December 31, 2018 , 2017 and 2016 , are approximately $0 , $0 , and $1.5 million , respectively, of tax benefits that, if recognized, would result in adjustments to other tax accounts, primarily deferred taxes. We believe it is reasonably possible that these unrecognized tax benefits will continue to increase in the future. Accrued interest and penalties on unrecognized tax benefits as of December 31, 2018 and 2017 were $499,000 and $492,000 , respectively. We are subject to taxation in the United States and various state and foreign jurisdictions. Tax years beginning in 2014 are subject to examination by taxing authorities, although net operating loss and credit carryforwards from all years are subject to examinations and adjustments for at least three years following the year in which the attributes are used. We are currently under audit in Ireland for the 2016 tax year. We have indefinitely reinvested foreign earnings of $1.4 million at December 31, 2018. We would need to accrue and pay various taxes on this amount if repatriated. We do not intend to repatriate these earnings. |
RELATED PARTY TRANSACTIONS
RELATED PARTY TRANSACTIONS | 12 Months Ended |
Dec. 31, 2018 | |
Related Party Transactions [Abstract] | |
RELATED PARTY TRANSACTIONS | RELATED PARTY TRANSACTIONS PCL L.L.C. term loan repayment On November 6, 2017, we entered into a loan agreement with PCL L.L.C., an entity directly or indirectly wholly-owned by the mother and brother of our President and Chief Executive Officer, Dr. Patrick M. Byrne ("Dr. Byrne"). The agreement provides for a $40.0 million term loan (the "PCL Loan") which carries an annual interest rate of 8.0% . On May 8, 2018, our Board of Directors approved a prepayment of the PCL Loan and we repaid the entire outstanding balance under the loan plus accrued interest. SiteHelix On June 28, 2018, we entered into and concurrently closed a Stock Purchase Agreement with the stockholders of SiteHelix, Inc., a Delaware corporation ("SiteHelix") pursuant to which we purchased all of the common stock of SiteHelix for $500,000 plus 100,000 shares of Overstock common stock with a transaction date fair value of $2.9 million for an aggregate purchase price of $3.4 million . The transaction was accounted for as an asset purchase consisting primarily of internal-use software designed to provide a customized user experience for visitors to our Website. Saum Noursalehi, who owned approximately 62% of the SiteHelix common stock, is a member of our Board of Directors and served as President, Retail, of Overstock until May 8, 2018, when he became Chief Executive Officer of tZERO. Bitsy Agreement In July 2018, Medici Ventures entered into a stock purchase agreement with Bitsy, Inc. ("Bitsy") to acquire an additional 25% equity interest in Bitsy for $3.0 million and $1.5 million worth of Overstock.com common stock ( 47,378 shares). Subsequent to the purchase, Medici Ventures held a 33% interest in Bitsy. Bitsy is a U.S.-based startup company that plans to build a regulatory-compliant bridge between the U.S. Dollar and cryptocurrencies and offer our customers the ability to purchase cryptocurrencies on or through the Bitsy app and our Website. Bitsy was founded by Steve Hopkins, Medici Ventures' former chief operating officer and general counsel, and current president of tZERO, who held a 25% equity interest in Bitsy. Our equity interest is included in our equity investments on our consolidated balance sheets. On December 21, 2018, tZERO entered into a stock purchase agreement with the owners of Bitsy to acquire the remaining 67% equity interest in Bitsy for $8.0 million with effective control of Bitsy transferring to tZERO effective January 1, 2019. As tZERO paid the $8.0 million purchase price prior to the effective date of the transaction, the payment is included in Other long-term assets in our consolidated balance sheets as a deposit on purchase of a business. In connection with the stock purchase agreement, Medici Ventures transferred its 33% equity interest to tZERO. Our purchase accounting has not yet been finalized for the transaction, as we are still finalizing our valuation of assets acquired and liabilities assumed. Chainstone Labs In September 2018, Medici Ventures entered into a stock purchase agreement with Chainstone Labs, Inc. ("Chainstone") to acquire a 29% equity interest in Chainstone for $3.6 million . Chainstone is a U.S.-based startup company founded and 71% owned by a Board member of Medici Ventures, Bruce Fenton. Chainstone is focused on blockchain, tokenization of securities, and decentralized asset management. Our equity interest is included in our equity investments on our consolidated balance sheets. Medici Land Governance Medici Land Governance Inc., a Delaware public benefit corporation ("MLG"), was formed by Medici Ventures with Dr. Byrne. Pursuant to the Subscription Agreements dated September 21, 2018, Medici Ventures contributed certain of its assets, including intellectual property relating to technologies regarding land governance and property rights, to MLG in exchange for 510,000 shares of MLG common stock and at the same time Dr. Byrne personally contributed $6.7 million in cash to MLG in exchange for 390,000 shares of MLG common stock. At the same time MLG, Medici Ventures, and Dr. Byrne entered into a Stockholders Agreement dated September 21, 2018 regarding MLG (the "MLG Stockholder Agreement"). The MLG Stockholder Agreement restricts the transfer of the shares held by Medici Ventures and Dr. Byrne, creates rights of first refusal in favor of MLG, Medici Ventures, and Dr. Byrne to acquire shares to be sold by Medici Ventures or Dr. Byrne, creates purchase rights in favor of MLG and Medici Ventures in the event of the death or incapacity of Dr. Byrne, creates preemptive rights in favor of MLG and Medici Ventures if MLG proposes to sell capital stock to any other person (subject to certain exceptions), provides for voting for board members, and requires a supermajority consent of the stockholders for any sale of MLG or substantially all of its assets, merger, consolidation, or other transaction having substantially the same effect. As a result of the transactions described above, Medici Ventures holds approximately 57% of the outstanding capital stock of MLG, and Dr. Byrne, our President and Chief Executive Officer, a member of our Board of Directors and our largest stockholder, holds approximately 43% of the outstanding capital stock of MLG. Dr. Byrne is also a member of the board of directors of MVI and is a member of the board of directors of MLG. The financial results of MLG are included in our consolidated financial statements. |
BROKER DEALERS
BROKER DEALERS | 12 Months Ended |
Dec. 31, 2018 | |
Brokers and Dealers [Abstract] | |
BROKER DEALERS | BROKER DEALERS tZERO wholly owns each of two broker dealers, SpeedRoute LLC ("SpeedRoute") and PRO Securities LLC ("PRO Securities"), which we acquired in January 2016. SpeedRoute is an electronic, agency-only, FINRA-registered broker dealer that provides connectivity for its customers to U.S. equity exchanges as well as off-exchange sources of liquidity such as dark pools. All of SpeedRoute's customers are registered broker dealers. SpeedRoute does not hold, own, or sell securities. PRO Securities is a FINRA-registered broker dealer that owns and operates the PRO Securities alternative trading system ("ATS"), which is registered with the SEC. An ATS is a trading system that is not regulated as an exchange, but is a licensed venue for matching buy and sell orders. The PRO Securities ATS is a closed system available only to its broker dealer subscribers. PRO Securities does not accept orders from non-broker dealers, nor does it hold, own, or sell securities. SpeedRoute and PRO Securities are subject to the SEC's Uniform Net Capital Rule (SEC Rule 15c3-1), which requires the maintenance of minimum net capital and requires that the ratio of aggregate indebtedness to net capital, both as defined, shall not exceed 15 to 1 and that equity capital may not be withdrawn or cash dividends paid if the resulting net capital ratio would exceed 10 to 1. At December 31, 2018 , SpeedRoute had net capital of $1,251,579 , which was $1,152,854 in excess of its required net capital of $98,725 and SpeedRoute's net capital ratio was 1.2 to 1. At December 31, 2018 , PRO Securities had net capital of $13,958 , which was $8,958 in excess of its required net capital of $5,000 and PRO Securities net capital ratio was 2 to 1. At December 31, 2017 , SpeedRoute had net capital of $334,848 , which was $233,485 in excess of its required net capital of $101,363 and SpeedRoute's net capital ratio was 4.5 to 1. At December 31, 2017 , PRO Securities had net capital of $24,175 , which was $19,175 in excess of its required net capital of $5,000 and PRO Securities net capital ratio was 1.3 to 1. SpeedRoute and PRO Securities did not have any securities owned or securities sold, not yet purchased at December 31, 2018 and 2017 . |
BUSINESS SEGMENTS
BUSINESS SEGMENTS | 12 Months Ended |
Dec. 31, 2018 | |
Segment Reporting [Abstract] | |
BUSINESS SEGMENTS | BUSINESS SEGMENTS Segment information has been prepared in accordance with ASC Topic 280 Segment Reporting. As described in Note 1—Basis of Presentation, we have recast our segment information to conform with current year presentation. We determined our segments based on how we manage our business. In the fourth quarter of 2018, we completed our review of our segment reporting and in light of a strategic shift in our Chief Operating Decision Maker's long-term strategic focus for our organization, we no longer consider the split of retail direct and retail partner as a distinct and relevant measure of our business. Accordingly, Direct and Partner are no longer considered separate reportable segments but are included under Retail in our Business Segment disclosures. Our Medici business includes one reportable segment, tZERO. We use pre-tax net income (loss) as the measure to determine our reportable segments. As a result, the remainder of our Medici business is not significant as compared to our Retail and tZERO segments. Our Other segment consists of Medici Ventures' remaining operations. Our Retail segment primarily consists of amounts earned through e-commerce sales through our Website. In addition, substantially all our corporate support costs (administrative functions such as finance, human resources, and legal) are included within our Retail segment. Our tZERO segment primarily consists of amounts earned through securities transaction through our broker-dealers and costs incurred to execute our tZERO business initiatives. 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 years ended December 31, 2018 , 2017 and 2016 . The following table summarizes information about reportable segments and a reconciliation to consolidated net income (loss) for the years ended December 31, 2018 , 2017 and 2016 (in thousands): Retail tZERO Other Total 2018 Revenue, net $ 1,800,187 $ 19,043 $ 2,362 $ 1,821,592 Cost of goods sold 1,452,195 13,127 2,362 1,467,684 Gross profit 347,992 5,916 — 353,908 Operating expenses 506,113 47,006 17,995 571,114 Interest and other income (expense), net (1) (476 ) 233 (2,505 ) (2,748 ) Pre-tax loss $ (158,597 ) $ (40,857 ) $ (20,500 ) (219,954 ) Benefit for income taxes (2,384 ) Net loss (2) $ (217,570 ) Retail tZERO Other Total 2017 Revenue, net $ 1,728,104 $ 16,493 $ 159 $ 1,744,756 Cost of goods sold 1,392,558 11,647 — 1,404,205 Gross profit 335,546 4,846 159 340,551 Operating expenses 365,648 17,101 4,436 387,185 Interest and other income (expense), net (1) 4,680 — (5,780 ) (1,100 ) Pre-tax loss $ (25,422 ) $ (12,255 ) $ (10,057 ) (47,734 ) Provision (benefit) for income taxes 64,188 Net loss (2) $ (111,922 ) 2016 Revenue, net $ 1,784,782 $ 15,181 $ — $ 1,799,963 Cost of goods sold 1,458,411 10,203 — 1,468,614 Gross profit 326,371 4,978 — 331,349 Operating expenses 307,669 15,826 939 324,434 Interest and other income (expense), net (1) 13,630 — — 13,630 Pre-tax income (loss) $ 32,332 $ (10,848 ) $ (939 ) 20,545 Provision (benefit) for income taxes 9,297 Net income (loss) (2) $ 11,248 ___________________________________________ (1) — The above amounts exclude intercompany transactions eliminated in consolidation, which consist primarily of service fees and interest. The net amounts of these intercompany transactions were $3.5 million , $2.0 million , and $594,000 for the years ended December 31, 2018 , 2017 and 2016 , respectively. (2) — Pre-tax income (loss) presented for segment reporting purposes is before any adjustments attributable to noncontrolling interests. For the years ended December 31, 2018 , 2017 and 2016 , substantially all our sales revenues were attributable to customers in the United States. At December 31, 2018 and 2017 , substantially all our fixed assets were located in the United States. |
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS | 12 Months Ended |
Dec. 31, 2018 | |
Subsequent Events [Abstract] | |
SUBSEQUENT EVENTS | SUBSEQUENT EVENTS On January 18, 2019, tZERO sold its entire equity interest in one of its equity method investments which had a carrying value of $5.8 million for $5.9 million . In February 2019, we executed a Memorandum of Understanding regarding a potential transaction involving an equity investment of up to $100 million in tZERO by GSR Capital and Makara Capital, and are in continuing discussions in furtherance thereof. |
QUARTERLY RESULTS OF OPERATIONS
QUARTERLY RESULTS OF OPERATIONS (unaudited) | 12 Months Ended |
Dec. 31, 2018 | |
Quarterly Financial Information Disclosure [Abstract] | |
QUARTERLY RESULTS OF OPERATIONS (unaudited) | QUARTERLY RESULTS OF OPERATIONS (unaudited) The following tables set forth our unaudited quarterly results of operations data for the eight most recent quarters for the period ended December 31, 2018 . We have prepared this information on the same basis as the consolidated statements of operations and the information includes all adjustments that we consider necessary for a fair statement of its financial position and operating results for the quarters presented. Three Months Ended March 31, 2018 June 30, 2018 September 30, 2018 December 31, (in thousands, except per share data) Consolidated Statement of Operations Data: Revenue, net Retail $ 439,996 $ 477,683 $ 435,775 $ 446,733 Other 5,335 5,450 4,805 5,815 Total net revenue 445,331 483,133 440,580 452,548 Cost of goods sold Retail 347,580 387,252 350,651 366,712 Other 3,882 4,138 3,213 4,256 Total cost of goods sold 351,462 391,390 353,864 370,968 Gross profit 93,869 91,743 86,716 81,580 Operating expenses: Sales and marketing 77,214 94,416 55,312 47,537 Technology 31,294 32,423 33,880 34,557 General and administrative 39,755 31,440 45,356 47,930 Total operating expenses 148,263 158,279 134,548 130,024 Operating loss (54,394 ) (66,536 ) (47,832 ) (48,444 ) Interest income 544 620 383 661 Interest expense (874 ) (395 ) (101 ) (98 ) Other income (expense), net (9 ) 368 (1,848 ) (1,999 ) Net loss before income taxes (54,733 ) (65,943 ) (49,398 ) (49,880 ) Benefit for income taxes (277 ) (27 ) (141 ) (1,939 ) Consolidated net loss (54,456 ) (65,916 ) (49,257 ) (47,941 ) Less: Net loss attributable to noncontrolling interests (3,547 ) (1,005 ) (1,334 ) (5,614 ) Net loss attributable to stockholders of Overstock.com, Inc. $ (50,909 ) $ (64,911 ) $ (47,923 ) $ (42,327 ) Net loss per common share—basic: Net loss attributable to common shares—basic $ (1.74 ) $ (2.20 ) $ (1.55 ) $ (1.39 ) Weighted average common shares outstanding—basic 28,566 28,903 30,279 32,112 Net loss per common share—diluted: Net loss attributable to common shares—diluted $ (1.74 ) $ (2.20 ) $ (1.55 ) $ (1.39 ) Weighted average common shares outstanding—diluted 28,566 28,903 30,279 32,112 Three Months Ended March 31, June 30, September 30, December 31, (in thousands, except per share data) Consolidated Statement of Operations Data: Revenue, net Retail $ 428,089 $ 427,955 $ 420,064 $ 451,996 Other 4,346 4,069 3,943 4,294 Total net revenue 432,435 432,024 424,007 456,290 Cost of goods sold Retail 342,260 345,039 337,698 367,561 Other 3,268 2,814 2,634 2,931 Total cost of goods sold 345,528 347,853 340,332 370,492 Gross profit 86,907 84,171 83,675 85,798 Operating expenses: Sales and marketing 37,618 43,297 45,153 54,521 Technology 28,992 28,244 28,746 29,896 General and administrative 22,610 22,361 21,651 24,096 Total operating expenses 89,220 93,902 95,550 108,513 Operating loss (2,313 ) (9,731 ) (11,875 ) (22,715 ) Interest income 125 136 189 209 Interest expense (710 ) (716 ) (713 ) (798 ) Other income (expense), net (3,724 ) 593 5,882 (1,573 ) Net loss before income taxes (6,622 ) (9,718 ) (6,517 ) (24,877 ) Provision (benefit) for income taxes (340 ) (1,975 ) (5,412 ) 71,915 Consolidated net loss (6,282 ) (7,743 ) (1,105 ) (96,792 ) Less: Net loss attributable to noncontrolling interests (379 ) (244 ) (319 ) (1,102 ) Net income (loss) attributable to stockholders of Overstock.com, Inc. $ (5,903 ) $ (7,499 ) $ (786 ) $ (95,690 ) Net income (loss) per common share—basic: Net income (loss) per share—basic $ (0.23 ) $ (0.29 ) $ (0.03 ) $ (3.72 ) Weighted average common shares outstanding—basic 25,290 24,996 25,003 25,103 Net income (loss) per common share—diluted: Net income (loss) per share—diluted $ (0.23 ) $ (0.29 ) $ (0.03 ) $ (3.72 ) Weighted average common shares outstanding—diluted 25,290 24,996 25,003 25,103 |
Schedule II Valuation and Quali
Schedule II Valuation and Qualifying Accounts | 12 Months Ended |
Dec. 31, 2018 | |
Valuation and Qualifying Accounts [Abstract] | |
Schedule II Valuation and Qualifying Accounts | Schedule II Valuation and Qualifying Accounts (in thousands) Balance at Beginning of Year Charged to Expense Deductions Balance at End of Year Year ended December 31, 2018 Deferred tax valuation allowance $ 63,278 $ 51,245 $ — $ 114,523 Allowance for sales returns 17,391 174,864 176,994 15,261 Allowance for doubtful accounts 1,253 883 20 2,116 Year ended December 31, 2017 Deferred tax valuation allowance $ 4,239 $ 59,039 $ — $ 63,278 Allowance for sales returns 18,176 169,398 170,183 17,391 Allowance for doubtful accounts 1,999 309 1,055 1,253 Year ended December 31, 2016 Deferred tax valuation allowance $ 3,071 $ 1,168 $ — $ 4,239 Allowance for sales returns 17,896 163,693 163,413 18,176 Allowance for doubtful accounts 465 1,608 74 1,999 |
ACCOUNTING POLICIES (Policies)
ACCOUNTING POLICIES (Policies) | 12 Months Ended |
Dec. 31, 2018 | |
Accounting Policies [Abstract] | |
Principles of consolidation | Principles of consolidation The accompanying consolidated financial statements include our accounts and the accounts of our wholly-owned subsidiaries and subsidiaries for which we exercise control. All intercompany account balances and transactions have been eliminated in consolidation. |
Use of estimates | Use of estimates The preparation of financial statements in conformity with generally accepted accounting principles 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, incentive discount offers, inventory valuation, depreciable lives of fixed assets and internally-developed software, goodwill valuation, intangible asset valuation, equity investment valuation, income taxes, stock-based compensation, performance-based compensation, self-funded health insurance liabilities, and contingencies. Although these estimates are based on our best knowledge of current events and actions that we may undertake in the future, actual results could differ materially from these estimates. |
Cash equivalents | Cash equivalents We classify all highly liquid instruments, including instruments with a remaining maturity of three months or less at the time of purchase, as cash equivalents. |
Restricted cash | Restricted cash We consider cash that is legally restricted and cash that is held as compensating balances for credit arrangements as restricted cash. |
Fair value of financial instruments | Fair value of financial instruments We account for our assets and liabilities using a hierarchy of valuation techniques based on whether the inputs to those valuation techniques are observable or unobservable. Observable inputs reflect market data obtained from independent sources, while unobservable inputs reflect our market assumptions. These two types of inputs have created the fair-value hierarchy below. This hierarchy requires us to minimize the use of unobservable inputs and to use observable market data, if available, when determining 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 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). |
Accounts receivable | Accounts receivable, net Accounts receivable consist primarily of carrier rebates, trade amounts due from customers in the United States, and uncleared credit card transactions at period end. Accounts receivable are recorded at invoiced amounts and do not bear interest. |
Allowance for doubtful accounts | From time to time, we grant credit to some of our business customers on normal credit terms (typically 30 days). We maintain an allowance for doubtful accounts receivable based upon our business customers' financial condition and payment history, and our historical collection experience and expected collectability of accounts receivable. |
Concentration of credit risk | Concentration of credit risk At December 31, 2018 and 2017 , one and two banks held the majority of our cash and cash equivalents. Our cash equivalents primarily consist of money market securities which are uninsured. We do not believe that, as a result of this concentration, we are subject to any unusual financial risk beyond the normal risk associated with commercial banking relationships. |
Valuation of inventories | Inventories, net Inventories, net include merchandise purchased for resale which are accounted for using a standard costing system which approximates the first-in-first-out ("FIFO") method of accounting, and are valued at the lower of cost and net realizable value. Inventory valuation requires us to make judgments, based on currently available information, about the likely method of disposition, such as through sales to individual customers, returns to product vendors, liquidations, and expected recoverable values of each disposition category. |
Prepaids and other current assets | Prepaids and other current assets Prepaids and other current assets represent expenses paid prior to receipt of the related goods or services, including advertising, license fees, maintenance, packaging, insurance, prepaid inventories, other miscellaneous costs, and cryptocurrency-denominated assets ("cryptocurrencies"). |
Fixed assets, net | Fixed assets, net Fixed assets are recorded at cost and stated net of depreciation and amortization. Fixed assets are depreciated using the straight-line method over the estimated useful lives of the related assets or the term of the related capital lease, whichever is shorter, as follows: Life (years) Building 40 Land improvements 20 Building machinery and equipment 15-20 Furniture and equipment 5-7 Computer hardware 3-4 Computer software, including internal-use software and website development 2-4 Leasehold improvements are amortized over the shorter of the term of the related leases or estimated useful lives. Included in fixed assets is the capitalized cost of internal-use software and website development, including software used to upgrade and enhance our Website and processes supporting our business. We capitalize costs incurred during the application development stage of internal-use software and amortize these costs over the estimated useful life. Costs incurred related to design or maintenance of internal-use software are expensed as incurred. |
Cost method investments | Equity investments under ASC 321 At December 31, 2018 , we held minority interests (less than 20%) in fourteen privately held entities, accounted for under ASC Topic 321, Investments - Equity Securities ("ASC 321"), which are included in Equity investments in our consolidated balance sheets. One of these equity investments, which had a carrying value of $2.6 million at December 31, 2018 , is carried at fair value based on Level 1 inputs. See Fair value of financial instruments above. The remaining equity investments lack readily determinable fair values and therefore the investments 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. Dividends received are reported in earnings if and when received. We review our investments individually for impairment by evaluating if events or circumstances have occurred that may indicate the fair value of the investment is less than its carrying value. If such events or circumstances have occurred, we estimate the fair value of the investment and recognize an impairment loss equal to the difference between the fair value of the investment and its carrying value. In such cases, the estimated fair value of the investment is determined using unobservable inputs including assumptions by the investee's management including quantitative information such as lower valuations in recently completed or proposed financings. These inputs are classified as Level 3. Because several of our investees are in the early startup or development stages, these entities are subject to potential changes in cash flows, valuation, and inability to attract new investors which may be necessary for the liquidity needed to support their operations. |
Equity method investments | Equity method investments under ASC 323 At December 31, 2018 , we held minority interests in privately held entities, accounted for as equity method investments under ASC Topic 323, Investments - Equity Method and Joint Ventures ("ASC 323"), which are included in Equity investments in our consolidated balance sheets. We can exercise significant influence, but not control, over the investees 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 investments and related ownership interest as of December 31, 2018 : Ownership interest Bitt Inc. 21% Spera, Inc. 19% Voatz, Inc. 13% SettleMint NV 30% Bitsy, Inc. 33% Chainstone Labs, Inc. 29% Minds, Inc. 24% VinX Network Ltd. 21% GrainChain, Inc. 10% StockCross Financial Services, Inc. 24% Boston Security Token Exchange LLC 50% Based on the nature of our ownership interests and the extent of our contributed capital, we have variable interests in certain of these entities. However, we have insufficient voting rights or other means to influence the investee such that we do not have power to direct the investee's activities that most significantly impact the economic performance of each entity. Further, we are not the investee's primary beneficiary and we therefore do not consolidate the investee in our financial statements. Our investments, plus any loans, off-balance sheet commitments, and other subordinated financial support related to these variable interest entities totaled $25.9 million and $3.7 million as of December 31, 2018 and 2017, respectively, representing our maximum exposures to loss. The carrying amount of our equity method investments was approximately $40.1 million and $6.5 million at December 31, 2018 and 2017 , respectively. The carrying value of our equity method investments exceeded the amount of the underlying equity in net assets of the investees and the difference was primarily related to goodwill and the fair value of intangible assets. The basis difference attributable to amortizable intangible assets is amortized over their estimated useful lives. We record our proportionate share of the net income or loss of the investee and the amortization of the basis difference related to intangible assets in Other income (expense), net in our consolidated statements of operations with corresponding adjustments to the carrying value of the investment. Our proportionate share of the net losses of our equity method investees and amortization of the basis difference for the years ended December 31, 2018 , 2017 and 2016 was $3.9 million , $0.5 million , and zero , respectively, and recognized in Other income (expense), net in our consolidated statements of operations. Noncontrolling interests Our wholly-owned subsidiary, Medici Ventures, Inc. ("Medici Ventures"), conducts its primary business through its majority-owned subsidiary, tZERO Group, Inc. ("tZERO"), formerly tØ.com, Inc., which includes a financial technology company, two related registered broker dealers, an accredited investor verification company, and certain strategic interests in other entities which support or align with tZERO's objectives and strategies. Medici Ventures, tZERO, and their respective consolidated subsidiaries are included in our consolidated financial statements. Intercompany transactions have been eliminated and the amounts of contributions and gains or losses that are attributable to the noncontrolling interests are disclosed in our consolidated financial statements. On December 18, 2017, tZERO launched an offering (the "security token offering") of the right to acquire tZERO Preferred Equity Tokens (the "tZERO Security Token") through a Simple Agreement for Future Equity ("SAFE"). The security token offering closed on August 6, 2018, and on October 12, 2018 tZERO issued the tZERO Security Tokens in settlement of the SAFEs. tZERO Security Token holders have the right to, prior to distributing earnings to tZERO common shareholders, a noncumulative dividend equal to 10% of tZERO's consolidated Adjusted Gross Revenue (as defined by the security token offering documents) for the most recently completed fiscal quarter , if declared by tZERO's Board of Directors, to be paid out of funds lawfully available on a quarterly basis. tZERO Security Token holders are not entitled to participate in any dividends paid to the holders of tZERO's common stock, have no rights to vote, and have no rights to the undistributed earnings of tZERO and are not entitled to any utility functionality as part of the tZERO Security Tokens. Any remaining undistributed earnings or losses of tZERO for a period shall be allocated to the noncontrolling interest held by the tZERO Security Token holders based on the contractual participation rights of the security to share in those earnings as if all the earnings for the period had been distributed. In the event of any liquidation, dissolution or winding up of tZERO, the tZERO Security Token holders will be entitled to the limited preferential liquidation rights equal to USD $0.10 per token to the extent funds are available . At December 31, 2018 , cumulative proceeds since December 18, 2017, net of withdrawals, from the security token offering totaling $104.8 million have been classified as a component of noncontrolling interest within our consolidated financial statements. Withdrawals during the security token offering period were $22.0 million . As of December 31, 2018 , tZERO incurred $21.5 million of offering costs associated with the security token offering that are classified as a reduction in proceeds within noncontrolling interest of our consolidated financial statements. During the first quarter of 2018, tZERO purchased 65.8% of ES Capital Advisors, LLC ("ES Capital"), a registered investment advisor under the Investment Advisers Act of 1940, which was accounted for as an asset acquisition. tZERO operated the ES Capital business under the name tZERO Advisors and offered automated investment advisory services on our Website. tZERO subsequently sold its equity interest in ES Capital during the fourth quarter of 2018. tZERO also purchased 81.0% of Verify Investor, LLC, an accredited investor verification company. This transaction is described further in Note 3—Acquisitions, Goodwill, and Acquired Intangible Assets. The financial position and results of operations for these entities are included in our consolidated financial statements. Medici Land Governance Inc., a Delaware public benefit corporation ("MLG"), was recently formed by Medici Ventures with our President and Chief Executive Officer, Dr. Patrick M. Byrne ("Dr. Byrne"). Pursuant to the Subscription Agreements dated September 21, 2018, Medici Ventures contributed certain of its assets, including intellectual property relating to technologies regarding land governance and property rights, to MLG in exchange for 510,000 shares of MLG common stock and at the same time Dr. Byrne personally contributed $6.7 million in cash to MLG in exchange for 390,000 shares of MLG common stock. As a result of the transactions described above, Medici Ventures holds approximately 57% of the outstanding capital stock of MLG, and Dr. Byrne holds approximately 43% of the outstanding capital stock of MLG. |
Leases | Leases We account for lease agreements as either operating or capital leases depending on certain defined criteria. In certain of our lease agreements, we receive rent holidays and other incentives. We recognize lease costs on a straight-line basis without regard to deferred payment terms, such as rent holidays, that defer the commencement date of required payments. Additionally, tenant improvement allowances are amortized as a reduction in rent expense over the term of the lease. Leasehold improvements are capitalized at cost and amortized over the lesser of their expected useful life or the term of the lease at inception, without assuming renewal features, if any, are exercised. |
Treasury stock | Treasury stock We account for treasury stock of our common shares under the cost method and include treasury stock as a component of stockholders' equity. |
Goodwill and intangible assets | Goodwill Goodwill represents the excess of the purchase price paid over the fair value of the net assets acquired in business combinations. Goodwill is not amortized but is tested for impairment at least annually or when we deem that a triggering event has occurred. When evaluating whether goodwill is impaired, we make a qualitative assessment to determine if it is more likely than not that the fair value of a reporting unit is less than its carrying amount. If the qualitative assessment determines that it is more likely than not that its fair value is less than its carrying amount, we compare the fair value of the reporting unit to which the goodwill is assigned to its carrying amount. If the carrying amount exceeds its fair value, an impairment loss is recognized in an amount equal to the excess of the carrying amount over the fair value of the reporting unit, not to exceed the carrying amount of the goodwill. There were no impairments to goodwill recorded during the years ended December 31, 2018 , 2017 and 2016 . For the year ended December 31, 2018 , we recognized $8.2 million in goodwill related to two business acquisitions as described in Note 3-Acquisitions, Goodwill, and Acquired Intangible Assets. Intangible assets other than goodwill We capitalize and amortize intangible assets other than goodwill over their estimated useful lives unless such lives are indefinite. Intangible assets other than goodwill acquired separately from third-parties are capitalized at cost while such assets acquired as part of a business combination are capitalized at their acquisition-date fair value. Indefinite-lived intangible assets are tested for impairment annually or more frequently when events or circumstances indicate that the carrying value more likely than not exceeds its fair value. In addition, we routinely evaluate the remaining useful life of intangible assets not being amortized to determine whether events or circumstances continue to support an indefinite useful life, including any legal, regulatory, contractual, competitive, economic, or other factors that may limit their useful lives. Definite lived intangible assets are amortized using the straight-line method of amortization over their useful lives, with the exception of certain intangibles (such as acquired technology, customer relationships, and trade names) which are amortized using an accelerated method of amortization based on cash flows. These definite lived intangible assets are reviewed for impairment whenever events or changes in circumstances indicate that their carrying amount may not be recoverable as described below under Impairment of long-lived assets . |
Impairment of long-lived assets | Impairment of long-lived assets We review property and equipment and other long-lived assets, including intangible assets other than goodwill, for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset group may not be recoverable. See the Cryptocurrencies section above for our impairment policy over cryptocurrencies. Recoverability is measured by comparison of the assets' carrying amount to future undiscounted net cash flows the asset group is expected to generate. Cash flow forecasts are based on trends of historical performance and management's estimate of future performance, giving consideration to existing and anticipated competitive and economic conditions. If such asset group is considered to be impaired, the impairment to be recognized is measured by the amount by which the carrying amount of the assets exceeds their fair values. |
Cryptocurrencies | Cryptocurrencies We hold cryptocurrency-denominated assets ("cryptocurrencies") such as bitcoin and we include them in Prepaids and other current assets in our consolidated balance sheets. Our cryptocurrencies were $2.4 million and $1.5 million at December 31, 2018 and 2017 , respectively, and are recorded at cost less impairment. We recognize impairment on these assets caused by decreases in market value, determined by taking quoted prices from various digital currency exchanges with active markets, whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. See Fair value of financial instruments above. Such impairment in the value of our cryptocurrencies is recorded in General and administrative expense in our consolidated statements of operations. Impairments on cryptocurrencies were $10.5 million for the year ended December 31, 2018 . There was no impairment on cryptocurrencies during the years ended December 31, 2017 and 2016 . Gains and losses realized upon sale of cryptocurrencies are also recorded in General and administrative expense in our consolidated statements of operations. We occasionally use our cryptocurrencies to purchase other cryptocurrencies. Gains and losses realized with these non-cash transactions are also recorded in General and administrative expense in our consolidated statements of operations. These non-cash transactions as well as gains (losses) from cryptocurrencies received through our tZERO security token offering are also presented as an adjustment to reconcile Consolidated net income (loss) to Net cash provided by (used in) operating activities in our consolidated statements of cash flows. Further, the proceeds from the sale of cryptocurrencies received through our tZERO security token offering are presented as a financing activity in our consolidated statements of cash flows due to its near immediate conversion into cash and its economic similarity to the receipt of cash proceeds under the tZERO security token offering. Realized gains on sale of cryptocurrencies were $8.4 million for the year ended December 31, 2018 . |
Other long-term assets, net | Other long-term assets, net Other long-term assets, net consist primarily of long-term prepaid expenses and deposits. |
Derivative financial instruments | Derivative financial instruments In 2014, we entered into a loan agreement in connection with the construction of our new corporate headquarters. We began borrowing under the facility in October 2015. Because amounts borrowed on the loan carried a variable LIBOR-based interest rate, we were affected by changes in certain market conditions and as such, we used derivatives, in the form of interest rate swap agreements, as a risk management tool to mitigate the potential impact of these changes. In November 2017, we repaid the outstanding balance of the underlying loans and concurrently terminated the derivative instruments. To the extent that the hedges were effective, the changes in fair values of our cash flow hedges were recorded in Accumulated other comprehensive income (loss) in the consolidated statements of changes in stockholders' equity. The variable-rate interest on the borrowing for our new corporate headquarters was capitalized during the construction period and is reclassified into earnings over the depreciable life of the asset. |
Revenue recognition | Revenue recognition As further discussed below in Recently adopted accounting standards , the Company adopted ASC 606 effective at the beginning of fiscal 2018. Refer to Note 2 - Summary of Significant Accounting Policies of the Company’s annual report on Form 10-K for the year ended December 30, 2017 for policies in effect for revenue recognition prior to December 31, 2017, which were based on ASC 605. Revenue is recognized when, or as, control of a promised product or service transfers to a customer, in an amount that reflects the consideration to which the Company expects to be entitled in exchange for transferring those products or services. Revenue excludes taxes that have been assessed by governmental authorities and that are directly imposed on revenue-producing transactions between the Company and its customers, including sales and use taxes. Revenue recognition is evaluated through the following five-step process: 1) identification of the contract with a customer; 2) identification of the performance obligations in the contract; 3) determination of the transaction price; 4) allocation of the transaction price to the performance obligations in the contract; and 5) recognition of revenue when or as a performance obligation is satisfied. Product Revenue We derive our revenue primarily from our retail business through our Website, but may also derive revenue from sales of merchandise through offline and other channels. Our Retail revenue is derived primarily from merchandise sold at a point in time and shipped to customers. Merchandise sales are fulfilled with inventory sourced through our partners or from our owned inventory, depending on the most efficient means of fulfilling the customer contract. The majority of our sales, however, are fulfilled from inventory sourced through our partners. Revenue is recognized when control of the product passes to the customer, typically at the date of delivery of the merchandise to the customer or the date a service is provided, and is recognized in an amount that reflects the expected consideration to be received in exchange for such goods or services. As such, customer orders are recorded as deferred revenue prior to delivery of products or services ordered. As we ship high volumes of packages through multiple carriers, it is not practical for us to track the actual delivery date of each shipment. Therefore, we use estimates to determine which shipments are delivered and, therefore, recognized as revenue at the end of the period. Our delivery date estimates are based on average shipping transit times, which are calculated using the following factors: (i) the type of shipping carrier (as carriers have different in-transit times); (ii) the fulfillment source (either our warehouses, those warehouses we control, or those of our partners); (iii) the delivery destination; and (iv) actual transit time experience, which shows that delivery date is typically one to eight business days from the date of shipment. We review and update our estimates on a quarterly basis based on our actual transit time experience. However, actual shipping times may differ from our estimates. Generally, we require authorization from credit card or other payment vendors whose services we offer to our customers (such as PayPal), or verification of receipt of payment, before we ship products to consumers or business purchasers. From time to time we grant credit to our business purchasers with normal credit terms (typically 30 days). We generally receive payments from our customers before our payments to our suppliers are due. We do not recognize assets associated with costs to obtain or fulfill a contract with a customer. Shipping and handling is considered a fulfillment activity, as it takes place prior to the customer obtaining control of the merchandise, and fees charged to customers are included in net revenue upon completion of our performance obligation. We present revenue net of sales taxes, discounts, and expected refunds. Our merchandise sales contracts include terms that could cause variability in the transaction price for items such as discounts, credits, or sales returns. Accordingly, the transaction price for product sales includes estimates of variable consideration to the extent it is probable that a significant reversal of revenue recognized will not occur. At the time of sale, we estimate a sales return liability for the variable consideration based on historical experience, which is recorded within Accrued liabilities in the consolidated balance sheet. We record an allowance for returns based on current period revenues and historical returns experience. We analyze actual historical returns, current economic trends and changes in order volume and acceptance of our products when evaluating the adequacy of the sales returns allowance in any accounting period. We evaluate the criteria outlined in ASC 606-10-55, Principal versus Agent Considerations , in determining whether it is appropriate to record the gross amount of merchandise sales and related costs or the net amount earned as commissions. When we are the principal in a transaction and control the specific good or service before it is transferred to the customer, revenue is recorded gross; otherwise, revenue is recorded on a net basis. Through contractual terms with our partners, we have the ability to control the promised goods or services and as a result record the majority of our retail revenue on a gross basis. Our Other revenue occurs primarily through our broker dealer subsidiaries in our tZERO segment. We evaluate the revenue recognition criteria above for our broker dealer subsidiaries and we recognize revenue based on the gross amount of consideration that we expect to receive on securities transactions (commission revenue) on a trade date basis. Club O loyalty program We have a customer loyalty program called Club O Gold for which we sell annual memberships. For Club O Gold memberships, we record membership fees as deferred revenue and we recognize revenue ratably over the membership period. The Club O Gold loyalty program allows members to earn Club O Reward dollars for qualifying purchases made on our Website. We also have a co-branded credit card program which provides Club O Gold members additional reward dollars for purchases made on our Website, and from other merchants. Under these programs, the customer may redeem Club O Reward dollars on future purchases made through our Website, which conveys a material right to the customer. As such, the initial transaction price giving rise to the reward dollar is allocated to each separate performance obligation based upon its relative standalone selling price. In determining the stand-alone selling price, we incorporate assumptions about the redemption rates of loyalty points. We recognize revenue for Club O Reward dollars when customers redeem such rewards as part of a purchase on our Website. We record the standalone value of reward dollars earned in deferred revenue at the time the reward dollars are earned. Club O Reward dollars expire 90 days after the customer's Club O Gold membership expires. We recognize estimated reward dollar breakage, to which we expect to be entitled, over the expected redemption period in proportion to actual redemptions by customers. Upon adoption of Topic 606, Revenue Contracts with Customers , on January 1, 2018, we began classifying the breakage income related to Club O Reward dollars and gift cards as a component of Retail revenue in our consolidated statements of operations rather than as a component of Other income (expense), net. Breakage included in revenue was $5.6 million for the year ended December 31, 2018 . We also recognized a cumulative adjustment that reduced Accumulated deficit by approximately $5.0 million upon adoption related to the unredeemed portion of our gift cards and loyalty program rewards. Our total deferred revenue related to the outstanding Club O Reward dollars was $6.9 million and $8.7 million at December 31, 2018 and December 31, 2017 , respectively. The timing of revenue recognition of these reward dollars is driven by actual customer activities, such as redemptions and expirations. Advertising Revenue Advertising revenues are derived primarily from sponsored links and display advertisements that are placed on our Website, distributed via email, or sent out as direct mailers. Advertising revenue is recognized in Retail revenue when the advertising services are rendered. Advertising revenues were less than 2% of total net revenues for all periods presented. Revenue Disaggregation Disaggregation of revenue by major product line is included in Segment Information in Note 21 - Business Segments. Deferred Revenue When the timing of our provision of goods or services is different from the timing of the payments made by our customers, we recognize a contract liability (customer payment precedes performance). Customer orders are recorded as deferred revenue prior to delivery of products or services ordered. We record amounts received for Club O Gold membership fees as deferred revenue and we recognize it ratably over the membership period. We record Club O Reward dollars earned from purchases as deferred revenue at the time they are earned based upon the relative standalone selling price of the Club O Reward dollar and we recognize it as Retail revenue in proportion to the estimated pattern of rights exercised by the customer. If reward dollars are not redeemed, we recognize Retail revenue upon expiration. In addition, we sell gift cards and record related deferred revenue at the time of the sale. We sell gift cards without expiration dates and we recognize revenue from a gift card upon redemption of the gift card. For the unredeemed portion of our gift cards and loyalty program rewards, we will recognize Retail revenue over the expected redemption period based upon the estimated pattern of rights exercised by the customer. The following table provides information about deferred revenue from contracts with customers, including significant changes in deferred revenue balances during the period (in thousands). Amount Deferred revenue at December 31, 2017 $ 46,468 Increase due to deferral of revenue at period end 43,216 Decrease due to beginning contract liabilities recognized as revenue (39,106 ) Deferred revenue at December 31, 2018 $ 50,578 |
Sales returns allowance | Sales returns allowance We inspect returned items when they arrive at our processing facilities. We refund the full cost of the merchandise returned and all original shipping charges if the returned item is defective or we or our partners have made an error, such as shipping the wrong product. If the return is not a result of a product defect or a fulfillment error and the customer initiates a return of an unopened item within 30 days of delivery, for most products we refund the full cost of the merchandise minus the original shipping charge and actual return shipping fees. However, we reduce refunds for returns initiated more than 30 days after delivery or that are received at our returns processing facility more than 45 days after initial delivery. If our customer returns an item that has been opened or shows signs of wear, we issue a partial refund minus the original shipping charge and actual return shipping fees. Revenue is recorded net of estimated returns. We record an allowance for returns based on current period revenues and historical returns experience. We analyze actual historical returns, current economic trends and changes in order volume and acceptance of our products when evaluating the adequacy of the sales returns allowance in any accounting period. |
Cost of goods sold | Cost of goods sold Our Retail cost of goods sold includes product costs, warehousing costs, outbound shipping costs, handling and fulfillment costs, customer service costs, and credit card fees, and is recorded in the same period in which related revenues have been recorded. |
Advertising expense | Advertising expense We expense the costs of producing advertisements the first time the advertising takes place and expense the cost of communicating advertising in the period during which the advertising space or airtime is used. Internet advertising expenses are recognized as incurred based on the terms of the individual agreements, which are generally: 1) a commission for traffic driven to our Website that generates a sale or 2) a referral fee based on the number of clicks on keywords or links to our Website generated during a given period. |
Stock-based compensation | Stock-based compensation We measure compensation expense for all outstanding unvested share-based awards at fair value on the date of grant and recognize compensation expense over the service period for awards at the greater of a straight-line basis or on an accelerated schedule when vesting of the share-based awards exceeds a straight-line basis. 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. See Note 15—Stock-Based Awards. |
Loss contingencies | Loss contingencies In the normal course of business, we are involved in legal proceedings and other potential loss contingencies. We accrue a liability for such matters when it is probable that a loss has been incurred and the amount can be reasonably estimated. When only a range of probable loss can be estimated, the most probable amount in the range is accrued. If no amount within this range is a better estimate than any other amount within the range, the minimum amount in the range is accrued. We expense legal fees as incurred (see Note 12—Commitments and Contingencies). |
Income taxes | Income taxes Income taxes are accounted for under the asset and liability method, which requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the financial statements. Under this method, deferred tax assets and liabilities are determined on the basis of the differences between the financial statements and tax bases of assets and liabilities using enacted tax rates in effect for the year in which the differences are expected to reverse. The effect of a change in tax rates on deferred tax assets and liabilities is recognized in income in the period that includes the enactment date. We recognize deferred tax assets to the extent that we believe these assets are more likely than not to be realized. In evaluating our ability to recover our deferred tax assets within the jurisdiction from which they arise, we consider all available positive and negative evidence, including projected future taxable income, scheduled reversals of our deferred tax liabilities, tax planning strategies, and results of recent operations. We record uncertain tax positions in accordance with ASC 740 on the basis of a two-step process whereby (1) we determine whether it is more likely than not that the tax positions will be sustained on the basis of the technical merits of the position and (2) for those tax positions that meet the more-likely-than-not recognition threshold, we recognize the largest amount of tax benefit that is more than 50 percent likely to be realized upon ultimate settlement with the related tax authority. We recognize interest and penalties related to unrecognized tax benefits within the income tax expense line in the accompanying consolidated income statements. Accrued interest and penalties are included within the related tax liability line in our consolidated balance sheets. |
Net income (loss) per share | Net income (loss) per share In 2016, we issued shares of our Blockchain Voting Series A Preferred Stock and our Voting Series B Preferred Stock (collectively the "preferred shares"). These 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. |
Sales of warrants | Warrants On November 8, 2017, we issued warrants to purchase up to a combined aggregate of 3,722,188 shares of our common stock to two purchasers in privately negotiated transactions, for an aggregate purchase price of $6.5 million , net of issuance costs. The exercise price for the warrants was $40.45 per share of common stock. On December 29, 2017, one of the warrant holders exercised its warrant in full and purchased a total of 2,472,188 shares of common stock for $100.0 million . On January 17, 2018, the other warrant holder exercised its warrant in full and purchased 1,250,000 shares of common stock for $50.6 million . |
New accounting pronouncements | Recently adopted accounting standards In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers (Topic 606) , which requires an entity to recognize the amount of revenue to which it expects to be entitled for the transfer of promised goods or services to customers. We adopted the new standard on January 1, 2018 with a cumulative adjustment that reduced Accumulated deficit by approximately $5.0 million as opposed to retrospectively adjusting prior periods. The adjustment primarily relates to the unredeemed portion of our gift cards and loyalty program rewards, which we will recognize over the expected redemption period, rather than waiting until the likelihood of redemption becomes remote or the rewards expire. We have also updated revenue disclosures in the notes to our financial statements as required under the new standard. The implementation did not impact our gross and net recognition for our revenue transactions. In addition, we continue to recognize revenue related to merchandise sales upon delivery to our customers. However, we now present breakage on our Club O Rewards and gift cards in Retail revenue in our consolidated statement of operations rather as a component of Other income (expense), net. In January 2016, the FASB issued ASU 2016-01, Financial Instruments-Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities , which requires equity investments previously recognized under the cost method to be measured at cost minus impairment, if any, plus or minus changes resulting from observable price changes in orderly transactions for the identical or similar investment of the same issuer. We adopted the changes under the new standard on January 1, 2018 on a prospective basis. The implementation of ASU 2016-01 did not have a material impact on our consolidated financial statements and related disclosures. In November 2016, the FASB issued ASU 2016-18, Statement of Cash Flows (Topic 230): Restricted Cash , which requires amounts generally described as restricted cash be included with cash and cash equivalents when reconciling beginning-of-period and end-of-period total amounts shown in the statement of cash flows. We adopted the new standard on January 1, 2018 retrospectively to each period presented in the statement of cash flows. The implementation of ASU 2016-18 did not have a material impact on our consolidated financial statements and related disclosures. In January 2017, the FASB issued ASU 2017-01, Business Combinations (Topic 805): Clarifying the Definition of a Business, which provides guidance to assist entities with evaluating whether transactions should be accounted for as acquisitions (or disposals) of assets or businesses. We adopted the changes under the new standard on January 1, 2018 on a prospective basis. The implementation of ASU 2017-01 did not have a material impact on our consolidated financial statements and related disclosures. In January 2017, the FASB issued ASU No. 2017-04, Intangibles — Goodwill and Other (Topic 350) — Simplifying the Test for Goodwill Impairment . The ASU simplifies the quantitative goodwill impairment test by eliminating the second step of the test. Under this ASU, impairment will be measured by comparing the estimated fair value of the reporting unit with its carrying value. We early adopted this ASU in the fourth quarter of 2018. Adoption of the ASU did not have a material impact on the results of our goodwill impairment test. Recently issued accounting standards In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842) , which requires lessees to recognize leases on-balance sheet and disclose key information about leasing arrangements. Topic 842 was subsequently amended by ASU No. 2018-01, Land Easement Practical Expedient for Transition to Topic 842; ASU No. 2018-10, Codification Improvements to Topic 842, Leases; and ASU No. 2018-11, Targeted Improvements. The new standard establishes a right-of-use model (ROU) that requires a lessee to recognize a ROU asset and lease liability on the balance sheet for all leases with a term longer than 12 months. Leases will be classified as finance or operating, with classification affecting the pattern and classification of expense recognition in the income statement. The new standard is effective for us on January 1, 2019. A modified retrospective transition approach is required, applying the new standard to all leases existing at the date of initial application. An entity may choose to use either (1) its effective date or (2) the beginning of the earliest comparative period presented in the financial statements as its date of initial application. If an entity chooses the second option, the transition requirements for existing leases also apply to leases entered into between the date of initial application and the effective date. The entity must also recast its comparative period financial statements and provide the disclosures required by the new standard for the comparative periods. We expect to adopt the new standard on January 1, 2019 and use the effective date as our date of initial application. Consequently, financial information will not be updated and the disclosures required under the new standard will not be provided for dates and periods before January 1, 2019. The new standard provides a number of optional practical expedients in transition. We expect to elect the "package of practical expedients", which permits us not to reassess under the new standard our prior conclusions about lease identification, lease classification and initial direct costs as well as the practical expedient pertaining to land easements. We do not expect to elect the use-of-hindsight practical expedient. We expect that this standard will have a material effect on our financial statements. While we continue to assess all of the effects of adoption, we currently believe the most significant effects relate to (1) the recognition of new ROU assets and lease liabilities on our balance sheet for our warehouse, office, and equipment operating leases; and (2) providing significant new disclosures about our leasing activities. On adoption, we currently expect to recognize additional operating liabilities which includes the present value of the total amount disclosed in "Note 12—Commitments and Contingencies", which constitute the remaining minimum rental payments under current leasing standards for our existing operating leases, discounted by our incremental borrowing rate for borrowings of a similar duration on a fully secured basis, with corresponding ROU assets of approximately the same amount. The new standard also provides practical expedients for an entity's ongoing accounting. We currently expect to elect the short-term lease recognition exemption for all leases that qualify. This means, for those leases that qualify, we will not recognize ROU assets or lease liabilities, and this includes not recognizing ROU assets or lease liabilities for existing short-term leases of those assets in transition. We also currently expect to elect the practical expedient to not separate lease and non-lease components for all of our leases. In June 2018, the FASB issued ASU 2018- 07, Compensation-Stock Compensation (Topic 718): Improvements to Nonemployee Share-Based Payment Accounting; which aligns the measurement and classification guidance for share-based payments to nonemployees with the guidance for share-based payments to employees, with certain exceptions. Under the guidance, the measurement of equity-classified nonemployee awards will be fixed at the grant date. The new standard becomes effective for us on January 1, 2019. We do not expect the adoption to have a material impact on our consolidated financial statements and related disclosures. |
ACCOUNTING POLICIES (Tables)
ACCOUNTING POLICIES (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Accounting Policies [Abstract] | |
Schedule of fair value of financial instruments using levels of inputs | The following tables summarize our assets and liabilities measured at fair value on a recurring basis using the following levels of inputs as of December 31, 2018 and 2017 , as indicated (in thousands): Fair Value Measurements at December 31, 2018: Total Level 1 Level 2 Level 3 Assets: Cash equivalents - Money market mutual funds $ 3,135 $ 3,135 $ — $ — Investment in equity securities, at fair value 2,636 2,636 — — Trading securities held in a "rabbi trust" (1) 84 84 — — Total assets $ 5,855 $ 5,855 $ — $ — Liabilities: Deferred compensation accrual "rabbi trust" (2) $ 85 $ 85 $ — $ — Total liabilities $ 85 $ 85 $ — $ — Fair Value Measurements at December 31, 2017: Total Level 1 Level 2 Level 3 Assets: Cash equivalents - Money market mutual funds $ 25,455 $ 25,455 $ — $ — Trading securities held in a "rabbi trust" (1) 74 74 — — Total assets $ 25,529 $ 25,529 $ — $ — Liabilities: Deferred compensation accrual "rabbi trust" (2) 92 92 — — Total liabilities $ 92 $ 92 $ — $ — ___________________________________________ (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. |
Schedule of estimated useful lives of the fixed assets | Fixed assets are depreciated using the straight-line method over the estimated useful lives of the related assets or the term of the related capital lease, whichever is shorter, as follows: Life (years) Building 40 Land improvements 20 Building machinery and equipment 15-20 Furniture and equipment 5-7 Computer hardware 3-4 Computer software, including internal-use software and website development 2-4 |
Schedule of depreciation and amortization expense which is classified within the corresponding operating expense categories on the consolidated statements of income | Depreciation expense is classified within the corresponding operating expense categories in the consolidated statements of operations as follows (in thousands): Year ended 2018 2017 2016 Cost of goods sold - retail $ 354 $ 307 $ 310 Technology 21,894 24,604 25,693 Sales and marketing — — 124 General and administrative 4,163 3,937 1,156 Total depreciation, including internal-use software and website development $ 26,411 $ 28,848 $ 27,283 |
Schedule of intangible assets | Intangible assets, net consist of the following (in thousands): December 31, 2018 2017 Intangible assets subject to amortization, gross (1) $ 29,099 $ 17,779 Less: accumulated amortization of intangible assets subject to amortization (15,729 ) (10,442 ) Total intangible assets, net $ 13,370 $ 7,337 |
Schedule of amortization expense of intangible assets | Amortization of intangible assets other than goodwill is classified within the corresponding operating expense categories in our consolidated statements of operations as follows (in thousands): Year ended 2018 2017 2016 Technology $ 3,424 $ 3,620 $ 2,904 Sales and marketing 460 83 1,008 General and administrative 1,402 296 56 Total amortization $ 5,286 $ 3,999 $ 3,968 |
Schedule of deferred revenues | The following table provides information about deferred revenue from contracts with customers, including significant changes in deferred revenue balances during the period (in thousands). Amount Deferred revenue at December 31, 2017 $ 46,468 Increase due to deferral of revenue at period end 43,216 Decrease due to beginning contract liabilities recognized as revenue (39,106 ) Deferred revenue at December 31, 2018 $ 50,578 |
Schedule of sales returns allowance | The following table provides additions to and deduction from the sales returns allowance (in thousands): Amount Allowance for returns at December 31, 2015 $ 17,896 Additions to the allowance 163,693 Deductions from the allowance (163,413 ) Allowance for returns at December 31, 2016 18,176 Additions to the allowance 169,398 Deductions from the allowance (170,183 ) Allowance for returns at December 31, 2017 17,391 Additions to the allowance 174,864 Deductions from the allowance (176,994 ) Allowance for returns at December 31, 2018 $ 15,261 |
Schedule of costs of goods sold, including product cost and other costs and fulfillment and related costs | ost of goods sold primarily consists of exchange fees, clearing agent fees, and other exchange fees from our broker dealer subsidiaries in our tZERO segment. These fees are primarily for executing, processing, and settling trades on exchanges and other venues. These fees fluctuate based on changes in trade and share volumes, rate of clearance fees charged by clearing brokers, and exchanges. Year ended 2018 2017 2016 Total revenue, net $ 1,821,592 100% $ 1,744,756 100% $ 1,799,963 100% Cost of goods sold Product costs and other cost of goods sold 1,390,750 76% 1,328,749 76% 1,391,736 77% Fulfillment and related costs 76,934 4% 75,456 4% 76,878 4% Total cost of goods sold 1,467,684 81% 1,404,205 80% 1,468,614 82% Gross profit $ 353,908 19% $ 340,551 20% $ 331,349 18% |
Schedule of computation of basic and diluted net income per common share | 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): Year ended December 31, 2018 2017 2016 Net income (loss) attributable to stockholders of Overstock.com, Inc. $ (206,070 ) $ (109,878 ) $ 12,522 Less: Preferred stock converted to common stock 3,098 — — Less: Preferred stock dividends - declared and accumulated 77 216 — Undistributed income (loss) (209,245 ) (110,094 ) 12,522 Less: Undistributed loss allocated to participating securities (4,368 ) (2,960 ) — Net income (loss) attributable to common shares $ (204,877 ) $ (107,134 ) $ 12,522 Net income (loss) per common share—basic: Net income (loss) attributable to common shares—basic $ (6.83 ) $ (4.28 ) $ 0.49 Weighted average common shares outstanding—basic 29,976 25,044 25,342 Effect of dilutive securities: Stock options and restricted stock awards — — 84 Weighted average common shares outstanding—diluted 29,976 25,044 25,426 Net income (loss) attributable to common shares—diluted $ (6.83 ) $ (4.28 ) $ 0.49 |
Schedule of anti-dilutive securities excluded from the calculation of diluted shares outstanding | The following shares were excluded from the calculation of diluted shares outstanding as their effect would have been anti-dilutive (in thousands): Year ended December 31, 2018 2017 2016 Stock options and restricted stock units 543 226 466 Common shares issuable under stock warrant 21 78 — |
ACQUISITIONS, GOODWILL, AND A_2
ACQUISITIONS, GOODWILL, AND ACQUIRED INTANGIBLE ASSETS (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Business Combinations [Abstract] | |
Estimated Fair Values of Assets Acquired and Liabilities Assumed | The fair values of the assets acquired and liabilities assumed at the acquisition date are as follows (in thousands): Purchase Price Fair Value Cash paid, net of cash acquired $ 11,769 Allocation Intangible assets $ 7,400 Goodwill 7,360 Other assets acquired 3 Other liabilities assumed (179 ) Total net assets, net of cash acquired 14,584 Less: noncontrolling interest (2,815 ) Total net assets attributable to tZERO, net of cash acquired $ 11,769 |
Intangible Assets Acquired and Useful Lives | The following table details the identifiable intangible assets acquired at their fair value and remaining useful lives as of December 31, 2018 (amounts in thousands): Intangible Assets Fair Value Weighted Average Useful Life (years) Technology and developed software $ 6,300 10 Trade names 700 10 Customer relationships 400 0.5 Total acquired intangible assets as of the acquisition date 7,400 Less: accumulated amortization of acquired intangible assets 1,105 Total acquired intangible assets, net $ 6,295 |
ACCOUNTS RECEIVABLE (Tables)
ACCOUNTS RECEIVABLE (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Receivables [Abstract] | |
Schedule of accounts receivable | Accounts receivable, net consist of the following (in thousands): December 31, 2018 2017 Freight rebates receivable $ 11,729 $ 8,527 Accounts receivable, trade 10,380 8,317 Credit card receivables 8,924 8,480 Other receivables 7,013 6,009 38,046 31,333 Less: allowance for doubtful accounts (2,116 ) (1,253 ) Accounts receivable, net $ 35,930 $ 30,080 |
INVENTORIES (Tables)
INVENTORIES (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Inventory Disclosure [Abstract] | |
Schedule of inventories | Inventories, net consist of the following (in thousands): December 31, 2018 2017 Product inventories, net $ 10,520 $ 8,844 Inventory in-transit 3,588 4,859 Total inventories, net $ 14,108 $ 13,703 |
PREPAIDS AND OTHER ASSETS (Tabl
PREPAIDS AND OTHER ASSETS (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | |
Schedule of prepaid and other assets | Prepaids and other current assets consist of the following (in thousands): December 31, 2018 2017 Prepaid maintenance $ 7,373 $ 7,427 Prepaid other 7,573 5,684 Other current assets 3,322 1,577 Prepaid insurance 2,341 444 Prepaid advertising 961 987 Prepaid inventories 845 1,625 Total prepaids and other current assets $ 22,415 $ 17,744 |
FIXED ASSETS (Tables)
FIXED ASSETS (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Property, Plant and Equipment [Abstract] | |
Schedule of fixed assets | Fixed assets, net consist of the following (in thousands): December 31, 2018 2017 Computer hardware and software, including internal-use software and website development $ 215,412 $ 196,501 Building 69,266 69,169 Furniture and equipment 17,066 14,455 Land 12,781 12,781 Building machinery and equipment 9,713 8,356 Leasehold improvements 8,379 7,752 Land improvements 6,972 6,764 339,589 315,778 Less: accumulated depreciation (204,902 ) (186,435 ) Total fixed assets, net $ 134,687 $ 129,343 |
OTHER LONG-TERM ASSETS (Tables)
OTHER LONG-TERM ASSETS (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
OTHER LONG-TERM ASSETS | |
Schedule of other long-term assets | Other long-term assets, net consist of the following (in thousands): December 31, 2018 2017 Deposit on purchase of a business $ 8,000 $ — Other long-term assets 4,310 2,786 Prepaid expenses, long-term portion 2,154 1,430 Total other long-term assets, net $ 14,464 $ 4,216 |
ACCRUED LIABILITIES (Tables)
ACCRUED LIABILITIES (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Payables and Accruals [Abstract] | |
Schedule of accrued liabilities | Accrued liabilities consist of the following (in thousands): December 31, 2018 2017 Accounts payable accruals $ 15,872 $ 16,614 Allowance for returns 15,261 17,391 Accrued marketing expenses 14,150 25,959 Accrued compensation and other related costs 12,099 10,716 Accrued loss contingencies 10,940 608 Sales and other taxes payable 9,923 2,363 Accrued freight 5,343 5,040 Other accrued expenses 4,270 3,920 Total accrued liabilities $ 87,858 $ 82,611 |
DEFERRED REVENUE (Tables)
DEFERRED REVENUE (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Deferred Revenue Disclosure [Abstract] | |
Schedule of deferred revenue | Deferred revenue consists of the following (in thousands): December 31, 2018 2017 Payments received prior to product delivery $ 30,033 $ 24,632 Club O membership fees and reward points 11,709 11,761 Unredeemed gift cards 3,399 4,955 In store credits 4,707 4,489 Other 730 631 Total deferred revenue $ 50,578 $ 46,468 |
COMMITMENTS AND CONTINGENCIES (
COMMITMENTS AND CONTINGENCIES (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Commitments and Contingencies Disclosure [Abstract] | |
Summary of minimum future payments under all operating leases | Minimum future payments under all operating leases as of December 31, 2018 , are as follows (in thousands): Payments due by period: 2019 $ 8,822 2020 7,414 2021 7,654 2022 7,579 2023 6,677 Thereafter 19,571 $ 57,717 |
STOCK-BASED AWARDS (Tables)
STOCK-BASED AWARDS (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Schedule of Stock Based Compensation Expense | Stock-based compensation expense was as follows (in thousands): Years ended December 31, 2018 2017 2016 Overstock restricted stock awards $ 9,096 $ 4,056 $ 4,891 Medici Ventures stock options 412 21 — tZERO equity awards 4,848 — — Total stock-based compensation expense $ 14,356 $ 4,077 $ 4,891 |
Summary of stock option activity | The following is a summary of stock option activity (in thousands, except per share data): 2018 2017 2016 Shares Weighted Average Exercise Price Shares Weighted Average Exercise Price Shares Weighted Average Exercise Price Outstanding—beginning of year — $ — 156 $ 17.33 204 $ 17.27 Exercised — — (39 ) 16.90 (42 ) 17.08 Expired/Forfeited — — (117 ) 17.48 (6 ) 17.08 Outstanding—end of year — $ — — $ — 156 $ 17.33 Options exercisable at year-end — $ — — $ — 156 $ 17.33 |
Summary of restricted stock award activity | The following table summarizes restricted stock award activity (in thousands, except fair value data): 2018 2017 2016 Units Weighted Units Weighted Units Weighted Outstanding—beginning of year 540 $ 17.05 560 $ 17.46 349 $ 24.80 Granted at fair value 387 65.42 310 17.75 541 14.52 Vested (234 ) 17.68 (212 ) 19.58 (219 ) 22.57 Forfeited (134 ) 42.85 (118 ) 16.21 (111 ) 16.52 Outstanding—end of year 559 $ 44.08 540 $ 17.05 560 $ 17.46 |
OTHER INCOME (EXPENSE), NET (Ta
OTHER INCOME (EXPENSE), NET (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Other Income and Expenses [Abstract] | |
Schedule of other income, net | Other income (expense), net consisted of the following (in thousands): Years ended December 31, 2018 2017 2016 Club O Rewards and gift card breakage $ — $ 2,742 $ 16,808 Gain on investment in precious metals — 1,971 201 Loss on equity investments, net (2,843 ) (5,995 ) (2,850 ) Other (645 ) 2,460 22 Total other income (expense), net $ (3,488 ) $ 1,178 $ 14,181 |
INCOME TAXES (Tables)
INCOME TAXES (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Income Tax Disclosure [Abstract] | |
Schedule of income before income taxes | For financial reporting purposes, income (loss) before income taxes includes the following components (in thousands): Years ended December 31, 2018 2017 2016 United States $ (219,585 ) $ (48,039 ) $ 20,974 Foreign (369 ) 305 (429 ) Total income (loss) before income taxes $ (219,954 ) $ (47,734 ) $ 20,545 |
Schedule of provision (benefit) for income taxes | The provision (benefit) for income taxes for 2018 , 2017 and 2016 consists of the following (in thousands): Years ended December 31, 2018 2017 2016 Current: Federal $ (57 ) $ 365 $ 280 State (141 ) 280 1,264 Foreign 44 57 34 Total current (154 ) 702 1,578 Deferred: Federal (1,583 ) 56,350 7,311 State (645 ) 7,146 410 Foreign (2 ) (10 ) (2 ) Total deferred (2,230 ) 63,486 7,719 Total provision (benefit) for income taxes $ (2,384 ) $ 64,188 $ 9,297 |
Schedule of components of deferred tax assets and liabilities | The components of our deferred tax assets and liabilities as of December 31, 2018 and 2017 are as follows (in thousands): December 31, 2018 2017 Deferred tax assets: Net operating loss carryforwards $ 79,820 $ 29,350 Research and development tax credits 15,382 12,653 Accrued expenses 7,898 10,672 Reserves and other 5,345 1,480 Basis difference in investments 4,857 1,636 Fixed and intangible assets 2,493 8,068 Other tax credits 206 220 Gross deferred tax assets 116,001 64,079 Valuation allowance (114,523 ) (63,278 ) Total deferred tax assets 1,478 801 Deferred tax liabilities: Prepaid expenses (880 ) (788 ) Goodwill (489 ) (261 ) Fixed assets — — Total deferred tax liabilities (1,369 ) (1,049 ) Total deferred tax assets (liabilities), net $ 109 $ (248 ) |
Schedule of difference in income tax provision from amount computed by applying U.S. federal income tax rate of 35% to loss before income taxes | The provision (benefit) for income taxes for 2018 , 2017 and 2016 differ from the amounts computed by applying the U.S. federal income tax rate of 21% for 2018 and 35% for 2017 and 2016 to income (loss) before income taxes for the following reasons (in thousands): Year ended December 31, 2018 2017 2016 U.S. federal income tax provision (benefit) at statutory rate $ (46,190 ) $ (16,707 ) $ 7,191 State income tax expense, net of federal benefit (8,289 ) (2,480 ) 1,232 Research and development credit (1,734 ) (1,696 ) (1,078 ) Stock based compensation expense (1,260 ) 164 674 Other 1,652 581 110 Gain on subsidiary stock 2,192 — — Reduction in federal rate — 25,287 — Change in valuation allowance 51,245 59,039 1,168 Total provision (benefit) for income taxes $ (2,384 ) $ 64,188 $ 9,297 |
Schedule of reconciliation of beginning and ending tax contingencies, excluding interest and penalties | A reconciliation of the beginning and ending unrecognized tax benefits, excluding interest and penalties, as of December 31, 2018 , 2017 and 2016 is as follows (in thousands): Year ended December 31, 2018 2017 2016 Beginning balance $ 6,964 $ 7,333 $ 4,753 Additions for tax positions related to the current year 1,013 881 1,112 Additions (reductions) for tax positions taken in prior years 332 230 1,468 Reduction for tax positions settled by utilizing tax attributes (335 ) (1,480 ) — Ending balance $ 7,974 $ 6,964 $ 7,333 |
BUSINESS SEGMENTS (Tables)
BUSINESS SEGMENTS (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Segment Reporting [Abstract] | |
Summary of information about reportable segments | The following table summarizes information about reportable segments and a reconciliation to consolidated net income (loss) for the years ended December 31, 2018 , 2017 and 2016 (in thousands): Retail tZERO Other Total 2018 Revenue, net $ 1,800,187 $ 19,043 $ 2,362 $ 1,821,592 Cost of goods sold 1,452,195 13,127 2,362 1,467,684 Gross profit 347,992 5,916 — 353,908 Operating expenses 506,113 47,006 17,995 571,114 Interest and other income (expense), net (1) (476 ) 233 (2,505 ) (2,748 ) Pre-tax loss $ (158,597 ) $ (40,857 ) $ (20,500 ) (219,954 ) Benefit for income taxes (2,384 ) Net loss (2) $ (217,570 ) Retail tZERO Other Total 2017 Revenue, net $ 1,728,104 $ 16,493 $ 159 $ 1,744,756 Cost of goods sold 1,392,558 11,647 — 1,404,205 Gross profit 335,546 4,846 159 340,551 Operating expenses 365,648 17,101 4,436 387,185 Interest and other income (expense), net (1) 4,680 — (5,780 ) (1,100 ) Pre-tax loss $ (25,422 ) $ (12,255 ) $ (10,057 ) (47,734 ) Provision (benefit) for income taxes 64,188 Net loss (2) $ (111,922 ) 2016 Revenue, net $ 1,784,782 $ 15,181 $ — $ 1,799,963 Cost of goods sold 1,458,411 10,203 — 1,468,614 Gross profit 326,371 4,978 — 331,349 Operating expenses 307,669 15,826 939 324,434 Interest and other income (expense), net (1) 13,630 — — 13,630 Pre-tax income (loss) $ 32,332 $ (10,848 ) $ (939 ) 20,545 Provision (benefit) for income taxes 9,297 Net income (loss) (2) $ 11,248 ___________________________________________ (1) — The above amounts exclude intercompany transactions eliminated in consolidation, which consist primarily of service fees and interest. The net amounts of these intercompany transactions were $3.5 million , $2.0 million , and $594,000 for the years ended December 31, 2018 , 2017 and 2016 , respectively. (2) — Pre-tax income (loss) presented for segment reporting purposes is before any adjustments attributable to noncontrolling interests. |
QUARTERLY RESULTS OF OPERATIO_2
QUARTERLY RESULTS OF OPERATIONS (unaudited) (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Quarterly Financial Information Disclosure [Abstract] | |
Schedule of unaudited quarterly results of operations data | The following tables set forth our unaudited quarterly results of operations data for the eight most recent quarters for the period ended December 31, 2018 . We have prepared this information on the same basis as the consolidated statements of operations and the information includes all adjustments that we consider necessary for a fair statement of its financial position and operating results for the quarters presented. Three Months Ended March 31, 2018 June 30, 2018 September 30, 2018 December 31, (in thousands, except per share data) Consolidated Statement of Operations Data: Revenue, net Retail $ 439,996 $ 477,683 $ 435,775 $ 446,733 Other 5,335 5,450 4,805 5,815 Total net revenue 445,331 483,133 440,580 452,548 Cost of goods sold Retail 347,580 387,252 350,651 366,712 Other 3,882 4,138 3,213 4,256 Total cost of goods sold 351,462 391,390 353,864 370,968 Gross profit 93,869 91,743 86,716 81,580 Operating expenses: Sales and marketing 77,214 94,416 55,312 47,537 Technology 31,294 32,423 33,880 34,557 General and administrative 39,755 31,440 45,356 47,930 Total operating expenses 148,263 158,279 134,548 130,024 Operating loss (54,394 ) (66,536 ) (47,832 ) (48,444 ) Interest income 544 620 383 661 Interest expense (874 ) (395 ) (101 ) (98 ) Other income (expense), net (9 ) 368 (1,848 ) (1,999 ) Net loss before income taxes (54,733 ) (65,943 ) (49,398 ) (49,880 ) Benefit for income taxes (277 ) (27 ) (141 ) (1,939 ) Consolidated net loss (54,456 ) (65,916 ) (49,257 ) (47,941 ) Less: Net loss attributable to noncontrolling interests (3,547 ) (1,005 ) (1,334 ) (5,614 ) Net loss attributable to stockholders of Overstock.com, Inc. $ (50,909 ) $ (64,911 ) $ (47,923 ) $ (42,327 ) Net loss per common share—basic: Net loss attributable to common shares—basic $ (1.74 ) $ (2.20 ) $ (1.55 ) $ (1.39 ) Weighted average common shares outstanding—basic 28,566 28,903 30,279 32,112 Net loss per common share—diluted: Net loss attributable to common shares—diluted $ (1.74 ) $ (2.20 ) $ (1.55 ) $ (1.39 ) Weighted average common shares outstanding—diluted 28,566 28,903 30,279 32,112 Three Months Ended March 31, June 30, September 30, December 31, (in thousands, except per share data) Consolidated Statement of Operations Data: Revenue, net Retail $ 428,089 $ 427,955 $ 420,064 $ 451,996 Other 4,346 4,069 3,943 4,294 Total net revenue 432,435 432,024 424,007 456,290 Cost of goods sold Retail 342,260 345,039 337,698 367,561 Other 3,268 2,814 2,634 2,931 Total cost of goods sold 345,528 347,853 340,332 370,492 Gross profit 86,907 84,171 83,675 85,798 Operating expenses: Sales and marketing 37,618 43,297 45,153 54,521 Technology 28,992 28,244 28,746 29,896 General and administrative 22,610 22,361 21,651 24,096 Total operating expenses 89,220 93,902 95,550 108,513 Operating loss (2,313 ) (9,731 ) (11,875 ) (22,715 ) Interest income 125 136 189 209 Interest expense (710 ) (716 ) (713 ) (798 ) Other income (expense), net (3,724 ) 593 5,882 (1,573 ) Net loss before income taxes (6,622 ) (9,718 ) (6,517 ) (24,877 ) Provision (benefit) for income taxes (340 ) (1,975 ) (5,412 ) 71,915 Consolidated net loss (6,282 ) (7,743 ) (1,105 ) (96,792 ) Less: Net loss attributable to noncontrolling interests (379 ) (244 ) (319 ) (1,102 ) Net income (loss) attributable to stockholders of Overstock.com, Inc. $ (5,903 ) $ (7,499 ) $ (786 ) $ (95,690 ) Net income (loss) per common share—basic: Net income (loss) per share—basic $ (0.23 ) $ (0.29 ) $ (0.03 ) $ (3.72 ) Weighted average common shares outstanding—basic 25,290 24,996 25,003 25,103 Net income (loss) per common share—diluted: Net income (loss) per share—diluted $ (0.23 ) $ (0.29 ) $ (0.03 ) $ (3.72 ) Weighted average common shares outstanding—diluted 25,290 24,996 25,003 25,103 |
BASIS OF PRESENTATION (Details)
BASIS OF PRESENTATION (Details) | 12 Months Ended |
Dec. 31, 2018website | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Number of websites | 3 |
ACCOUNTING POLICIES - Summary o
ACCOUNTING POLICIES - Summary of Assets and Liabilities Measured at Fair Value (Details) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Assets: | ||
Cash equivalents - Money market mutual funds | $ 3,135 | $ 25,455 |
Equity Securities, FV-NI | 2,636 | |
Trading securities held in a "rabbi trust" | 84 | 74 |
Total assets | 5,855 | 25,529 |
Liabilities: | ||
Deferred compensation accrual "rabbi trust" | 85 | 92 |
Total liabilities | 85 | 92 |
Level 1 | ||
Assets: | ||
Cash equivalents - Money market mutual funds | 3,135 | 25,455 |
Equity Securities, FV-NI | 2,636 | |
Trading securities held in a "rabbi trust" | 84 | 74 |
Total assets | 5,855 | 25,529 |
Liabilities: | ||
Deferred compensation accrual "rabbi trust" | 85 | 92 |
Total liabilities | 85 | 92 |
Level 2 | ||
Assets: | ||
Cash equivalents - Money market mutual funds | 0 | 0 |
Equity Securities, FV-NI | 0 | |
Trading securities held in a "rabbi trust" | 0 | 0 |
Total assets | 0 | 0 |
Liabilities: | ||
Deferred compensation accrual "rabbi trust" | 0 | 0 |
Total liabilities | 0 | 0 |
Level 3 | ||
Assets: | ||
Cash equivalents - Money market mutual funds | 0 | 0 |
Equity Securities, FV-NI | 0 | |
Trading securities held in a "rabbi trust" | 0 | 0 |
Total assets | 0 | 0 |
Liabilities: | ||
Deferred compensation accrual "rabbi trust" | 0 | 0 |
Total liabilities | $ 0 | $ 0 |
ACCOUNTING POLICIES - Additiona
ACCOUNTING POLICIES - Additional Information (Details) | Sep. 21, 2018USD ($)shares | Jan. 17, 2018USD ($)shares | Dec. 29, 2017USD ($)shares | Nov. 08, 2017USD ($)$ / sharesshares | Sep. 30, 2018 | Dec. 31, 2018USD ($)banksubsidiary$ / shares | Dec. 31, 2017USD ($)bank | Dec. 31, 2016USD ($) | Mar. 31, 2018 |
Accounting Policies [Abstract] | |||||||||
Cash equivalents | $ 3,100,000 | $ 25,500,000 | |||||||
Normal credit term granted to customers | 30 days | 30 days | |||||||
Allowance for doubtful accounts receivable | $ 2,100,000 | $ 1,300,000 | |||||||
Number of banks who hold majority of cash and cash equivalents | bank | 1 | 2 | |||||||
Accounting Policies [Line Items] | |||||||||
Variable Interest Entity, Reporting Entity Involvement, Maximum Loss Exposure, Amount | $ 25,900,000 | $ 3,700,000 | |||||||
Gain (Loss) on Disposition of Intangible Assets | $ 3,200,000 | ||||||||
Noncumulative Dividend Percentage | 10.00% | ||||||||
Temporary Equity, Liquidation Preference Per Share | $ / shares | $ 0.10 | ||||||||
Cumulative Proceeds, Net of Withdrawals, Security Token Offering | $ 104,800,000 | ||||||||
Withdrawal Under Security Token Offering | 22,000,000 | ||||||||
Impairments of goodwill | 0 | 0 | $ 0 | ||||||
Unrealized Gain (Loss) on Investment of Precious Metals | 0 | ||||||||
Advertising expense | $ 249,700,000 | 164,600,000 | 135,100,000 | ||||||
Sales return period for which full refund will be granted | 30 days | ||||||||
Net other comprehensive income (loss) | $ 15,000 | 941,000 | (110,000) | ||||||
Other current assets | 3,322,000 | 1,577,000 | |||||||
Impairments of long-lived assets | 0 | 0 | 0 | ||||||
Impairment on indefinite-lived intangible assets | $ 6,000,000 | 0 | 0 | ||||||
Indefinite-Lived Intangible Asset, Useful Life | 0 years | ||||||||
Unrealized Gain (Loss) on Crytocurrency Holdings | $ (10,463,000) | 0 | |||||||
Gain (Loss) on Cryptocurrency Holdings | 8,370,000 | ||||||||
Gain on sale of cryptocurrencies | 0 | 0 | |||||||
Goodwill acquired during period | $ 8,200,000 | ||||||||
Number of cost method investments | 14 | ||||||||
Equity Securities, FV-NI | $ 2,636,000 | ||||||||
Carrying value of equity method investments | 40,100,000 | 6,500,000 | |||||||
Carrying value of cost method investments | 20,300,000 | 6,500,000 | |||||||
Equity Securities, FV-NI, Unrealized Gain | 1,121,000 | 0 | 0 | ||||||
Impairment of cost method investments | 511,000 | 5,487,000 | 2,850,000 | ||||||
Income (Loss) from Equity Method Investments | $ 3,900,000 | 500,000 | 0 | ||||||
Number of broker-dealer subsidiary (in subsidiary) | 2 | ||||||||
Capitalized Offering Costs for Security Token Offering | $ (21,500,000) | ||||||||
Number of warrants called | shares | 1,250,000 | 2,472,188 | 3,722,188 | ||||||
Proceeds from issuance of stock warrants | $ 6,462,000 | 50,588,000 | 106,462,000 | 0 | |||||
Warrant price (in usd per share) | $ / shares | $ 40.45 | ||||||||
Proceeds from exercise of stock warrants | $ 50,600,000 | $ 100,000,000 | |||||||
Gain (Loss) on Extinguishment of Debt | $ (283,000) | (2,464,000) | 0 | ||||||
Loyalty program expiration period | 90 days | ||||||||
Club O Rewards and gift card breakage | $ 0 | 2,742,000 | $ 16,808,000 | ||||||
Deferred revenue | $ 50,578,000 | $ 46,468,000 | |||||||
Advertising Revenue as a Percentage of Total Revenue | 2.00% | ||||||||
Maximum revenue from co-branded credit card program as a percentage of total net revenues | 1.00% | 1.00% | |||||||
Sales return period for which reduced refund will be granted | 30 days | ||||||||
Sales return received at returns processing facility for which reduced refund will be granted, period | 45 days | ||||||||
Prepaid advertising | $ 961,000 | $ 987,000 | |||||||
Amortization of intangible assets, 2019 | 5,600,000 | ||||||||
Amortization of intangible assets, 2020 | 2,800,000 | ||||||||
Amortization of intangible assets, 2021 | 2,400,000 | ||||||||
Amortization of intangible assets, 2022 | 1,200,000 | ||||||||
Amortization of intangible assets, 2023 | 700,000 | ||||||||
Amortization of intangibles, thereafter | $ 700,000 | ||||||||
Product delivery period from date of shipment, minimum | 1 day | ||||||||
Product delivery period from date of shipment, maximum | 8 days | ||||||||
Number of Acquisitions | 2 | ||||||||
Cryptocurrency, bitcoin | |||||||||
Accounting Policies [Line Items] | |||||||||
Other current assets | $ 2,393,000 | 1,512,000 | |||||||
Software Development | |||||||||
Accounting Policies [Line Items] | |||||||||
Capitalized costs | 19,300,000 | 9,600,000 | $ 15,900,000 | ||||||
Amortization of capitalized costs | 13,800,000 | 15,900,000 | 17,100,000 | ||||||
Medici Land Governance | |||||||||
Accounting Policies [Line Items] | |||||||||
Equity method investment, shares acquired (in shares) | shares | 510,000 | ||||||||
Proceeds from Noncontrolling Interests | $ 6,700,000 | ||||||||
Patrick Byrne | |||||||||
Accounting Policies [Line Items] | |||||||||
Equity method investment, shares acquired (in shares) | shares | 390,000 | ||||||||
ES Capital Advisors, LLC | tZero.com, Inc. | |||||||||
Accounting Policies [Line Items] | |||||||||
Ownership percentage | 65.80% | ||||||||
Patrick Byrne | Medici Land Governance | |||||||||
Accounting Policies [Line Items] | |||||||||
Sale of stock, percentage of ownership after transaction | 43.00% | ||||||||
Medici Ventures | Medici Land Governance | |||||||||
Accounting Policies [Line Items] | |||||||||
Sale of stock, percentage of ownership after transaction | 57.00% | ||||||||
Verify Investors, LLC | tZero.com, Inc. | |||||||||
Accounting Policies [Line Items] | |||||||||
Percentage of business acquired | 81.00% | ||||||||
Accumulated other comprehensive loss | |||||||||
Accounting Policies [Line Items] | |||||||||
Net other comprehensive income (loss) | 15,000 | 941,000 | $ (110,000) | ||||||
Cash Flow Hedging | Other Income | |||||||||
Accounting Policies [Line Items] | |||||||||
Gain (Loss) on Extinguishment of Debt | (1,400,000) | ||||||||
Accounting Standards Update 2014-09 | |||||||||
Accounting Policies [Line Items] | |||||||||
Cumulative effect of new accounting pronouncement in period of adoption | 5,000,000 | ||||||||
Club O Reward Points [Member] | |||||||||
Accounting Policies [Line Items] | |||||||||
Deferred revenue | 6,869,000 | $ 8,731,000 | |||||||
Retail | |||||||||
Accounting Policies [Line Items] | |||||||||
Club O Rewards and gift card breakage | $ 5,600,000 |
ACCOUNTING POLICIES - Fixed Ass
ACCOUNTING POLICIES - Fixed Assets, Depreciation Expense, Intangible Assets and Goodwill (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Property, Plant and Equipment [Line Items] | |||
Depreciation of fixed assets | $ 26,411 | $ 28,848 | $ 27,283 |
Intangible assets other than goodwill | |||
Total intangible assets, gross | 29,099 | 17,779 | |
Accumulated amortization of intangible assets | (15,729) | (10,442) | |
Total intangible assets, net | 13,370 | 7,337 | |
Amortization of intangible assets | $ 5,286 | 3,999 | 3,968 |
Weighted average remaining useful life for intangible assets | 5 years 6 months 16 days | ||
Cost of goods sold — retail | |||
Property, Plant and Equipment [Line Items] | |||
Depreciation of fixed assets | $ 354 | 307 | 310 |
Technology | |||
Property, Plant and Equipment [Line Items] | |||
Depreciation of fixed assets | 21,894 | 24,604 | 25,693 |
Intangible assets other than goodwill | |||
Amortization of intangible assets | 3,424 | 3,620 | 2,904 |
Sales and marketing | |||
Property, Plant and Equipment [Line Items] | |||
Depreciation of fixed assets | 0 | 0 | 124 |
Intangible assets other than goodwill | |||
Amortization of intangible assets | 460 | 83 | 1,008 |
General and administrative | |||
Property, Plant and Equipment [Line Items] | |||
Depreciation of fixed assets | 4,163 | 3,937 | 1,156 |
Intangible assets other than goodwill | |||
Amortization of intangible assets | $ 1,402 | $ 296 | $ 56 |
Building | |||
Property, Plant and Equipment [Line Items] | |||
Estimated useful life | 40 years | ||
Land improvements | |||
Property, Plant and Equipment [Line Items] | |||
Estimated useful life | 20 years | ||
Building machinery and equipment | Minimum | |||
Property, Plant and Equipment [Line Items] | |||
Estimated useful life | 15 years | ||
Building machinery and equipment | Maximum | |||
Property, Plant and Equipment [Line Items] | |||
Estimated useful life | 20 years | ||
Furniture and equipment | Minimum | |||
Property, Plant and Equipment [Line Items] | |||
Estimated useful life | 5 years | ||
Furniture and equipment | Maximum | |||
Property, Plant and Equipment [Line Items] | |||
Estimated useful life | 7 years | ||
Computer hardware | Minimum | |||
Property, Plant and Equipment [Line Items] | |||
Estimated useful life | 3 years | ||
Computer hardware | Maximum | |||
Property, Plant and Equipment [Line Items] | |||
Estimated useful life | 4 years | ||
Computer software | Minimum | |||
Property, Plant and Equipment [Line Items] | |||
Estimated useful life | 2 years | ||
Computer software | Maximum | |||
Property, Plant and Equipment [Line Items] | |||
Estimated useful life | 4 years |
ACCOUNTING POLICIES ACCOUNTING
ACCOUNTING POLICIES ACCOUNTING POLICIES - Schedule of Deferred Revenues (Details) $ in Thousands | 12 Months Ended |
Dec. 31, 2018USD ($) | |
Accounting Policies [Abstract] | |
Deferred revenue, beginning balance | $ 46,468 |
Increase due to deferral of revenue at period end | 43,216 |
Decrease due to beginning contract liabilities recognized as revenue | (39,106) |
Deferred revenue, ending balance | $ 50,578 |
ACCOUNTING POLICIES ACCOUNTIN_2
ACCOUNTING POLICIES ACCOUNTING POLICIES - Allowance for Sales Returns Rollforward (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Accounting Policies [Abstract] | |||
Allowance for returns, beginning of period | $ 17,391 | $ 18,176 | $ 17,896 |
Additions to the allowance | 174,864 | 169,398 | 163,693 |
Deductions from the allowance | (176,994) | (170,183) | (163,413) |
Allowance for returns, end of period | $ 15,261 | $ 17,391 | $ 18,176 |
ACCOUNTING POLICIES - Schedule
ACCOUNTING POLICIES - Schedule of Costs of Goods Sold (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Revenue recognition | |||||||||||
Product delivery period from date of shipment, minimum | 1 day | ||||||||||
Product delivery period from date of shipment, maximum | 8 days | ||||||||||
Club O loyalty program | |||||||||||
Loyalty program expiration period | 90 days | ||||||||||
Co-branded credit card program | |||||||||||
Maximum revenue from co-branded credit card program as a percentage of total net revenues | 1.00% | 1.00% | |||||||||
Sales returns allowance | |||||||||||
Sales return period for which full refund will be granted | 30 days | ||||||||||
Sales return period for which reduced refund will be granted | 30 days | ||||||||||
Sales return received at returns processing facility for which reduced refund will be granted, period | 45 days | ||||||||||
Cost of goods sold | |||||||||||
Total net revenue | $ 452,548 | $ 440,580 | $ 483,133 | $ 445,331 | $ 456,290 | $ 424,007 | $ 432,024 | $ 432,435 | $ 1,821,592 | $ 1,744,756 | $ 1,799,963 |
Total revenue, net (as a percent) | 100.00% | 100.00% | 100.00% | ||||||||
Cost of goods sold | |||||||||||
Product costs and other cost of goods sold | $ 1,390,750 | $ 1,328,749 | $ 1,391,736 | ||||||||
Fulfillment and related costs | 76,934 | 75,456 | 76,878 | ||||||||
Total cost of goods sold | 370,968 | 353,864 | 391,390 | 351,462 | 370,492 | 340,332 | 347,853 | 345,528 | $ 1,467,684 | $ 1,404,205 | $ 1,468,614 |
Product costs and other cost of goods sold (as a percent) | 76.00% | 76.00% | 77.00% | ||||||||
Fulfillment and related costs (as a percent) | 4.00% | 4.00% | 4.00% | ||||||||
Total cost of goods sold (as a percent) | 81.00% | 80.00% | 82.00% | ||||||||
Gross profit | $ 81,580 | $ 86,716 | $ 91,743 | $ 93,869 | $ 85,798 | $ 83,675 | $ 84,171 | $ 86,907 | $ 353,908 | $ 340,551 | $ 331,349 |
Gross profit (as a percent) | 19.00% | 20.00% | 18.00% |
ACCOUNTING POLICIES - Computati
ACCOUNTING POLICIES - Computation of Basic and Diluted Net Income (Loss) (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Earnings per share | |||||||||||
Consolidated net income | $ (42,327) | $ (47,923) | $ (64,911) | $ (50,909) | $ (95,690) | $ (786) | $ (7,499) | $ (5,903) | $ (206,070) | $ (109,878) | $ 12,522 |
Less: Preferred stock converted to common stock | 3,098 | 0 | 0 | ||||||||
Less: Preferred stock dividends - declared and accumulated | 77 | 216 | 0 | ||||||||
Undistributed income (loss) | (209,245) | (110,094) | 12,522 | ||||||||
Less: Undistributed loss allocated to participating securities | (4,368) | (2,960) | 0 | ||||||||
Net income (loss) attributable to common shares | $ (204,877) | $ (107,134) | $ 12,522 | ||||||||
Net income (loss) per common share—basic: | |||||||||||
Net income (loss) attributable to common shares-basic (in dollars per share) | $ (1.39) | $ (1.55) | $ (2.20) | $ (1.74) | $ (3.72) | $ (0.03) | $ (0.29) | $ (0.23) | $ (6.83) | $ (4.28) | $ 0.49 |
Weighted average common shares outstanding—basic | 32,112 | 30,279 | 28,903 | 28,566 | 25,103 | 25,003 | 24,996 | 25,290 | 29,976 | 25,044 | 25,342 |
Effect of dilutive securities: | |||||||||||
Stock options and restricted stock awards (in shares) | 0 | 0 | 84 | ||||||||
Weighted average common shares outstanding—diluted | 32,112 | 30,279 | 28,903 | 28,566 | 25,103 | 25,003 | 24,996 | 25,290 | 29,976 | 25,044 | 25,426 |
Net income (loss) attributable to common shares-diluted (in dollars per share) | $ (1.39) | $ (1.55) | $ (2.20) | $ (1.74) | $ (3.72) | $ (0.03) | $ (0.29) | $ (0.23) | $ (6.83) | $ (4.28) | $ 0.49 |
Stock options and restricted stock awards | |||||||||||
Anti-dilutive securities excluded from computation of earnings per share | |||||||||||
Stock options and restricted stock units (in shares) | 543 | 226 | 466 | ||||||||
Warrant | |||||||||||
Anti-dilutive securities excluded from computation of earnings per share | |||||||||||
Stock options and restricted stock units (in shares) | 21 | 78 | 0 | ||||||||
Accounting Standards Update 2014-09 | |||||||||||
Anti-dilutive securities excluded from computation of earnings per share | |||||||||||
Cumulative effect of new accounting pronouncement in period of adoption | $ 5,000 | $ 5,000 |
ACCOUNTING POLICIES ACCOUNTIN_3
ACCOUNTING POLICIES ACCOUNTING POLICIES - Summary of Equity Investment Ownerships (Details) | Dec. 31, 2018 |
Bitt Inc. | |
Schedule of Equity Method Investments [Line Items] | |
Equity method investment, ownership percentage | 21.00% |
Spera, Inc. | |
Schedule of Equity Method Investments [Line Items] | |
Equity method investment, ownership percentage | 19.00% |
Voatz, Inc. | |
Schedule of Equity Method Investments [Line Items] | |
Equity method investment, ownership percentage | 13.00% |
SettleMint NV [Member] [Member] | |
Schedule of Equity Method Investments [Line Items] | |
Equity method investment, ownership percentage | 30.00% |
Bitsy, Inc. | |
Schedule of Equity Method Investments [Line Items] | |
Equity method investment, ownership percentage | 33.00% |
Chainstone Labs | |
Schedule of Equity Method Investments [Line Items] | |
Equity method investment, ownership percentage | 29.00% |
Minds, Inc. | |
Schedule of Equity Method Investments [Line Items] | |
Equity method investment, ownership percentage | 24.00% |
VinX Network Ltd. | |
Schedule of Equity Method Investments [Line Items] | |
Equity method investment, ownership percentage | 21.00% |
GrainChain, Inc. | |
Schedule of Equity Method Investments [Line Items] | |
Equity method investment, ownership percentage | 10.00% |
StockCross Financial Services, Inc. | |
Schedule of Equity Method Investments [Line Items] | |
Equity method investment, ownership percentage | 24.00% |
Boston Security Token Exchange LLC | |
Schedule of Equity Method Investments [Line Items] | |
Equity method investment, ownership percentage | 50.00% |
ACQUISITIONS, GOODWILL, AND A_3
ACQUISITIONS, GOODWILL, AND ACQUIRED INTANGIBLE ASSETS Narrative (Details) - USD ($) $ in Thousands | Jun. 25, 2018 | Feb. 12, 2018 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 |
Business Acquisition [Line Items] | |||||
Amortization of intangible assets | $ 5,286 | $ 3,999 | $ 3,968 | ||
Cirrus Technologies LLC | |||||
Business Acquisition [Line Items] | |||||
Amortization of intangible assets | $ (1,105) | ||||
Mac Warehouse, LLC [Member] | |||||
Business Acquisition [Line Items] | |||||
Percentage of business acquired | 100.00% | ||||
Payments to acquire business | $ 1,200 | ||||
tZero.com, Inc. | Verify Investor, LLC [Member] | |||||
Business Acquisition [Line Items] | |||||
Percentage of business acquired | 81.00% | ||||
Payments to acquire business | $ 12,000 | ||||
Customer relationships | Mac Warehouse, LLC [Member] | |||||
Business Acquisition [Line Items] | |||||
Useful Life | 18 months | ||||
Customer relationships | tZero.com, Inc. | Verify Investor, LLC [Member] | |||||
Business Acquisition [Line Items] | |||||
Useful Life | 6 months |
ACQUISITIONS, GOODWILL, AND A_4
ACQUISITIONS, GOODWILL, AND ACQUIRED INTANGIBLE ASSETS Assets Acquired and Liabilities Assumed (Details) - USD ($) $ in Thousands | Jun. 25, 2018 | Feb. 12, 2018 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 |
Business Acquisition [Line Items] | |||||
Business Acquisition, Pro Forma Revenue | $ 1,825,776 | $ 1,759,503 | $ 1,809,418 | ||
Purchase Price | |||||
Cash paid, net of cash acquired | 12,912 | 0 | (1,248) | ||
Allocation | |||||
Goodwill | 22,895 | 14,698 | |||
Amortization of Intangible Assets | (15,729) | (10,442) | |||
Business Acquisition, Pro Forma Net Income (Loss) | (222,597) | (111,848) | $ 11,380 | ||
Intangible Assets, Net (Excluding Goodwill) | 13,370 | $ 7,337 | |||
Mac Warehouse, LLC [Member] | |||||
Business Acquisition [Line Items] | |||||
Percentage of business acquired | 100.00% | ||||
Payments to acquire business | $ 1,200 | ||||
Purchase Price | |||||
Cash paid, net of cash acquired | 1,143 | ||||
Allocation | |||||
Goodwill | 837 | ||||
Intangibles | 3,502 | ||||
Accounts receivable | 399 | ||||
Assets acquired and liabilities assumed, net | 1,143 | ||||
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Inventory | 1,033 | ||||
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Current Assets, Prepaid Expense and Other Assets | 29 | ||||
Business Combination, Recognized Identifiable Assets Acquired And Liabilities Assumed, Fixed Assets | 154 | ||||
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Current Liabilities, Accounts Payable | (905) | ||||
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Noncurrent Liabilities, Long-term Debt | (3,069) | ||||
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Deferred Tax Liabilities Noncurrent | $ (837) | ||||
Mac Warehouse, LLC [Member] | Customer relationships | |||||
Allocation | |||||
Useful Life | 18 months | ||||
Verify Investor, LLC [Member] | |||||
Allocation | |||||
Intangibles | 7,400 | ||||
Amortization of Intangible Assets | (1,105) | ||||
Intangible Assets, Net (Excluding Goodwill) | 6,295 | ||||
Verify Investor, LLC [Member] | Technology and developed software | |||||
Allocation | |||||
Finite-lived intangible assets acquired | 6,300 | ||||
Verify Investor, LLC [Member] | Trade names | |||||
Allocation | |||||
Finite-lived intangible assets acquired | 700 | ||||
Verify Investor, LLC [Member] | Customer relationships | |||||
Allocation | |||||
Finite-lived intangible assets acquired | $ 400 | ||||
tZero.com, Inc. | Verify Investor, LLC [Member] | |||||
Business Acquisition [Line Items] | |||||
Percentage of business acquired | 81.00% | ||||
Payments to acquire business | $ 12,000 | ||||
Purchase Price | |||||
Cash paid, net of cash acquired | 11,769 | ||||
Allocation | |||||
Goodwill | 7,360 | ||||
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Current Assets, Other | 3 | ||||
Intangibles | 7,400 | ||||
Other liabilities assumed | (179) | ||||
Assets acquired and liabilities assumed, net | 14,584 | ||||
Business Combination, Acquisition of Less than 100 Percent, Noncontrolling Interest, Fair Value | (2,815) | ||||
Business Combination, Recognized Identifiable Assets Acquired, Goodwill, and Liabilities Assumed, Less Noncontrolling Interest | $ 11,769 | ||||
tZero.com, Inc. | Verify Investor, LLC [Member] | Technology and developed software | |||||
Allocation | |||||
Useful Life | 10 years | ||||
tZero.com, Inc. | Verify Investor, LLC [Member] | Trade names | |||||
Allocation | |||||
Useful Life | 10 years | ||||
tZero.com, Inc. | Verify Investor, LLC [Member] | Customer relationships | |||||
Allocation | |||||
Useful Life | 6 months |
ACCOUNTS RECEIVABLE (Details)
ACCOUNTS RECEIVABLE (Details) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
ACCOUNTS RECEIVABLE | ||
Accounts receivable, gross | $ 38,046 | $ 31,333 |
Less: allowance for doubtful accounts | (2,116) | (1,253) |
Accounts receivable, net | 35,930 | 30,080 |
Freight rebates receivable | ||
ACCOUNTS RECEIVABLE | ||
Accounts receivable, gross | 11,729 | 8,527 |
Accounts receivable, trade | ||
ACCOUNTS RECEIVABLE | ||
Accounts receivable, gross | 10,380 | 8,317 |
Credit card receivables | ||
ACCOUNTS RECEIVABLE | ||
Accounts receivable, gross | 8,924 | 8,480 |
Other receivables | ||
ACCOUNTS RECEIVABLE | ||
Accounts receivable, gross | $ 7,013 | $ 6,009 |
INVENTORIES (Details)
INVENTORIES (Details) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Inventory Disclosure [Abstract] | ||
Product inventories, net | $ 10,520 | $ 8,844 |
Inventory in-transit | 3,588 | 4,859 |
Total inventories, net | $ 14,108 | $ 13,703 |
PREPAIDS AND OTHER ASSETS (Deta
PREPAIDS AND OTHER ASSETS (Details) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | ||
Prepaid maintenance | $ 7,373 | $ 7,427 |
Prepaid other | 7,573 | 5,684 |
Other current assets | 3,322 | 1,577 |
Prepaid insurance | 2,341 | 444 |
Prepaid advertising | 961 | 987 |
Prepaid inventories | 845 | 1,625 |
Total prepaids and other current assets | $ 22,415 | $ 17,744 |
FIXED ASSETS (Details)
FIXED ASSETS (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Property, Plant and Equipment [Line Items] | |||
Depreciation of fixed assets | $ 26,411 | $ 28,848 | $ 27,283 |
Fixed assets, gross | 339,589 | 315,778 | |
Less: accumulated depreciation | (204,902) | (186,435) | |
Total fixed assets, net | 134,687 | 129,343 | |
Write-off of fully depreciated assets | 8,000 | ||
Computer hardware and software, including internal-use software and website development | |||
Property, Plant and Equipment [Line Items] | |||
Fixed assets, gross | 215,412 | 196,501 | |
Building | |||
Property, Plant and Equipment [Line Items] | |||
Fixed assets, gross | 69,266 | 69,169 | |
Furniture and equipment | |||
Property, Plant and Equipment [Line Items] | |||
Fixed assets, gross | 17,066 | 14,455 | |
Land | |||
Property, Plant and Equipment [Line Items] | |||
Fixed assets, gross | 12,781 | 12,781 | |
Building machinery and equipment | |||
Property, Plant and Equipment [Line Items] | |||
Fixed assets, gross | 9,713 | 8,356 | |
Leasehold improvements | |||
Property, Plant and Equipment [Line Items] | |||
Fixed assets, gross | 8,379 | 7,752 | |
Land improvements | |||
Property, Plant and Equipment [Line Items] | |||
Fixed assets, gross | 6,972 | 6,764 | |
Equipment under capital leases | |||
Property, Plant and Equipment [Line Items] | |||
Depreciation of fixed assets | 500 | 3,500 | $ 4,100 |
Fixed assets, gross | 1,800 | 1,800 | |
Less: accumulated depreciation | $ (1,000) | $ (500) |
OTHER LONG-TERM ASSETS (Details
OTHER LONG-TERM ASSETS (Details) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
OTHER LONG-TERM ASSETS | ||
Deposit on purchase of a business | $ 8,000 | $ 0 |
Other long-term assets | 4,310 | 2,786 |
Prepaid expenses, long-term portion | 2,154 | 1,430 |
Total other long-term assets, net | $ 14,464 | $ 4,216 |
ACCRUED LIABILITIES (Details)
ACCRUED LIABILITIES (Details) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 |
Payables and Accruals [Abstract] | ||||
Accounts payable accruals | $ 15,872 | $ 16,614 | ||
Allowance for returns | 15,261 | 17,391 | $ 18,176 | $ 17,896 |
Accrued marketing expenses | 14,150 | 25,959 | ||
Accrued compensation and other related costs | 12,099 | 10,716 | ||
Other accrued expenses | 10,940 | 608 | ||
Sales and other taxes payable | 9,923 | 2,363 | ||
Accrued freight | 5,343 | 5,040 | ||
Other accrued expenses | 4,270 | 3,920 | ||
Total accrued liabilities | $ 87,858 | $ 82,611 |
DEFERRED REVENUE (Details)
DEFERRED REVENUE (Details) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Deferred revenue | ||
Total deferred revenue | $ 50,578 | $ 46,468 |
Payments received prior to product delivery | ||
Deferred revenue | ||
Total deferred revenue | 30,033 | 24,632 |
Club O membership fees and reward points | ||
Deferred revenue | ||
Total deferred revenue | 11,709 | 11,761 |
Unredeemed gift cards | ||
Deferred revenue | ||
Total deferred revenue | 3,399 | 4,955 |
In store credits | ||
Deferred revenue | ||
Total deferred revenue | 4,707 | 4,489 |
Other | ||
Deferred revenue | ||
Total deferred revenue | $ 730 | $ 631 |
BORROWINGS (Details)
BORROWINGS (Details) - USD ($) $ in Thousands | Dec. 31, 2018 | Jun. 25, 2018 | Dec. 31, 2017 | Nov. 06, 2017 |
Debt Instrument [Line Items] | ||||
Letters of credit, outstanding amount | $ 280 | $ 355 | ||
Capital lease arrangement | 1,400 | |||
Capital lease obligations | 900 | |||
Long-term debt, net | 3,069 | 0 | ||
Minimum capital lease payment in first year | 496 | |||
Minimum capital lease payment in second year | 413 | |||
Commercial purchasing card | ||||
Debt Instrument [Line Items] | ||||
Outstanding balance | 48 | 822 | ||
Unused borrowing capacity | 1,000 | $ 4,200 | ||
Long-term Debt | PCL Term Loan | O.com Land | ||||
Debt Instrument [Line Items] | ||||
Interest rate | 8.00% | |||
Notes Payable, Other Payables | PCL Term Loan | O.com Land | ||||
Debt Instrument [Line Items] | ||||
Long-term debt, net | $ 40,000 | |||
Senior Notes [Member] | High Bench Loan [Member] | ||||
Debt Instrument [Line Items] | ||||
Interest rate | 11.00% | |||
Debt Instrument, Debt Default, Amount | $ 0 | |||
Long-term debt, net | $ 3,100 | |||
Senior Notes [Member] | High Bench Loan [Member] | Default rate | ||||
Debt Instrument [Line Items] | ||||
Interest rate | 18.00% |
COMMITMENTS AND CONTINGENCIES -
COMMITMENTS AND CONTINGENCIES - Schedule of minimum lease payments (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Future minimum lease payments for all operating leases | |||
2019 | $ 8,822 | ||
2020 | 7,414 | ||
2021 | 7,654 | ||
2022 | 7,579 | ||
2023 | 6,677 | ||
Thereafter | 19,571 | ||
Total | 57,717 | ||
Operating leases | |||
Rental expense for operating leases | $ 7,800 | $ 9,300 | $ 12,600 |
COMMITMENTS AND CONTINGENCIES_2
COMMITMENTS AND CONTINGENCIES (Details 2) $ in Millions | Aug. 28, 2017defendent | Jul. 07, 2017defendent | Sep. 23, 2009defendent | Dec. 31, 2018USD ($) | Sep. 30, 2018USD ($) |
Loss contingency, legal proceedings | |||||
Estimated Litigation Liability, Current | $ | $ 7.3 | ||||
Accrued liabilities for contingencies | $ | $ 10.3 | ||||
SpeedTrack, Inc. | |||||
Loss contingency, legal proceedings | |||||
Number of other defendants | 27 | ||||
State Of Wyoming Lawsuit [Member] | |||||
Loss contingency, legal proceedings | |||||
Number of other defendants | 5 | ||||
State Of Indiana Lawsuit [Member] | |||||
Loss contingency, legal proceedings | |||||
Number of other defendants | 1 |
STOCKHOLDERS' EQUITY (Details)
STOCKHOLDERS' EQUITY (Details) $ / shares in Units, $ in Thousands | May 06, 2019USD ($)$ / token | Aug. 09, 2018USD ($) | Dec. 31, 2018USD ($)dayvote$ / sharesshares | Dec. 31, 2017USD ($) | Dec. 31, 2016USD ($) |
Class of Stock [Line Items] | |||||
Number of votes to which holders of common shares are entitled for each share held | vote | 1 | ||||
Preferred stock, votes per share (in vote) | vote | 1 | ||||
Dividend rate (usd per share) | $ / shares | $ 0.16 | ||||
Cash paid for preferred stock dividends declared (in usd per share) | $ / shares | $ 0.16 | ||||
Payments to Acquire Equity Method Investments | $ 48,731 | $ 5,188 | $ 4,750 | ||
Series A Preferred Stock | |||||
Class of Stock [Line Items] | |||||
Shares issued upon conversion (in shares) | shares | 1 | ||||
Conversion price as a percent of the preferred stock price | 105.00% | ||||
Trading days used to determine stock price (in day) | day | 5 | ||||
Conversion price as a percent of the common stock price | 105.00% | ||||
At-The-Market Agreement [Member] | JonesTrading Institutional Services LLC [Member] | |||||
Class of Stock [Line Items] | |||||
Sale Of Stock, Sales Commission | 2.00% | ||||
Other Significant Noncash Transaction, Value of Consideration Received | $ 150,000 | ||||
Sale Of Stock, Term Of Sales Agreement | 3 years | ||||
Sale of Stock, Number of Shares Issued in Transaction | shares | 2,883,344 | ||||
Proceeds from Issuance or Sale of Equity | $ 94,600 | ||||
Deferred Offering Costs | $ 2,600 | ||||
Sale of Stock, Price Per Share | $ / shares | $ 33.71 | ||||
Common Stock, Aggregate Offering Price | $ 50,000 | ||||
Underwriting Commitments, Commitment Fee Percentage | 1.00% | ||||
tZero.com, Inc. | GSR Capital [Member] | Subsequent Event | |||||
Class of Stock [Line Items] | |||||
Payments to Acquire Equity Method Investments | $ 30,000 | ||||
Sale Of Tokens, Price Per Token | $ / token | 6.67 |
STOCK-BASED AWARDS (Details)
STOCK-BASED AWARDS (Details) - USD ($) | Jan. 23, 2018 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Stock-based compensation expense | $ 14,356,000 | $ 4,077,000 | $ 4,891,000 | |
Options | ||||
Outstanding—end of year (in shares) | 0 | |||
tZero.com, Inc. | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Stock-based compensation expense | $ 4,848,000 | 0 | 0 | |
Restricted stock awards | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Stock-based compensation expense | $ 9,096,000 | $ 4,056,000 | $ 4,891,000 | |
Units | ||||
Outstanding-beginning of year (in shares) | 540,000 | 560,000 | 349,000 | |
Granted at fair value (in shares) | 387,000 | 310,000 | 541,000 | |
Vested (in shares) | (234,000) | (212,000) | (219,000) | |
Forfeited (in shares) | (134,000) | (118,000) | (111,000) | |
Outstanding-end of period (in shares) | 559,000 | 540,000 | 560,000 | |
Weighted Average Grant Date Fair Value | ||||
Outstanding-beginning of year (in dollars per share) | $ 17.05 | $ 17.46 | $ 24.80 | |
Granted at fair value (in dollars per share) | 65.42 | 17.75 | 14.52 | |
Vested (in dollars per share) | 17.68 | 19.58 | 22.57 | |
Forfeited (in dollars per share) | 42.85 | 16.21 | 16.52 | |
Outstanding-end of period (in dollars per share) | $ 44.08 | $ 17.05 | $ 17.46 | |
Restricted stock awards | tZero.com, Inc. | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Stock-based compensation expense | $ 4,000,000 | |||
Stock options | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Stock-based compensation expense | $ 0 | $ 0 | $ 0 | |
Options | ||||
Outstanding—beginning of year (in shares) | 0 | 156,000 | 204,000 | |
Exercised (in shares) | 0 | (39,000) | (42,000) | |
Expired/Forfeited (in shares) | 0 | (117,000) | (6,000) | |
Outstanding—end of year (in shares) | 0 | 0 | 156,000 | |
Options exercisable at year-end (in shares) | 0 | 0 | 156,000 | |
Weighted Average Exercise Price | ||||
Outstanding—beginning of year (in dollars per share) | $ 0 | $ 17.33 | $ 17.27 | |
Exercised (in dollars per share) | 0 | 16.90 | 17.08 | |
Expired/Forfeited (in dollars per share) | 0 | 17.48 | 17.08 | |
Outstanding—end of year (in dollars per share) | 0 | 0 | 17.33 | |
Options exercisable at year-end (in dollars per share) | $ 0 | $ 0 | $ 17.33 | |
Stock options | Medici Ventures Incentive Plan | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Stock-based compensation expense | $ 412,000 | $ 21,000 | $ 0 |
STOCK-BASED AWARDS - Additional
STOCK-BASED AWARDS - Additional Information (Details) - USD ($) | Jan. 23, 2018 | Dec. 31, 2017 | Jul. 31, 2017 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | Jan. 22, 2018 | Dec. 31, 2015 |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Number | 0 | |||||||
Stock-based compensation expense | $ 14,356,000 | $ 4,077,000 | $ 4,891,000 | |||||
Proceeds from exercise of stock options | $ 0 | $ 664,000 | $ 819,000 | |||||
Stock options | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Number of shares available for future grants | 1,800,000 | |||||||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Number | 0 | 0 | 0 | 156,000 | 204,000 | |||
Stock-based compensation expense | $ 0 | $ 0 | $ 0 | |||||
Intrinsic value of options exercised | 0 | 54,000 | 82,000 | |||||
Proceeds from exercise of stock options | 0 | 664,000 | 819,000 | |||||
Restricted stock awards | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Stock-based compensation expense | $ 9,096,000 | $ 4,056,000 | $ 4,891,000 | |||||
Granted at fair value (in shares) | 387,000 | 310,000 | 541,000 | |||||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Number | 540,000 | 559,000 | 540,000 | 560,000 | 349,000 | |||
Vesting period | 3 years | |||||||
Granted at fair value (in dollars per share) | $ 65.42 | $ 17.75 | $ 14.52 | |||||
Restricted stock awards | First Year | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Award vesting percentage | 33.30% | |||||||
Restricted stock awards | Second Year | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Award vesting percentage | 33.30% | |||||||
Restricted stock awards | Third Year | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Award vesting percentage | 33.30% | |||||||
Medici Ventures Incentive Plan | Stock options | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Stock-based compensation expense | $ 412,000 | $ 21,000 | $ 0 | |||||
Stock options granted during period (in shares) | 74,750 | |||||||
Value of stock options granted during period | $ 91,000 | |||||||
Medici Ventures | Stock options | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Vesting period | 3 years | 3 years | ||||||
tZero restricted stock units authorized, percentage | 10.00% | |||||||
Stock options granted during period (in shares) | 94,450 | |||||||
Value of stock options granted during period | $ 1,800,000 | |||||||
tZero.com, Inc. | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Stock-based compensation expense | $ 4,848,000 | $ 0 | $ 0 | |||||
tZero.com, Inc. | Stock options | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Stock options granted during period (in shares) | 5,590,000 | |||||||
Value of stock options granted during period | $ 4,600,000 | |||||||
tZero.com, Inc. | Restricted stock awards | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Stock-based compensation expense | $ 4,000,000 | |||||||
tZero restricted stock units authorized, percentage | 5.00% | |||||||
Shares issued | 2,000,000 | |||||||
tZero.com, Inc. | Restricted stock awards | Minimum | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Vesting period | 2 years | |||||||
tZero.com, Inc. | Restricted stock awards | Maximum | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Vesting period | 3 years | |||||||
tZero.com, Inc. | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Ownership percentage | 80.00% | 81.00% |
EMPLOYEE RETIREMENT PLAN (Detai
EMPLOYEE RETIREMENT PLAN (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Retirement Benefits [Abstract] | |||
Minimum period of service to qualify to participate in 401(k) defined contribution plan | 3 months | ||
Eligible age to participate in 401(k) defined contribution plan | 21 years | ||
Employer match of first 6% of participant's contributions (as a percent) | 100.00% | ||
Percentage of participant's' gross pay for which the employer contributes a matching contribution | 6.00% | ||
Matching contributions made by the company | $ 5,500,000 | $ 4,100,000 | $ 3,800,000 |
Discretionary contributions | $ 0 | $ 0 | $ 0 |
OTHER INCOME (EXPENSE), NET (De
OTHER INCOME (EXPENSE), NET (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Other Income and Expenses [Abstract] | |||||||||||
Club O Rewards and gift card breakage | $ 0 | $ 2,742 | $ 16,808 | ||||||||
Gain on investment in precious metals | 0 | 1,971 | 201 | ||||||||
Loss on equity investments, net | (2,843) | (5,995) | (2,850) | ||||||||
Other | (645) | 2,460 | 22 | ||||||||
Total other income (expense), net | $ (1,999) | $ (1,848) | $ 368 | $ (9) | $ (1,573) | $ 5,882 | $ 593 | $ (3,724) | $ (3,488) | $ 1,178 | $ 14,181 |
INCOME TAXES (Income Before Inc
INCOME TAXES (Income Before Income Taxes) (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Income Tax Disclosure [Abstract] | |||||||||||
United States | $ (219,585) | $ (48,039) | $ 20,974 | ||||||||
Foreign | (369) | 305 | (429) | ||||||||
Income (loss) before income taxes | $ (49,880) | $ (49,398) | $ (65,943) | $ (54,733) | $ (24,877) | $ (6,517) | $ (9,718) | $ (6,622) | $ (219,954) | $ (47,734) | $ 20,545 |
INCOME TAXES (Provision) (Detai
INCOME TAXES (Provision) (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Current: | |||||||||||
Federal | $ (57) | $ 365 | $ 280 | ||||||||
State | (141) | 280 | 1,264 | ||||||||
Foreign | 44 | 57 | 34 | ||||||||
Total current | (154) | 702 | 1,578 | ||||||||
Deferred: | |||||||||||
Federal | (1,583) | 56,350 | 7,311 | ||||||||
State | (645) | 7,146 | 410 | ||||||||
Foreign | (2) | (10) | (2) | ||||||||
Total deferred | (2,230) | 63,486 | 7,719 | ||||||||
Total provision (benefit) for income taxes | $ (1,939) | $ (141) | $ (27) | $ (277) | $ 71,915 | $ (5,412) | $ (1,975) | $ (340) | $ (2,384) | $ 64,188 | $ 9,297 |
INCOME TAXES (Additional Inform
INCOME TAXES (Additional Information) (Details) - USD ($) | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Difference in income tax provision from amount computed by applying U.S. federal income tax rate to loss before income taxes | |||||||||||
U.S. federal income tax provision (benefit) at statutory rate | $ (46,190,000) | $ (16,707,000) | $ 7,191,000 | ||||||||
State income tax expense, net of federal benefit | (8,289,000) | (2,480,000) | 1,232,000 | ||||||||
Research and development credit | (1,734,000) | (1,696,000) | (1,078,000) | ||||||||
Stock based compensation expense | (1,260,000) | 164,000 | 674,000 | ||||||||
Other | 1,652,000 | 581,000 | 110,000 | ||||||||
Lobbying expenses | 2,192,000 | 0 | 0 | ||||||||
Reduction in federal rate | 0 | 25,287,000 | 0 | ||||||||
Change in valuation allowance | 51,245,000 | 59,039,000 | 1,168,000 | ||||||||
Total provision (benefit) for income taxes | $ (1,939,000) | $ (141,000) | $ (27,000) | $ (277,000) | $ 71,915,000 | $ (5,412,000) | $ (1,975,000) | $ (340,000) | (2,384,000) | 64,188,000 | 9,297,000 |
Deferred tax assets: | |||||||||||
Net operating loss carryforwards | 79,820,000 | 29,350,000 | 79,820,000 | 29,350,000 | |||||||
Research and development tax credits | 15,382,000 | 12,653,000 | 15,382,000 | 12,653,000 | |||||||
Accrued expenses | 7,898,000 | 10,672,000 | 7,898,000 | 10,672,000 | |||||||
Reserves and other | 5,345,000 | 1,480,000 | 5,345,000 | 1,480,000 | |||||||
Deferred Tax Asset, Parent's Basis in Discontinued Operation | 4,857,000 | 1,636,000 | 4,857,000 | 1,636,000 | |||||||
Tax Cuts And Jobs Act Of 2017, Incomplete Accounting, Change In Tax Rate, Deferred Tax Asset, Provisional Income Tax Expense | 25,200,000 | ||||||||||
Tax Cuts And Jobs Act Of 2017, Incomplete Accounting, Transition Tax For Accumulated Foreign Earnings, Provisional Liability | 47,000 | 47,000 | |||||||||
Fixed and intangible assets | 2,493,000 | 8,068,000 | 2,493,000 | 8,068,000 | |||||||
Other tax credits | 206,000 | 220,000 | 206,000 | 220,000 | |||||||
Gross deferred tax assets | 116,001,000 | 64,079,000 | 116,001,000 | 64,079,000 | |||||||
Valuation allowance | (114,523,000) | (63,278,000) | (114,523,000) | (63,278,000) | |||||||
Total deferred tax assets | 1,478,000 | 801,000 | 1,478,000 | 801,000 | |||||||
Deferred tax liabilities: | |||||||||||
Prepaid expenses | (880,000) | (788,000) | (880,000) | (788,000) | |||||||
Goodwill | (489,000) | (261,000) | (489,000) | (261,000) | |||||||
Fixed assets | 0 | 0 | 0 | 0 | |||||||
Total deferred tax liabilities | (1,369,000) | (1,049,000) | (1,369,000) | (1,049,000) | |||||||
Deferred Tax Assets, Net | 109,000 | 109,000 | |||||||||
Deferred Tax Liabilities, Net | (248,000) | (248,000) | |||||||||
Unrecognized tax benefits that would impact effective tax rate | 8,000,000 | 7,000,000 | 8,000,000 | 7,000,000 | 5,900,000 | ||||||
Unrecognized tax benefits that would result in adjustments to other tax accounts | 0 | 0 | 0 | 0 | $ 1,500,000 | ||||||
Interest and penalties accrued on tax contingencies | 499,000 | $ 492,000 | 499,000 | $ 492,000 | |||||||
Indefinitely reinvested foreign earnings | 1,400,000 | 1,400,000 | |||||||||
Federal | |||||||||||
Deferred tax liabilities: | |||||||||||
Net operating loss carryforwards | 168,600,000 | 168,600,000 | |||||||||
Federal | Tax Year 2020 - 2037 [Member] | |||||||||||
Deferred tax liabilities: | |||||||||||
Net operating loss carryforwards | 152,300,000 | 152,300,000 | |||||||||
Internal Revenue Service (IRS) | |||||||||||
Deferred tax assets: | |||||||||||
Research and development tax credits | 16,400,000 | 16,400,000 | |||||||||
State and local jurisdictions | |||||||||||
Deferred tax assets: | |||||||||||
Research and development tax credits | 6,900,000 | 6,900,000 | |||||||||
Deferred tax liabilities: | |||||||||||
Net operating loss carryforwards | $ 286,900,000 | $ 286,900,000 |
INCOME TAXES (Reconciliation of
INCOME TAXES (Reconciliation of Tax Contingencies) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Reconciliation of beginning and ending tax contingencies, excluding interest and penalties | |||
Beginning balance | $ 6,964 | $ 7,333 | $ 4,753 |
Additions for tax positions related to the current year | 1,013 | 881 | 1,112 |
Additions for tax positions taken in prior years | 332 | 230 | 1,468 |
Reduction for tax positions settled by utilizing tax attributes | (335) | (1,480) | 0 |
Ending balance | $ 7,974 | $ 6,964 | $ 7,333 |
RELATED PARTY TRANSACTIONS (Det
RELATED PARTY TRANSACTIONS (Details) - USD ($) $ in Thousands | Dec. 21, 2018 | Sep. 21, 2018 | Jun. 28, 2018 | Sep. 30, 2018 | Jul. 31, 2018 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | Nov. 06, 2017 |
Related Party Transaction | |||||||||
Long-term debt, net | $ 3,069 | $ 0 | |||||||
Payments to acquire productive assets | 28,680 | 23,586 | $ 72,281 | ||||||
Payments to Acquire Equity Method Investments | $ 48,731 | $ 5,188 | $ 4,750 | ||||||
Medici Land Governance | |||||||||
Related Party Transaction | |||||||||
Equity method investment, shares acquired (in shares) | 510,000 | ||||||||
Proceeds from Noncontrolling Interests | $ 6,700 | ||||||||
Patrick Byrne | |||||||||
Related Party Transaction | |||||||||
Equity method investment, shares acquired (in shares) | 390,000 | ||||||||
Chainstone Labs | Medici Ventures | |||||||||
Related Party Transaction | |||||||||
Common stock issued for asset purchase | $ 3,600 | ||||||||
Sale of Stock, Percentage of Ownership before Transaction | 29.00% | ||||||||
Bitsy, Inc. | Medici Ventures | |||||||||
Related Party Transaction | |||||||||
Payments to Acquire Equity Method Investments | $ 3,000 | ||||||||
Common stock issued for asset purchase (in shares) | 47,378 | ||||||||
Common stock issued for asset purchase | $ 1,500 | ||||||||
Sale of Stock, Percentage of Ownership before Transaction | 25.00% | ||||||||
Bitsy, Inc. | tZero.com, Inc. | |||||||||
Related Party Transaction | |||||||||
Payments to Acquire Equity Method Investments | $ 8,000 | ||||||||
Sale of Stock, Percentage of Ownership before Transaction | 67.00% | ||||||||
SiteHelix [Member] | |||||||||
Related Party Transaction | |||||||||
Payments to acquire productive assets | $ 500 | ||||||||
Purchase price | $ 3,400 | ||||||||
O.com Land | PCL Term Loan | Notes Payable, Other Payables | |||||||||
Related Party Transaction | |||||||||
Long-term debt, net | $ 40,000 | ||||||||
O.com Land | PCL Term Loan | Long-term Debt | |||||||||
Related Party Transaction | |||||||||
Interest rate | 8.00% | ||||||||
Common stock | |||||||||
Related Party Transaction | |||||||||
Common stock issued for asset purchase (in shares) | 147,000 | 0 | 0 | ||||||
Common stock | SiteHelix [Member] | |||||||||
Related Party Transaction | |||||||||
Common stock issued for asset purchase (in shares) | 100,000 | ||||||||
Common stock issued for asset purchase | $ 2,900 | ||||||||
Medici Ventures | Medici Land Governance | |||||||||
Related Party Transaction | |||||||||
Sale of stock, percentage of ownership after transaction | 57.00% | ||||||||
SiteHelix [Member] | Saum Noursalehi [Member] | |||||||||
Related Party Transaction | |||||||||
Ownership percentage | 62.00% | ||||||||
Patrick Byrne | Medici Land Governance | |||||||||
Related Party Transaction | |||||||||
Sale of stock, percentage of ownership after transaction | 43.00% | ||||||||
Medici Ventures Board Member [Member] | Chainstone Labs | Medici Ventures | |||||||||
Related Party Transaction | |||||||||
Sale of stock, percentage of ownership after transaction | 71.00% | ||||||||
Medici Ventures Chief Operating Officer [Member] | Bitsy, Inc. | Medici Ventures | |||||||||
Related Party Transaction | |||||||||
Sale of stock, percentage of ownership after transaction | 25.00% | ||||||||
Bitsy, Inc. | Medici Ventures | |||||||||
Related Party Transaction | |||||||||
Sale of stock, percentage of ownership after transaction | 33.00% |
BROKER DEALERS (Details)
BROKER DEALERS (Details) | 12 Months Ended | |
Dec. 31, 2018USD ($)subsidiary | Dec. 31, 2017USD ($) | |
Related Party Transaction | ||
Number of broker-dealer subsidiary (in subsidiary) | 2 | |
SpeedRoute | ||
Related Party Transaction | ||
Actual net capital | $ 1,251,579 | $ 334,848 |
Amount in excess of required net capital | 1,152,854 | 233,485 |
Minimum required net capital | $ 98,725 | $ 101,363 |
Net capital ratio (as a percent) | 1.2 | 4.5 |
Pro Securities | ||
Related Party Transaction | ||
Actual net capital | $ 13,958 | $ 24,175 |
Amount in excess of required net capital | 8,958 | 19,175 |
Minimum required net capital | $ 5,000 | $ 5,000 |
Net capital ratio (as a percent) | 2 | 1.30 |
BUSINESS SEGMENTS (Details)
BUSINESS SEGMENTS (Details) - USD ($) | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Segment reporting information | |||||||||||
Revenue, net | $ 452,548,000 | $ 440,580,000 | $ 483,133,000 | $ 445,331,000 | $ 456,290,000 | $ 424,007,000 | $ 432,024,000 | $ 432,435,000 | $ 1,821,592,000 | $ 1,744,756,000 | $ 1,799,963,000 |
Total cost of goods sold | 370,968,000 | 353,864,000 | 391,390,000 | 351,462,000 | 370,492,000 | 340,332,000 | 347,853,000 | 345,528,000 | 1,467,684,000 | 1,404,205,000 | 1,468,614,000 |
Gross profit | 81,580,000 | 86,716,000 | 91,743,000 | 93,869,000 | 85,798,000 | 83,675,000 | 84,171,000 | 86,907,000 | 353,908,000 | 340,551,000 | 331,349,000 |
Operating expenses | 130,024,000 | 134,548,000 | 158,279,000 | 148,263,000 | 108,513,000 | 95,550,000 | 93,902,000 | 89,220,000 | 571,114,000 | 387,185,000 | 324,434,000 |
Interest and other income (expense), net | (2,748,000) | (1,100,000) | 13,630,000 | ||||||||
Pre-tax loss | (49,880,000) | (49,398,000) | (65,943,000) | (54,733,000) | (24,877,000) | (6,517,000) | (9,718,000) | (6,622,000) | (219,954,000) | (47,734,000) | 20,545,000 |
Benefit for income taxes | (1,939,000) | (141,000) | (27,000) | (277,000) | 71,915,000 | (5,412,000) | (1,975,000) | (340,000) | (2,384,000) | 64,188,000 | 9,297,000 |
Consolidated net income (loss) | (47,941,000) | (49,257,000) | (65,916,000) | (54,456,000) | (96,792,000) | (1,105,000) | (7,743,000) | (6,282,000) | (217,570,000) | (111,922,000) | 11,248,000 |
Retail | |||||||||||
Segment reporting information | |||||||||||
Revenue, net | 446,733,000 | 435,775,000 | 477,683,000 | 439,996,000 | 451,996,000 | 420,064,000 | 427,955,000 | 428,089,000 | 1,800,187,000 | 1,728,104,000 | 1,784,782,000 |
Total cost of goods sold | 366,712,000 | 350,651,000 | 387,252,000 | 347,580,000 | 367,561,000 | 337,698,000 | 345,039,000 | 342,260,000 | 1,452,195,000 | 1,392,558,000 | 1,458,411,000 |
Gross profit | 347,992,000 | 335,546,000 | 326,371,000 | ||||||||
Operating expenses | 506,113,000 | 365,648,000 | 307,669,000 | ||||||||
Interest and other income (expense), net | (476,000) | 4,680,000 | 13,630,000 | ||||||||
Pre-tax loss | (158,597,000) | (25,422,000) | 32,332,000 | ||||||||
tZero.com, Inc. | |||||||||||
Segment reporting information | |||||||||||
Revenue, net | 19,043,000 | 16,493,000 | 15,181,000 | ||||||||
Total cost of goods sold | 13,127,000 | 11,647,000 | 10,203,000 | ||||||||
Gross profit | 5,916,000 | 4,846,000 | 4,978,000 | ||||||||
Operating expenses | 47,006,000 | 17,101,000 | 15,826,000 | ||||||||
Interest and other income (expense), net | 233,000 | 0 | 0 | ||||||||
Pre-tax loss | (40,857,000) | (12,255,000) | (10,848,000) | ||||||||
Other | |||||||||||
Segment reporting information | |||||||||||
Revenue, net | 5,815,000 | 4,805,000 | 5,450,000 | 5,335,000 | 4,294,000 | 3,943,000 | 4,069,000 | 4,346,000 | 2,362,000 | 159,000 | 0 |
Total cost of goods sold | $ 4,256,000 | $ 3,213,000 | $ 4,138,000 | $ 3,882,000 | $ 2,931,000 | $ 2,634,000 | $ 2,814,000 | $ 3,268,000 | 2,362,000 | 0 | 0 |
Gross profit | 0 | 159,000 | 0 | ||||||||
Operating expenses | 17,995,000 | 4,436,000 | 939,000 | ||||||||
Interest and other income (expense), net | (2,505,000) | (5,780,000) | 0 | ||||||||
Pre-tax loss | (20,500,000) | (10,057,000) | (939,000) | ||||||||
Inter-segment | |||||||||||
Segment reporting information | |||||||||||
Revenue, net | 0 | 0 | 0 | ||||||||
Interest and other income (expense), net | $ 3,458,000 | $ 1,970,000 | $ 594,000 |
SUBSEQUENT EVENTS (Details)
SUBSEQUENT EVENTS (Details) - USD ($) $ in Millions | Jan. 18, 2019 | Mar. 18, 2019 | Dec. 31, 2018 | Dec. 31, 2017 |
Subsequent Event [Line Items] | ||||
Carrying value of equity method investments | $ 40.1 | $ 6.5 | ||
tZero.com, Inc. | Subsequent Event | ||||
Subsequent Event [Line Items] | ||||
Carrying value of equity method investments | $ 5.8 | |||
Proceeds from sale of equity method investments | $ 5.9 | |||
GSR Capital and Makara Capital | Subsequent Event | ||||
Subsequent Event [Line Items] | ||||
Proceeds from sale of investment | $ 100 |
QUARTERLY RESULTS OF OPERATIO_3
QUARTERLY RESULTS OF OPERATIONS (unaudited) (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 12 Months Ended | ||||||||||||
Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | ||||
Revenue, net | ||||||||||||||
Total net revenue | $ 452,548 | $ 440,580 | $ 483,133 | $ 445,331 | $ 456,290 | $ 424,007 | $ 432,024 | $ 432,435 | $ 1,821,592 | $ 1,744,756 | $ 1,799,963 | |||
Cost of goods sold | ||||||||||||||
Total cost of goods sold | 370,968 | 353,864 | 391,390 | 351,462 | 370,492 | 340,332 | 347,853 | 345,528 | 1,467,684 | 1,404,205 | 1,468,614 | |||
Gross profit | 81,580 | 86,716 | 91,743 | 93,869 | 85,798 | 83,675 | 84,171 | 86,907 | 353,908 | 340,551 | 331,349 | |||
Operating expenses: | ||||||||||||||
Sales and marketing | 47,537 | 55,312 | 94,416 | 77,214 | 54,521 | 45,153 | 43,297 | 37,618 | 274,479 | [1] | 180,589 | [1] | 147,896 | [1] |
Technology | 34,557 | 33,880 | 32,423 | 31,294 | 29,896 | 28,746 | 28,244 | 28,992 | 132,154 | [1] | 115,878 | [1] | 106,760 | [1] |
General and administrative | 47,930 | 45,356 | 31,440 | 39,755 | 24,096 | 21,651 | 22,361 | 22,610 | 164,481 | [1] | 90,718 | [1] | 89,298 | [1] |
Total operating expenses | 130,024 | 134,548 | 158,279 | 148,263 | 108,513 | 95,550 | 93,902 | 89,220 | 571,114 | 387,185 | 324,434 | |||
Operating income (loss) | (48,444) | (47,832) | (66,536) | (54,394) | (22,715) | (11,875) | (9,731) | (2,313) | (217,206) | (46,634) | 6,915 | |||
Interest income | 661 | 383 | 620 | 544 | 209 | 189 | 136 | 125 | 2,208 | 659 | 326 | |||
Interest expense | (98) | (101) | (395) | (874) | (798) | (713) | (716) | (710) | (1,468) | (2,937) | (877) | |||
Other income (loss), net | (1,999) | (1,848) | 368 | (9) | (1,573) | 5,882 | 593 | (3,724) | (3,488) | 1,178 | 14,181 | |||
Net loss before income taxes | (49,880) | (49,398) | (65,943) | (54,733) | (24,877) | (6,517) | (9,718) | (6,622) | (219,954) | (47,734) | 20,545 | |||
Benefit for income taxes | (1,939) | (141) | (27) | (277) | 71,915 | (5,412) | (1,975) | (340) | (2,384) | 64,188 | 9,297 | |||
Consolidated net income (loss) | (47,941) | (49,257) | (65,916) | (54,456) | (96,792) | (1,105) | (7,743) | (6,282) | (217,570) | (111,922) | 11,248 | |||
Less: Net loss attributable to noncontrolling interests | (5,614) | (1,334) | (1,005) | (3,547) | (1,102) | (319) | (244) | (379) | (11,500) | (2,044) | (1,274) | |||
Net income (loss) attributable to stockholders of Overstock.com, Inc. | $ (42,327) | $ (47,923) | $ (64,911) | $ (50,909) | $ (95,690) | $ (786) | $ (7,499) | $ (5,903) | $ (206,070) | $ (109,878) | $ 12,522 | |||
Net income (loss) per common share—basic: | ||||||||||||||
Net income (loss) attributable to common shares-basic (in dollars per share) | $ (1.39) | $ (1.55) | $ (2.20) | $ (1.74) | $ (3.72) | $ (0.03) | $ (0.29) | $ (0.23) | $ (6.83) | $ (4.28) | $ 0.49 | |||
Weighted average common shares outstanding-basic (in shares) | 32,112 | 30,279 | 28,903 | 28,566 | 25,103 | 25,003 | 24,996 | 25,290 | 29,976 | 25,044 | 25,342 | |||
Net income per common share-diluted: | ||||||||||||||
Net income (loss) attributable to common shares-diluted (in dollars per share) | $ (1.39) | $ (1.55) | $ (2.20) | $ (1.74) | $ (3.72) | $ (0.03) | $ (0.29) | $ (0.23) | $ (6.83) | $ (4.28) | $ 0.49 | |||
Weighted average common shares outstanding-diluted (in shares) | 32,112 | 30,279 | 28,903 | 28,566 | 25,103 | 25,003 | 24,996 | 25,290 | 29,976 | 25,044 | 25,426 | |||
Retail | ||||||||||||||
Revenue, net | ||||||||||||||
Total net revenue | $ 446,733 | $ 435,775 | $ 477,683 | $ 439,996 | $ 451,996 | $ 420,064 | $ 427,955 | $ 428,089 | $ 1,800,187 | $ 1,728,104 | $ 1,784,782 | |||
Cost of goods sold | ||||||||||||||
Total cost of goods sold | 366,712 | 350,651 | 387,252 | 347,580 | 367,561 | 337,698 | 345,039 | 342,260 | 1,452,195 | 1,392,558 | 1,458,411 | |||
Gross profit | 347,992 | 335,546 | 326,371 | |||||||||||
Operating expenses: | ||||||||||||||
Total operating expenses | 506,113 | 365,648 | 307,669 | |||||||||||
Net loss before income taxes | (158,597) | (25,422) | 32,332 | |||||||||||
Other | ||||||||||||||
Revenue, net | ||||||||||||||
Total net revenue | 5,815 | 4,805 | 5,450 | 5,335 | 4,294 | 3,943 | 4,069 | 4,346 | 2,362 | 159 | 0 | |||
Cost of goods sold | ||||||||||||||
Total cost of goods sold | $ 4,256 | $ 3,213 | $ 4,138 | $ 3,882 | $ 2,931 | $ 2,634 | $ 2,814 | $ 3,268 | 2,362 | 0 | 0 | |||
Gross profit | 0 | 159 | 0 | |||||||||||
Operating expenses: | ||||||||||||||
Total operating expenses | 17,995 | 4,436 | 939 | |||||||||||
Net loss before income taxes | $ (20,500) | $ (10,057) | $ (939) | |||||||||||
[1] | (1) Includes stock-based compensation as follows (Note 15): Cost of goods sold — retail $201 $183 $266 Sales and marketing 1,728 415 249 Technology 2,066 649 777 General and administrative 10,361 2,830 3,599 Total $14,356 $4,077 $4,891 |
Schedule II Valuation and Qua_2
Schedule II Valuation and Qualifying Accounts (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Deferred tax valuation allowance | |||
Valuation and Qualifying Accounts | |||
Balance at Beginning of Year | $ 63,278 | $ 4,239 | $ 3,071 |
Charged to Expense | 51,245 | 59,039 | 1,168 |
Deductions | 0 | 0 | 0 |
Balance at End of Year | 114,523 | 63,278 | 4,239 |
Allowance for sales returns | |||
Valuation and Qualifying Accounts | |||
Balance at Beginning of Year | 17,391 | 18,176 | 17,896 |
Charged to Expense | 174,864 | 169,398 | 163,693 |
Deductions | 176,994 | 170,183 | 163,413 |
Balance at End of Year | 15,261 | 17,391 | 18,176 |
Allowance for doubtful accounts | |||
Valuation and Qualifying Accounts | |||
Balance at Beginning of Year | 1,253 | 1,999 | 465 |
Charged to Expense | 883 | 309 | 1,608 |
Deductions | 20 | 1,055 | 74 |
Balance at End of Year | $ 2,116 | $ 1,253 | $ 1,999 |