Cover Page
Cover Page - shares | 6 Months Ended | |
Jun. 30, 2020 | Jul. 31, 2020 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Jun. 30, 2020 | |
Document Transition Report | false | |
Entity File Number | 000-49799 | |
Entity Registrant Name | OVERSTOCK.COM, INC. | |
Entity Incorporation, State or Country Code | DE | |
Entity Tax Identification Number | 87-0634302 | |
Entity Address, Address Line One | 799 West Coliseum Way | |
Entity Address, City or Town | Midvale | |
Entity Address, State or Province | UT | |
Entity Address, Postal Zip Code | 84047 | |
City Area Code | 801 | |
Local Phone Number | 947-3100 | |
Entity Information, Former Legal or Registered Name | Not Applicable | |
Title of 12(b) Security | Common Stock, $0.0001 par value | |
Trading Symbol | OSTK | |
Security Exchange Name | NASDAQ | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 40,332,985 | |
Entity Central Index Key | 0001130713 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --12-31 | |
Document Fiscal Period Focus | Q2 | |
Document Fiscal Year Focus | 2020 |
Consolidated Balance Sheets (Un
Consolidated Balance Sheets (Unaudited) - USD ($) $ in Thousands | Jun. 30, 2020 | Dec. 31, 2019 |
Current assets: | ||
Cash and cash equivalents | $ 318,573 | $ 112,266 |
Restricted cash | 2,637 | 2,632 |
Marketable securities at fair value | 2,122 | 10,308 |
Accounts receivable, net of allowance for credit losses of $1,534 and $2,474 at June 30, 2020 and December 31, 2019, respectively | 47,765 | 24,728 |
Inventories | 6,340 | 5,840 |
Prepaids and other current assets | 22,769 | 21,589 |
Total current assets | 400,206 | 177,363 |
Property and equipment, net | 126,795 | 130,028 |
Intangible assets, net | 9,919 | 11,756 |
Goodwill | 27,120 | 27,120 |
Equity securities | 50,542 | 42,043 |
Operating lease right-of-use assets | 23,387 | 25,384 |
Other long-term assets, net | 7,173 | 4,033 |
Total assets | 645,142 | 417,727 |
Current liabilities: | ||
Accounts payable | 131,101 | 75,416 |
Accrued liabilities | 144,110 | 88,197 |
Unearned revenue | 89,705 | 41,821 |
Operating lease liabilities, current | 4,785 | 6,603 |
Other current liabilities | 4,332 | 3,962 |
Total current liabilities | 374,033 | 215,999 |
Long-term debt, net | 42,948 | 0 |
Operating lease liabilities, non-current | 20,791 | 21,554 |
Other long-term liabilities | 4,022 | 2,319 |
Total liabilities | 441,794 | 239,872 |
Stockholders' equity: | ||
Common stock, $0.0001 par value, authorized shares - 100,000 | 4 | 4 |
Additional paid-in capital | 770,984 | 764,845 |
Accumulated deficit | (560,480) | (580,390) |
Accumulated other comprehensive loss | (560) | (568) |
Treasury stock at cost - 3,553 and 3,326 | (70,537) | (68,807) |
Equity attributable to stockholders of Overstock.com, Inc. | 139,411 | 115,084 |
Equity attributable to noncontrolling interests | 63,937 | 62,771 |
Total stockholders' equity | 203,348 | 177,855 |
Total liabilities and stockholders' equity | 645,142 | 417,727 |
Series A-1 Preferred Stock [Member] | ||
Stockholders' equity: | ||
Preferred stock, $0.0001 par value, authorized shares - 5,000 | 0 | 0 |
Series B Preferred Stock | ||
Stockholders' equity: | ||
Preferred stock, $0.0001 par value, authorized shares - 5,000 | $ 0 | $ 0 |
Consolidated Balance Sheets (_2
Consolidated Balance Sheets (Unaudited) (Parenthetical) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2019 | Jun. 30, 2020 | |
Preferred Stock, Par or Stated Value Per Share | $ 0.0001 | $ 0.0001 |
Preferred stock, shares authorized | 5,000,000 | 5,000,000 |
Common stock, par value (in dollars per share) | $ 0.0001 | $ 0.0001 |
Common stock, shares authorized | 100,000,000 | 100,000,000 |
Common stock, shares issued | 42,790,000 | 43,885,000 |
Common stock, shares outstanding | 39,464,000 | 40,332,000 |
Treasury stock, shares | 3,326,000 | 3,553,000 |
Accounts Receivable, Allowance for Credit Loss, Current | $ (2,474) | $ (1,534) |
Series B Preferred Stock | ||
Preferred stock, shares issued | 357,000 | 357,000 |
Preferred stock, shares outstanding | 357,000 | 357,000 |
Series A-1 Preferred Stock [Member] | ||
Preferred stock, shares issued | 4,210,000 | 4,204,000 |
Dividend declared, not yet distributed (in shares) | 4,085,000 | |
Preferred stock, shares outstanding | 4,210,000 | 4,204,000 |
Consolidated Statements of Oper
Consolidated Statements of Operations (Unaudited) - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
Revenue, net | ||||
Total net revenue | $ 782,544 | $ 373,709 | $ 1,134,117 | $ 741,438 |
Cost of goods sold | ||||
Total cost of goods sold | 602,662 | 299,810 | 878,395 | 594,415 |
Gross profit | 179,882 | 73,899 | 255,722 | 147,023 |
Operating expenses | ||||
Sales and marketing | 79,790 | 34,560 | 116,552 | 68,037 |
Technology | 33,678 | 33,153 | 66,474 | 68,586 |
General and administrative | 27,371 | 31,964 | 59,797 | 72,196 |
Total operating expenses | 140,839 | 99,677 | 242,823 | 208,819 |
Operating income (loss) | 39,043 | (25,778) | 12,899 | (61,796) |
Interest income | 614 | 630 | 886 | 1,033 |
Interest expense | (588) | (105) | (788) | (232) |
Other income (expense), net | (4,171) | (2,995) | 2,512 | (9,267) |
Income (loss) before income taxes | 34,898 | (28,248) | 15,509 | (70,262) |
Provision (benefit) for income taxes | 517 | (622) | 693 | 256 |
Net income (loss) | 34,381 | (27,626) | 14,816 | (70,518) |
Less: Net loss attributable to noncontrolling interests | (1,975) | (2,945) | (5,207) | (6,593) |
Net income (loss) attributable to stockholders of Overstock.com, Inc. | $ 36,356 | $ (24,681) | $ 20,023 | $ (63,925) |
Net income (loss) per common share—basic: | ||||
Net income (loss) attributable to common shares—basic | $ 0.85 | $ (0.69) | $ 0.48 | $ (1.85) |
Weighted average common shares outstanding—basic | 40,329 | 35,225 | 40,243 | 33,806 |
Net income (loss) per common share—diluted: | ||||
Net income (loss) attributable to common shares—diluted | $ 0.84 | $ (0.69) | $ 0.47 | $ (1.85) |
Weighted average common shares outstanding—diluted | 40,590 | 35,225 | 40,440 | 33,806 |
Retail | ||||
Revenue, net | ||||
Total net revenue | $ 766,956 | $ 367,475 | $ 1,106,554 | $ 730,100 |
Cost of goods sold | ||||
Total cost of goods sold | 589,044 | 294,984 | 854,436 | 585,624 |
Gross profit | 177,912 | 72,491 | 252,118 | 144,476 |
Operating expenses | ||||
Total operating expenses | 124,991 | 81,596 | 207,826 | 166,929 |
Income (loss) before income taxes | 52,804 | (9,065) | 43,876 | (22,278) |
Other | ||||
Revenue, net | ||||
Total net revenue | 15,588 | 6,234 | 27,563 | 11,338 |
Cost of goods sold | ||||
Total cost of goods sold | $ 13,618 | $ 4,826 | $ 23,959 | $ 8,791 |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Loss (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
Statement of Comprehensive Income [Abstract] | ||||
Net income (loss) | $ 34,381 | $ (27,626) | $ 14,816 | $ (70,518) |
Other comprehensive income | ||||
Unrealized gain on cash flow hedges, net of expense for taxes of $0, $0, $0, and $0 | 4 | 4 | 8 | 8 |
Other comprehensive income | 4 | 4 | 8 | 8 |
Comprehensive income (loss) | 34,385 | (27,622) | 14,824 | (70,510) |
Less: Comprehensive loss attributable to noncontrolling interests | (1,975) | (2,945) | (5,207) | (6,593) |
Comprehensive income (loss) attributable to stockholders of Overstock.com, Inc. | $ 36,360 | $ (24,677) | $ 20,031 | $ (63,917) |
Consolidated Statements of Co_2
Consolidated Statements of Comprehensive Loss (Unaudited) (Parenthetical) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
Statement of Comprehensive Income [Abstract] | ||||
Unrealized gain on cash flow hedges, net of expense for taxes of $0, $0, $0, and $0 | $ 0 | $ 0 | $ 0 | $ 0 |
Consolidated Statements of Chan
Consolidated Statements of Changes in Stockholders' Equity (Unaudited) - USD ($) shares in Thousands, $ in Thousands | Total | Common stock | Preferred stock | Additional paid-in capital | Accumulated deficit | Accumulated other comprehensive loss | Treasury stock | Parent | Noncontrolling interest | Series A Preferred StockPreferred stock | Series A-1 Preferred Stock [Member] | Series A-1 Preferred Stock [Member]Preferred stock | Series B Preferred Stock | Series B Preferred StockPreferred stock |
Common stock, beginning balance (in shares) at Dec. 31, 2018 | 35,346 | 3,200 | ||||||||||||
Preferred stock, beginning balance (in shares) at Dec. 31, 2018 | 127 | 0 | 355 | |||||||||||
Increase (Decrease) in Stockholders' Equity | ||||||||||||||
Shares converted (in shares) | (1) | (123) | (1) | |||||||||||
Partners' Capital Account, Exchange of Shares | 123 | |||||||||||||
Shares declared, not distributed | 0 | |||||||||||||
Common stock issued upon vesting of restricted stock | 255 | |||||||||||||
Common stock sold through ATM offering | 2,960 | |||||||||||||
Common stock repurchased through business combination | 47 | |||||||||||||
Tax withholding upon vesting of restricted stock | 75 | |||||||||||||
Preferred stock, ending balance (in shares) at Jun. 30, 2019 | 3 | 123 | 356 | |||||||||||
Common stock, ending balance (in shares) at Jun. 30, 2019 | 38,561 | 3,322 | ||||||||||||
Beginning balance at Dec. 31, 2018 | $ 657,981 | $ (458,897) | $ (584) | $ (66,757) | $ 78,960 | |||||||||
Stockholders' Equity, Including Portion Attributable to Noncontrolling Interest [Abstract] | ||||||||||||||
Stock-based compensation to employees and directors | 9,156 | |||||||||||||
Adjustments to Additional Paid in Capital, Noncontrolling Interests | 0 | |||||||||||||
Proceeds from issuance and exercise of stock warrants | $ 52,112 | 52,112 | ||||||||||||
Other | (239) | 425 | (581) | |||||||||||
Net income (loss) attributable to stockholders of Overstock.com, Inc. | (63,925) | (63,925) | ||||||||||||
Net other comprehensive income | 8 | 8 | ||||||||||||
Common stock repurchased through business combination | (643) | |||||||||||||
Tax withholding upon vesting of restricted stock | (1,346) | |||||||||||||
Net loss attributable to noncontrolling interests | (6,593) | (6,593) | ||||||||||||
Ending balance at Jun. 30, 2019 | 199,080 | $ 0 | 719,010 | (522,397) | (576) | $ (68,746) | $ 127,294 | 71,786 | ||||||
Common stock, beginning balance (in shares) at Mar. 31, 2019 | 37,802 | 3,319 | ||||||||||||
Preferred stock, beginning balance (in shares) at Mar. 31, 2019 | 127 | 0 | 355 | |||||||||||
Increase (Decrease) in Stockholders' Equity | ||||||||||||||
Shares converted (in shares) | (1) | (123) | (1) | |||||||||||
Partners' Capital Account, Exchange of Shares | 123 | |||||||||||||
Shares declared, not distributed | 0 | |||||||||||||
Common stock issued upon vesting of restricted stock | 14 | |||||||||||||
Common stock sold through ATM offering | 745 | |||||||||||||
Common stock repurchased through business combination | 0 | |||||||||||||
Tax withholding upon vesting of restricted stock | 3 | |||||||||||||
Preferred stock, ending balance (in shares) at Jun. 30, 2019 | 3 | 123 | 356 | |||||||||||
Common stock, ending balance (in shares) at Jun. 30, 2019 | 38,561 | 3,322 | ||||||||||||
Beginning balance at Mar. 31, 2019 | 701,877 | (497,716) | (580) | $ (68,753) | 74,731 | |||||||||
Stockholders' Equity, Including Portion Attributable to Noncontrolling Interest [Abstract] | ||||||||||||||
Stock-based compensation to employees and directors | 5,171 | |||||||||||||
Adjustments to Additional Paid in Capital, Noncontrolling Interests | 0 | |||||||||||||
Proceeds from issuance and exercise of stock warrants | 12,198 | |||||||||||||
Other | (236) | 0 | 0 | |||||||||||
Net income (loss) attributable to stockholders of Overstock.com, Inc. | (24,681) | (24,681) | ||||||||||||
Net other comprehensive income | 4 | 4 | ||||||||||||
Common stock repurchased through business combination | 0 | |||||||||||||
Tax withholding upon vesting of restricted stock | 7 | |||||||||||||
Net loss attributable to noncontrolling interests | (2,945) | (2,945) | ||||||||||||
Ending balance at Jun. 30, 2019 | 199,080 | 0 | 719,010 | (522,397) | (576) | $ (68,746) | 127,294 | 71,786 | ||||||
Common Stock, Value, Issued | $ 3 | |||||||||||||
Increase (Decrease) in Stockholders' Equity | ||||||||||||||
Total shares of common stock outstanding | 35,239 | |||||||||||||
Common Stock, Value, Issued | $ 4 | |||||||||||||
Total shares of common stock outstanding | 39,464 | |||||||||||||
Common stock, beginning balance (in shares) at Dec. 31, 2019 | 42,790 | 3,326 | ||||||||||||
Preferred stock, beginning balance (in shares) at Dec. 31, 2019 | 0 | 4,210 | 4,210 | 357 | 357 | |||||||||
Increase (Decrease) in Stockholders' Equity | ||||||||||||||
Shares converted (in shares) | 0 | 0 | 0 | |||||||||||
Partners' Capital Account, Exchange of Shares | 0 | |||||||||||||
Shares declared, not distributed | (6) | |||||||||||||
Common stock issued upon vesting of restricted stock | 679 | |||||||||||||
Common stock sold through ATM offering | 416 | |||||||||||||
Common stock repurchased through business combination | 0 | |||||||||||||
Tax withholding upon vesting of restricted stock | 227 | |||||||||||||
Preferred stock, ending balance (in shares) at Jun. 30, 2020 | 0 | 4,204 | 4,204 | 357 | 357 | |||||||||
Common stock, ending balance (in shares) at Jun. 30, 2020 | 43,885 | 3,553 | ||||||||||||
Beginning balance at Dec. 31, 2019 | $ 177,855 | 764,845 | (580,390) | (568) | $ (68,807) | 62,771 | ||||||||
Stockholders' Equity, Including Portion Attributable to Noncontrolling Interest [Abstract] | ||||||||||||||
Stock-based compensation to employees and directors | 5,733 | |||||||||||||
Adjustments to Additional Paid in Capital, Noncontrolling Interests | 5,000 | |||||||||||||
Proceeds from issuance and exercise of stock warrants | 2,848 | 0 | ||||||||||||
Other | 406 | (113) | 1,373 | |||||||||||
Net income (loss) attributable to stockholders of Overstock.com, Inc. | 20,023 | 20,023 | ||||||||||||
Net other comprehensive income | 8 | 8 | ||||||||||||
Common stock repurchased through business combination | 0 | |||||||||||||
Tax withholding upon vesting of restricted stock | (1,730) | |||||||||||||
Net loss attributable to noncontrolling interests | (5,207) | (5,207) | ||||||||||||
Ending balance at Jun. 30, 2020 | 203,348 | 0 | 770,984 | (560,480) | (560) | $ (70,537) | 139,411 | 63,937 | ||||||
Common stock, beginning balance (in shares) at Mar. 31, 2020 | 43,877 | 3,551 | ||||||||||||
Preferred stock, beginning balance (in shares) at Mar. 31, 2020 | 0 | 4,210 | 357 | |||||||||||
Increase (Decrease) in Stockholders' Equity | ||||||||||||||
Shares converted (in shares) | 0 | 0 | 0 | |||||||||||
Partners' Capital Account, Exchange of Shares | 0 | |||||||||||||
Shares declared, not distributed | (6) | |||||||||||||
Common stock issued upon vesting of restricted stock | 8 | |||||||||||||
Common stock sold through ATM offering | 0 | |||||||||||||
Common stock repurchased through business combination | 0 | |||||||||||||
Tax withholding upon vesting of restricted stock | 2 | |||||||||||||
Preferred stock, ending balance (in shares) at Jun. 30, 2020 | 0 | 4,204 | 4,204 | 357 | 357 | |||||||||
Common stock, ending balance (in shares) at Jun. 30, 2020 | 43,885 | 3,553 | ||||||||||||
Beginning balance at Mar. 31, 2020 | 768,055 | (596,723) | (564) | $ (70,493) | 61,376 | |||||||||
Stockholders' Equity, Including Portion Attributable to Noncontrolling Interest [Abstract] | ||||||||||||||
Stock-based compensation to employees and directors | 2,465 | |||||||||||||
Adjustments to Additional Paid in Capital, Noncontrolling Interests | 5,000 | |||||||||||||
Proceeds from issuance and exercise of stock warrants | 0 | |||||||||||||
Other | 464 | (113) | (464) | |||||||||||
Net income (loss) attributable to stockholders of Overstock.com, Inc. | 36,356 | 36,356 | ||||||||||||
Net other comprehensive income | 4 | 4 | ||||||||||||
Common stock repurchased through business combination | 0 | |||||||||||||
Tax withholding upon vesting of restricted stock | (44) | |||||||||||||
Net loss attributable to noncontrolling interests | (1,975) | (1,975) | ||||||||||||
Ending balance at Jun. 30, 2020 | 203,348 | $ 0 | $ 770,984 | $ (560,480) | $ (560) | $ (70,537) | $ 139,411 | $ 63,937 | ||||||
Common Stock, Value, Issued | $ 4 | $ 4 | ||||||||||||
Increase (Decrease) in Stockholders' Equity | ||||||||||||||
Total shares of common stock outstanding | 40,332 | 40,332 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2020 | Jun. 30, 2019 | |
Cash flows from operating activities: | ||
Consolidated net income (loss) | $ 14,816 | $ (70,518) |
Adjustments to reconcile consolidated net income (loss) to net cash provided by (used in) operating activities: | ||
Depreciation and amortization | 15,117 | 15,518 |
Non-cash operating lease cost | 3,029 | 2,992 |
Stock-based compensation to employees and directors | 5,733 | 9,156 |
Impairment of equity securities | 0 | 4,214 |
Losses on equity method securities | 6,013 | 3,058 |
Gain on disposal of business | 10,705 | 0 |
Other non-cash adjustments | 1,960 | 1,360 |
Changes in operating assets and liabilities, net of acquisitions: | ||
Accounts receivable, net | (24,652) | 12,295 |
Inventories | (500) | 2,231 |
Prepaids and other current assets | (3,178) | 3,311 |
Other long-term assets, net | 171 | (547) |
Accounts payable | 54,952 | (31,722) |
Accrued liabilities | 61,625 | (5,317) |
Unearned revenue | 48,109 | (9,628) |
Operating lease liabilities | (3,612) | (2,340) |
Other long-term liabilities | 1,565 | 85 |
Net cash provided by (used in) operating activities | 170,443 | (65,852) |
Cash flows from investing activities: | ||
Purchase of equity securities | (170) | (2,500) |
Proceeds from sale of equity securities and marketable securities | 6,306 | 7,082 |
Acquisitions of businesses, net of cash acquired | 0 | 4,886 |
Expenditures for property and equipment | (9,399) | (10,586) |
Deconsolidation of cash of Medici Land Governance, Inc. | (4,056) | 0 |
Other investing activities, net | (659) | (1,997) |
Net cash used in investing activities | (7,978) | (3,115) |
Cash flows from financing activities: | ||
Payment on long-term debt | (779) | 0 |
Proceeds from long-term debt | 47,500 | 0 |
Proceeds from sale of common stock, net of offering costs | 2,848 | 52,112 |
Payments of taxes withheld upon vesting of restricted stock | (1,730) | (1,346) |
Other financing activities, net | (3,992) | (1,006) |
Net cash provided by financing activities | 43,847 | 49,760 |
Net increase (decrease) in cash, cash equivalents and restricted cash | 206,312 | (19,207) |
Cash, cash equivalents and restricted cash, beginning of period | 114,898 | 142,814 |
Cash, cash equivalents and restricted cash, end of period | 321,210 | 123,607 |
Cash paid during the period: | ||
Interest paid, net of amounts capitalized | 588 | 173 |
Income taxes paid (refunded), net | 65 | (469) |
Non-cash investing and financing activities: | ||
Purchases of property and equipment included in accounts payable and accrued liabilities | 1,053 | 43 |
Recognition of right-of-use assets upon adoption of ASC 842 | 0 | 30,968 |
Deposit applied to business combination purchase price | 0 | 7,347 |
Equity method security applied to business combination purchase price | $ 0 | $ 3,800 |
BASIS OF PRESENTATION
BASIS OF PRESENTATION | 6 Months Ended |
Jun. 30, 2020 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
BASIS OF PRESENTATION | 1. DESCRIPTION OF BUSINESS |
SUMMARY OF SIGNIFICANT ACCOUNTI
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 6 Months Ended |
Jun. 30, 2020 | |
Accounting Policies [Abstract] | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Basis of Presentation We have prepared the accompanying unaudited consolidated financial statements pursuant to the rules and regulations of the Securities and Exchange Commission ("SEC") regarding interim financial reporting. Accordingly, certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States ("GAAP") have been omitted in accordance with the rules and regulations of the SEC. These financial statements should be read in conjunction with our audited annual consolidated financial statements and related notes included in our Annual Report on Form 10-K for the year ended December 31, 2019 . The accompanying unaudited consolidated financial statements reflect all adjustments, consisting only of normal recurring adjustments, which are, in our opinion, necessary for a fair presentation of results for the interim periods presented. The results of operations for the three and six months ended June 30, 2020 are not necessarily indicative of the results to be expected for any future period or the full fiscal year, due to seasonality and other factors. For purposes of comparability, we reclassified other certain immaterial amounts in the prior periods presented to conform with the current period presentation. Principles of consolidation The accompanying consolidated financial statements include our accounts and the accounts of our wholly-owned subsidiaries and other subsidiaries over which we exercise control. All intercompany account balances and transactions have been eliminated in consolidation. In February 2020, Medici Land Governance, Inc. ("MLG"), an indirect majority-owned subsidiary, consummated the sale of shares of its common stock to an unrelated third party. Upon completion of the transaction, our indirect ownership in MLG was reduced from 57% to 35% of MLG's issued and outstanding shares of common stock. As a result of our loss of a controlling financial interest in MLG under the voting interest model, we performed an assessment of control under the variable interest entity ("VIE") model and determined MLG does not meet the qualifications of a VIE for purposes of consolidation. Accordingly, we deconsolidated MLG's consolidated net assets and noncontrolling interest from our consolidated financial statements and results beginning on February 22, 2020, the date that control ceased. The amount of gain recognized on the deconsolidation was $10.7 million , which is included in our consolidated statements of operations in Other income (expense), net. The gain primarily relates to the remeasurement of our retained equity interest in MLG at fair value, which was determined based on the same price per share MLG provided for the sale of common stock to the third-party and price per share we received in settling a portion of our intercompany debt for additional shares in MLG. Post deconsolidation, MLG became one of our equity method investees for which we perform services. See Note 6—Equity Securities for additional information. Use of estimates The preparation of financial statements in conformity with GAAP requires estimates and assumptions that affect the reported amounts of assets and liabilities, revenues and expenses, and related disclosures of contingent liabilities in our consolidated financial statements and accompanying notes. Estimates are used for, but not limited to, receivables valuation, revenue recognition, Club O and gift card breakage, sales returns, vendor incentive discount offers, inventory valuation, depreciable lives and valuation of property and equipment and internally-developed software, goodwill valuation, intangible asset valuation, equity securities valuation, income taxes, stock-based compensation, performance-based compensation, self-funded health insurance liabilities and contingencies. Our estimates involving, among other items, forecasted revenues, sales volume, pricing, cost and availability of inventory, consumer demand and spending habits, the continued operations of our supply chain and logistics network, and the overall impact of social distancing on our workforce are even more difficult to estimate as a result of uncertainties associated with the scope and duration of the pandemic and various actions taken by governmental authorities, private business and other third parties in response to the global novel coronavirus ("COVID-19") pandemic, the ultimate geographic spread of the virus, the ongoing economic effect of the pandemic and the post-pandemic economic recovery. Although these estimates are based on our best knowledge of current events and actions that we may undertake in the future, the variability of these factors depends on a number of conditions, including uncertainty associated with the COVID-19 pandemic, how long these conditions will persist, what additional measures may be introduced by governments or private parties or what effect any such additional measures may have on our business and thus our accounting estimates may change from period to period. To the extent there are differences between these estimates and actual results, our consolidated financial statements may be materially affected. Income taxes Each reporting period 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 available under the tax law 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 our failure to demonstrate sustained profits. We have considered, among other things, the cumulative loss incurred over the three-year period ended June 30, 2020 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 positive 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. Recently adopted accounting standards In June 2016, the FASB issued ASU 2016-13, Financial Instruments — Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments, which revises how entities account for credit losses for most financial assets and certain other instruments that are not measured at fair value through net income. Topic 326 was subsequently amended by ASU 2019-04, Codification Improvements to Topic 326, Financial Instruments — Credit Losses, Topic 815, Derivatives and Hedging, and Topic 825, Financial Instruments and ASU 2019-11, Codification Improvements to Topic 326, Financial Instruments — Credit Losses . Under the guidance, the measurement of credit losses will be based on a current expected credit losses methodology. We adopted the changes under the new standard on January 1, 2020. We utilized a prospective transition approach for our debt securities for which other-than-temporary impairment had been recognized prior to January 1, 2020. As a result, the amortized cost basis remains the same before and after the effective date of ASU 2016-13. The implementation of ASU 2016-13 did not have a material impact on our consolidated financial statements and disclosures. We will continue to actively monitor the impact of the COVID-19 pandemic on expected credit losses. Recently issued accounting standards In December 2019, the FASB issued ASU 2019-12, Income Taxes ("Topic 740") — Simplifying the Accounting for Income Taxes , which removes certain exceptions to the general principles in Topic 740 and amends existing guidance to improve consistent application. For public entities, ASU 2019-12 is required to be adopted for annual periods beginning after December 15, 2020, including interim periods within those fiscal years. Early adoption is permitted. Management is currently evaluating the impact of the adoption of this ASU on our consolidated financial statements and related disclosures. In January 2020, the FASB issued ASU 2020-01, Investments — Equity Securities (Topic 321), Investments — Equity Method and Joint Ventures (Topic 323), and Derivatives and Hedging (Topic 815): Clarifying the Interactions between Topic 321, Topic 323, and Topic 815 , which clarifies the interaction of the accounting for equity securities under Topic 321, the accounting for equity method investments in Topic 323, and the accounting for certain forward contracts and purchased options in Topic 815. For public entities, ASU 2020-01 is required to be adopted for annual periods beginning after December 15, 2020, including interim periods within those fiscal years. Early adoption is permitted. Management is currently evaluating the impact of the adoption of this ASU on our consolidated financial statements and related disclosures. |
FAIR VALUE MEASUREMENT
FAIR VALUE MEASUREMENT | 6 Months Ended |
Jun. 30, 2020 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurement and Measurement Inputs, Recurring and Nonrecurring [Text Block] | 3. FAIR VALUE MEASUREMENT Our financial assets and liabilities are initially measured at fair value, which is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date (exit price). To increase the comparability of fair value measures, the following hierarchy prioritizes the inputs to valuation methodologies used to measure fair value: • Level 1 —Quoted prices for identical instruments in active markets; • Level 2 —Quoted prices for similar instruments in active markets, quoted prices for identical or similar instruments in markets that are not active, and model-derived valuations in which all significant inputs and significant value drivers are observable in active markets; and • Level 3 —Valuations derived from valuation techniques in which one or more significant inputs or significant value drivers are unobservable. Our assets and liabilities that are adjusted to fair value on a recurring basis are cash equivalents, certain equity and marketable securities, and deferred compensation liabilities, which fair values are determined using quoted market prices from daily exchange traded markets on the closing price as of the balance sheet date and are classified as Level 1. Our other financial instruments, including cash, restricted cash, accounts receivable, accounts payable, accrued liabilities, finance obligations, and debt are carried at cost, which approximates their fair value. Certain assets, including long-lived assets, certain equity securities, goodwill, cryptocurrencies, and other intangible assets, are measured at fair value on a nonrecurring basis; that is, the assets are not measured at fair value on an ongoing basis, but are subject to fair value adjustments using fair value measurements with unobservable inputs (level 3), apart from cryptocurrencies which use quoted prices from various digital currency exchanges with active markets, in certain circumstances (e.g., when there is evidence of impairment). The following tables summarize our assets and liabilities measured at fair value on a recurring basis using the following levels of inputs as of June 30, 2020 and December 31, 2019 , as indicated (in thousands): Fair Value Measurements at June 30, 2020: Total Level 1 Level 2 Level 3 Assets: Cash equivalents - Money market mutual funds $ 2,814 $ 2,814 $ — $ — Equity securities, at fair value 500 500 — — Marketable securities, at fair value 2,122 2,122 — — Trading securities held in a "rabbi trust" (1) 108 108 — — Total assets $ 5,544 $ 5,544 $ — $ — Liabilities: Deferred compensation accrual "rabbi trust" (2) $ 112 $ 112 $ — $ — Total liabilities $ 112 $ 112 $ — $ — Fair Value Measurements at December 31, 2019: Total Level 1 Level 2 Level 3 Assets: Cash equivalents - Money market mutual funds $ 2,799 $ 2,799 $ — $ — Equity securities, at fair value 823 823 — — Marketable securities, at fair value 10,308 10,308 — — Trading securities held in a "rabbi trust" (1) 116 116 — — Total assets $ 14,046 $ 14,046 $ — $ — Liabilities: Deferred compensation accrual "rabbi trust" (2) $ 116 $ 116 $ — $ — Total liabilities $ 116 $ 116 $ — $ — ___________________________________________ (1) — Trading securities held in a rabbi trust are included in Prepaids and other current assets and Other long-term assets, net in the consolidated balance sheets. (2) — Non-qualified deferred compensation in a rabbi trust is included in Accrued liabilities and Other long-term liabilities in the consolidated balance sheets. |
Fair Value of Financial Instruments, Policy [Policy Text Block] | Our financial assets and liabilities are initially measured at fair value, which is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date (exit price). To increase the comparability of fair value measures, the following hierarchy prioritizes the inputs to valuation methodologies used to measure fair value: • Level 1 —Quoted prices for identical instruments in active markets; • Level 2 —Quoted prices for similar instruments in active markets, quoted prices for identical or similar instruments in markets that are not active, and model-derived valuations in which all significant inputs and significant value drivers are observable in active markets; and • Level 3 —Valuations derived from valuation techniques in which one or more significant inputs or significant value drivers are unobservable. Our assets and liabilities that are adjusted to fair value on a recurring basis are cash equivalents, certain equity and marketable securities, and deferred compensation liabilities, which fair values are determined using quoted market prices from daily exchange traded markets on the closing price as of the balance sheet date and are classified as Level 1. Our other financial instruments, including cash, restricted cash, accounts receivable, accounts payable, accrued liabilities, finance obligations, and debt are carried at cost, which approximates their fair value. Certain assets, including long-lived assets, certain equity securities, goodwill, cryptocurrencies, and other intangible assets, are measured at fair value on a nonrecurring basis; that is, the assets are not measured at fair value on an ongoing basis, but are subject to fair value adjustments using fair value measurements with unobservable inputs (level 3), apart from cryptocurrencies which use quoted prices from various digital currency exchanges with active markets, in certain circumstances (e.g., when there is evidence of impairment). |
PROPERTY AND EQUIPMENT, NET
PROPERTY AND EQUIPMENT, NET | 6 Months Ended |
Jun. 30, 2020 | |
Property, Plant and Equipment [Line Items] | |
Property, Plant and Equipment, Policy [Policy Text Block] | 4. PROPERTY AND EQUIPMENT, NET Property and equipment, net consist of the following (in thousands): June 30, December 31, 2019 Computer hardware and software $ 230,950 $ 223,309 Building 69,245 69,266 Furniture and equipment 17,314 17,739 Land 12,781 12,781 Leasehold improvements 11,988 11,921 Building machinery and equipment 9,782 9,796 Land improvements 7,004 7,003 359,064 351,815 Less: accumulated depreciation (232,269 ) (221,787 ) Total property and equipment, net $ 126,795 $ 130,028 Capitalized costs associated with internal-use software and website development, both developed internally and acquired externally, and depreciation of costs for the same periods associated with internal-use software and website development consist of the following (in thousands): Three months ended Six months ended 2020 2019 2020 2019 Capitalized internal-use software and website development $ 4,658 $ 4,101 $ 7,590 $ 7,550 Depreciation of internal-use software and website development $ 3,577 $ 3,124 $ 6,923 $ 6,361 Property and equipment depreciation expense is classified within the corresponding operating expense categories on our consolidated statements of operations as follows (in thousands): Three months ended Six months ended 2020 2019 2020 2019 Cost of goods sold - retail $ 177 $ 171 $ 367 $ 346 Technology 4,768 4,892 9,539 10,067 General and administrative 1,685 1,277 3,370 2,501 Total depreciation $ 6,630 $ 6,340 $ 13,276 $ 12,914 |
INTANGIBLE ASSETS AND GOODWILL
INTANGIBLE ASSETS AND GOODWILL | 6 Months Ended |
Jun. 30, 2020 | |
Intangible assets, net [Abstract] | |
Goodwill and Intangible Assets, Intangible Assets, Policy [Policy Text Block] | 5. INTANGIBLE ASSETS Intangible assets, net consist of the following (in thousands): June 30, December 31, Intangible assets subject to amortization, gross $ 30,267 $ 30,284 Less: accumulated amortization of intangible assets subject to amortization (20,348 ) (18,528 ) Total intangible assets, net $ 9,919 $ 11,756 Amortization of intangible assets is classified within the corresponding operating expense categories in our consolidated statements of operations as follows (in thousands): Three months ended Six months ended 2020 2019 2020 2019 Technology $ 846 $ 938 $ 1,693 $ 1,791 Sales and marketing 10 16 21 32 General and administrative 62 170 127 (659 ) Total amortization $ 918 $ 1,124 $ 1,841 $ 1,164 In connection with our 2018 acquisition of Mac Warehouse, we received the final valuation information and completed our determination and allocation of the purchase price during the quarter ended March 31, 2019 and recognized adjustments to the provisional values as of March 31, 2019, which among other items decreased the recognized Intangible assets and resulted in a reversal of previously recognized amortization expense of $1.4 million |
EQUITY SECURITIES
EQUITY SECURITIES | 6 Months Ended |
Jun. 30, 2020 | |
Investments and Equity Securities [Abstract] | |
Investment, Policy [Policy Text Block] | 6. EQUITY SECURITIES Equity securities under ASC 321 Certain of our equity securities lack readily determinable fair values and therefore the securities are measured at cost minus impairment, if any, plus or minus changes resulting from observable price changes in orderly transactions for the identical or similar equity securities of the same issuer. The carrying amount of our equity securities without readily determinable fair values was approximately $3.9 million and $3.9 million at June 30, 2020 and December 31, 2019 , respectively. Cumulative downward adjustments for price changes and impairments for our equity securities without readily determinable fair values were $6.2 million , and the cumulative upward adjustments for price changes to equity investments were $958,000 as of June 30, 2020 . The impairments and downward adjustments for the period related to equity securities without readily determinable fair values at June 30, 2020 and 2019 is as follows (in thousands): Three months ended Six months ended 2020 2019 2020 2019 Impairments and downward adjustments of equity securities without readily determinable fair values $ — $ — $ — $ (2,958 ) Certain of these equity securities and our marketable securities, which had a carrying value of $2.6 million at June 30, 2020 and $11.1 million at December 31, 2019 , are carried at fair value based on Level 1 inputs. See Note 3—Fair Value Measurement . The portion of unrealized gains and losses for the period related to equity securities with readily determinable fair value still held at June 30, 2020 and 2019 is calculated as follows (in thousands): Three months ended Six months ended 2020 2019 2020 2019 Net losses recognized during the period on equity securities and marketable securities $ (836 ) $ (500 ) $ (2,455 ) $ (1,118 ) Less: Net gains recognized during the period on equity securities and marketable securities sold 228 — 2,161 — Unrealized losses during the reporting period on equity securities and marketable securities still held $ (1,064 ) $ (500 ) $ (4,616 ) $ (1,118 ) Equity method securities under ASC 323 Our equity method securities include equity securities in which we can exercise significant influence, but not control, over these entities through either holding more than a 20% voting interest in the entity or through our representation on the entity's board of directors. The following table includes our equity method securities and ownership interest as of June 30, 2020 : Ownership interest Bitt Inc. 21% Boston Security Token Exchange LLC 50% Chainstone Labs, Inc. 29% FinClusive Capital, Inc. 11% GrainChain, Inc. 18% Medici Land Governance, Inc. 35% Minds, Inc. 24% PeerNova, Inc. 11% SettleMint NV 29% Spera, Inc. 19% VinX Network Ltd. 29% Voatz, Inc. 20% The carrying amount of our equity method securities was approximately $46.1 million and $37.3 million at June 30, 2020 and December 31, 2019 , respectively. The following table summarizes the net losses recognized on equity method securities included in Other income (expense), net in our consolidated statements of operations (in thousands): Three months ended Six months ended 2020 2019 2020 2019 Net loss recognized on our proportionate share of the net losses of our equity method securities and amortization of the basis difference $ 3,545 $ 2,033 $ 6,013 $ 3,058 Impairments on equity method securities — 1,256 — 1,256 Net loss recognized during the period on equity method securities sold — — — 524 At June 30, 2020 , we had a $5 million contractual off-balance sheet contingent obligation to provide additional funding in the future to Boston Security Token Exchange LLC ("BSTX") if and when, during the first 48 months after the establishment of the entity, the aggregate cash balance of BSTX's combined bank accounts fall below $2 million for any reason. Subsequent to June 30, 2020, the conditions to fund the obligation were triggered but we have not yet provided the additional funding as of our filing date. For the three and six months ended June 30, 2020 , we recognized $2.5 million and $4.1 million , respectively, of revenue in Other Revenue on our consolidated statements of operations for developer and other secondment services provided to certain of these entities that are accounted for under the equity method. For the three and six months ended June 30, 2019 , we recognized $683,000 and $1.3 million , respectively, of revenue in Other Revenue on our consolidated statements of operations for developer and other secondment services provided to certain of these entities that are accounted for under the equity method. We are party to notes receivable agreements with certain of these equity method entities. The carrying amount of these notes receivables, including accrued interest, was $5.2 million and $4.6 million at June 30, 2020 and December 31, 2019 , respectively, which are included in Other long-term assets, net in the consolidated balance sheets. |
ACCRUED LIABILITIES
ACCRUED LIABILITIES | 6 Months Ended |
Jun. 30, 2020 | |
Payables and Accruals [Abstract] | |
Accounts Payable and Accrued Liabilities Disclosure [Text Block] | 7. ACCRUED LIABILITIES Accrued liabilities consist of the following (in thousands): June 30, December 31, Accounts payable accruals $ 36,732 $ 15,692 Accrued compensation and other related costs 25,305 13,012 Accrued marketing expenses 21,062 13,063 Allowance for returns 18,657 11,107 Sales and other taxes payable 14,222 10,105 Accrued freight 11,706 5,954 Accrued loss contingencies 2,337 9,550 Other accrued expenses 14,089 9,714 Total accrued liabilities $ 144,110 $ 88,197 |
BORROWINGS
BORROWINGS | 6 Months Ended |
Jun. 30, 2020 | |
Debt Disclosure [Abstract] | |
BORROWINGS | 8. BORROWINGS Loan Core Capital Funding Corporation LLC loan agreements In March 2020, we entered into two loan agreements with Loan Core Capital Funding Corporation LLC. The loan agreements provide a $34.5 million Senior Note, carrying interest at an annual rate of 4.242% , and a $13.0 million Mezzanine Note, carrying interest at an annual rate of 5.002% . The loans carry a blended annual interest rate of 4.45% . The Senior Note is for a 10 -year term (stated maturity date is March 6, 2030) and requires interest only payments, with the principal amount and any then unpaid interest due and payable at the end of the 10 -year term. The Mezzanine Note has a stated 10 -year term, though the agreement requires principal and interest payments monthly over approximately a 46 -month payment period. Both loans include certain financial and non-financial covenants and are secured by our corporate headquarters and the related land and rank senior to stockholders. As of June 30, 2020 , the total outstanding debt on these loans was $46.1 million , and the total amount of the current portion of these loans included in Other current liabilities on our consolidated balance sheets was $3.1 million . Our debt issuance costs and debt discount are amortized using the straight-line basis which approximates the effective interest method. Further, the Company will serve as a guarantor under the Senior Note (the "Senior Note Guaranty") and the Mezzanine Note (the "Mezzanine Note Guaranty"). Overstock has agreed under the Senior Note Guaranty to, among other things, maintain, until all of the obligations guaranteed by Overstock under the Senior Note Guaranty have been paid in full, (i) a net worth in excess of $30 million and minimum liquid assets of $3 million for so long as the Mezzanine Note is outstanding, and (ii) a net worth in excess of $15 million and minimum liquid assets of $1 million from and after the date the Mezzanine Note has been paid in full. Overstock has also agreed under the Mezzanine Note Guaranty to, among other things, maintain a net worth in excess of $30 million and minimum liquid assets of $3 million until all obligations guaranteed by Overstock under the Mezzanine Note Guaranty have been paid in full. |
LEASES
LEASES | 6 Months Ended |
Jun. 30, 2020 | |
Leases [Abstract] | |
Lessee, Operating Leases [Text Block] | 9. LEASES We have operating leases for warehouses, office space, and data centers. Our leases have remaining lease terms of 1 year to 11 years , some of which may include options to extend the leases perpetually, and some of which may include options to terminate the leases within 1 year. The following table provides a summary of leases by balance sheet location (in thousands): June 30, 2020 December 31, 2019 Operating right-of-use assets $ 23,387 $ 25,384 Operating lease liabilities, current 4,785 6,603 Operating lease liabilities, non-current 20,791 21,554 The components of lease expenses were as follows (in thousands): Three months ended Six months ended 2020 2019 2020 2019 Operating lease cost $ 1,936 $ 2,363 $ 4,068 $ 4,868 Short-term lease cost 8 28 19 62 Variable lease cost 471 442 888 972 The following tables provide a summary of other information related to leases (in thousands, apart from weighted-average lease term and weighted average discount rate): Six months ended 2020 2019 Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows used in operating leases $ (4,658 ) $ (4,202 ) Right-of-use assets obtained in exchange for new operating lease liabilities $ 1,767 $ 17,090 Weighted-average remaining lease term - operating leases 6.05 years 7.02 years Weighted-average discount rate - operating leases 8 % 8 % Maturity of lease liabilities under our non-cancellable operating leases as of June 30, 2020 , are as follows (in thousands): Payments due by period Amount 2020 (Remainder) $ 3,522 2021 6,214 2022 6,087 2023 5,152 2024 3,965 Thereafter 7,651 Total lease payments 32,591 Less interest 7,015 Present value of lease liabilities $ 25,576 |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 6 Months Ended |
Jun. 30, 2020 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS AND CONTINGENCIES | 10. COMMITMENTS AND CONTINGENCIES Legal proceedings and contingencies From time to time, we are involved in litigation concerning consumer protection, employment, intellectual property, claims under the securities laws, and other commercial matters related to the conduct and operation of our business and the sale of products on our Website. In connection with such litigation, we have been in the past and we may be in the future subject to significant damages. In some instances, other parties may have contractual indemnification obligations to us. However, such contractual obligations may prove unenforceable or non-collectible, and if we cannot enforce or collect on indemnification obligations, we may bear the full responsibility for damages, fees, and costs resulting from such litigation. We may also be subject to penalties and equitable remedies that could force us to alter important business practices. Such litigation could be costly and time consuming and could divert or distract our management and key personnel from our business operations. Due to the uncertainty of litigation and depending on the amount and the timing, an unfavorable resolution of some or all of such matters could materially affect our business, results of operations, financial position, or cash flows. The nature of the loss contingencies relating to claims that have been asserted against us are described below. In September 2009, SpeedTrack, Inc. sued us along with 27 other defendants in the United States District Court in the Northern District of California, alleging that we infringed a patent covering search and categorization software. We believe that certain third-party vendors of products and services sold to us are contractually obligated to indemnify us, and we have tendered defense of the case to an indemnitor who accepted the defense. In April 2016, the court entered an order partially dismissing the claims against us. In May 2016, the plaintiff filed an amended complaint and we filed an answer. In March 2020, the court entered a judgment of non-infringement in our favor and against the plaintiff. In June 2020, the plaintiff filed an appeal to the United States District Court of Appeals for the Federal Circuit. No estimate of the possible loss or range of loss can be made. We intend to vigorously defend this appeal. In June 2013, 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. On June 28, 2019, the court entered a judgment against us in the amount of approximately $7.3 million (for certain unredeemed gift card balances, treble damages, and penalties) as a result of a jury verdict which was returned September 20, 2018. On October 23, 2019, the court entered an award of attorneys' fees and costs of $1.3 million and entered final judgment in the amount of $8.6 million . We filed an appeal in October 2019 which was decided in our favor in June 2020, at which time the Delaware Supreme Court reversed the judgment of the trial court in its entirety. Consequently, we reversed our estimated liability for these amounts that had been included in Accrued liabilities at December 31, 2019 . 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 and the subsequent reversal gain is included in the same as of June 30, 2020 . In February 2018, the Division of Enforcement of the SEC informed tZERO and subsequently informed us that it is conducting an investigation and requested that we and tZERO voluntarily provide certain information and documents related to tZERO and the tZERO security token offering in connection with its investigation. In December 2018, we received a follow-up request from the SEC relating to its investigation. As previously disclosed, on October 7, 2019, we received a subpoena from the SEC requesting documents related to the digital dividend of our Series A-1 preferred stock we announced to stockholders in June 2019 (discussed below in Note 12—Stockholders' Equity ) and requesting 10b-5-1 plans of our officers and directors that were in effect during the period of January 1, 2018 through October 7, 2019. On December 9, 2019, we received a subpoena from the SEC requesting documents related to the GSR transaction and the alternative trading system run by tZERO ATS, LLC. On December 19, 2019, we received a subpoena from the SEC requesting our insider trading policies as well as certain employment and consulting agreements. We also previously received requests from the SEC regarding our communications with our former chief executive officer and director, Patrick Byrne, and the matters referenced in the December 2019 subpoenas. On May 27, 2020, we received a subpoena from the SEC requesting further information regarding the alternative trading system run by tZERO's ATS, LLC. We have responded to all subpoenas and requests for information and will continue to cooperate fully with the SEC in connection with its investigations and information requests. tZERO's broker-dealer subsidiaries are subject to extensive regulatory requirements under federal and state laws and regulations and self-regulatory organization ("SRO") rules. Each of SpeedRoute LLC ("SpeedRoute") and tZERO ATS, LLC is registered with the SEC as a broker-dealer under the Securities Exchange Act of 1934 (the "Exchange Act") and in the states in which it conducts securities business and is a member of FINRA and other SROs (as applicable). In addition, tZERO ATS, LLC owns and operates an alternative trading system registered with the SEC. Each of SpeedRoute and tZERO ATS, LLC is subject to regulation, examination, investigation, and disciplinary action by the SEC, FINRA, and state securities regulators, as well as other governmental authorities and SROs with which it is registered or licensed or of which it is a member. Moreover, as a result of tZERO's projects seeking to apply distributed ledger technologies to the capital markets, tZERO's subsidiaries have been, and remain involved in, ongoing oral and written communications with regulatory authorities. As previously disclosed, tZERO's broker-dealer subsidiaries are currently undergoing various examinations, inquiries, and/or investigations undertaken by various regulatory authorities, which may result in financial and other settlements or penalties. Any significant failure by tZERO's broker-dealer subsidiaries to satisfy regulatory authorities that they are in compliance with all applicable rules and regulations could have a material adverse effect on tZERO and on us. tZERO's subsidiary, tZERO Crypto, Inc., is registered as or is applying to become a money transmitter (or its equivalent) in many states and is subject to extensive regulatory requirements applicable to money services businesses, including the requirements of the Financial Crimes Enforcement Network of the U.S. Department of the Treasury ("FinCEN"), anti-money laundering requirements, know-your-customer requirements, record-keeping, reporting and capital and bonding requirements, and inspection by state and federal regulatory agencies. Compliance with these requirements requires the dedication of significant resources and any material failure by tZERO Crypto, Inc. to remain in compliance with the applicable regulatory requirements could subject it to liability or limit the services it may offer. On September 27, 2019, a purported securities class action lawsuit was filed against us and our former chief executive officer and former chief financial officer in the United States District Court of Utah, alleging violations under Section 10(b), Rule 10b-5, Section 20(a), Section 20(A) of the Exchange Act. On October 8, 2019, October 17, 2019, October 31, 2019, and November 20, 2019, four similar lawsuits were filed in the same court also naming the Company and the above referenced former executives as defendants, bringing similar claims under the Exchange Act, and seeking similar relief. These cases were consolidated into a single lawsuit in December 2019. The Court appointed The Mangrove Partners Master Fund Ltd. as lead plaintiff in January 2020. In March 2020, an amended consolidated complaint was filed against us, our president of retail, our former chief executive officer, and our former chief financial officer. No estimates of the possible losses or range of losses can be made at this time. We intend to vigorously defend this consolidated action. On November 22, 2019, a shareholder derivative suit was filed against us and certain past and present directors and officers of the Company in the United States District Court for the District of Delaware, with allegations that include: (i) breach of fiduciary duties, (ii) unjust enrichment, (iii) insider selling and misappropriation of the Company's information, and (iv) contribution under Sections 10(b) and 21D of the Exchange Act. On December 17, 2019, a similar lawsuit was filed in the same court, naming the same defendants, bringing similar claims, and seeking similar relief. These cases were consolidated into a single lawsuit in January 2020. In March 2020, the court entered a stay on litigation, pending the outcome of the securities class action motion to dismiss. No estimates of the possible losses or range of losses can be made at this time. We intend to vigorously defend these actions. On April 23, 2020, a putative class action lawsuit was filed against us in the Circuit Court of the County of St. Louis, State of Missouri, alleging that we over-collected taxes on products sold into the state of Missouri. No estimate of the possible loss or range of loss can be made at this time. We intend to vigorously defend this action. We establish liabilities when a particular contingency is probable and estimable. At June 30, 2020 and December 31, 2019 , we have accrued $2.3 million and $9.6 million |
INDEMNIFICATIONS AND GUARANTEES
INDEMNIFICATIONS AND GUARANTEES | 6 Months Ended |
Jun. 30, 2020 | |
INDEMNIFICATIONS AND GUARANTEES | |
INDEMNIFICATIONS AND GUARANTEES | 11. INDEMNIFICATIONS AND GUARANTEES During our normal course of business, we have made certain indemnities, commitments, and guarantees under which we may be required to make payments in relation to certain transactions. These indemnities include, but are not limited to, indemnities we entered into in favor of Loan Core Capital Funding Corporation LLC under our loan agreements, various lessors in connection with facility leases for certain claims arising from such facility or lease, the environmental indemnity we entered into in favor of the lenders under our prior loan agreements, customary indemnification arrangements in underwriting agreements and similar agreements, and indemnities to our directors and officers to the maximum extent permitted under the laws of the State of Delaware. The duration of these indemnities, commitments, and guarantees varies, and in certain cases, is indefinite. In addition, the majority of these indemnities, commitments, and guarantees do not provide for any limitation of the maximum potential future payments we could be obligated to make. As such, we are unable to estimate with any reasonableness our potential exposure under these items. We have not recorded any liability for these indemnities, commitments, and guarantees in the accompanying consolidated balance sheets. We do, however, accrue for losses for any known contingent liability, including those that may arise from indemnification provisions, when future payment is both probable and reasonably estimable. |
STOCKHOLDERS' EQUITY
STOCKHOLDERS' EQUITY | 6 Months Ended |
Jun. 30, 2020 | |
Equity [Abstract] | |
STOCKHOLDERS' EQUITY | 12. STOCKHOLDERS' EQUITY Common stock Each share of common stock has the right to one vote. The holders of common stock are also entitled to receive dividends declared by the Board of Directors out of funds legally available, subject to prior rights of holders of all classes of stock outstanding having priority rights as to dividends. On May 19, 2020, we completed the distribution of our announced digital dividend (the "Dividend") payable in shares of our Series A-1 preferred stock. The Dividend was paid out at a ratio of 1:10, so that one share of Series A-1 preferred stock was issued for every ten shares of OSTK common stock, for every ten shares of Series A-1 preferred stock, and for every ten shares of Series B preferred stock held by all holders of such shares as of April 27, 2020, the record date for the Dividend. The number of shares of Series A-1 preferred stock declared as a stock dividend was 4,085 as of December 31, 2019 and the number of shares distributed was 4,079 on May 19, 2020. Preferred stock Each share of our Series A preferred stock, Series A-1 preferred stock, and our Series B preferred stock (collectively, the "preferred shares"), except as required by law, are intended to have voting and dividend rights similar to those of one share of common stock. Preferred shares rank senior to common stock with respect to dividends. Holders of the preferred shares are entitled to an annual cash dividend of $0.16 per share, in preference to any dividend payment to the holders of the common stock, out of funds of the Company legally available for payment of dividends and subject to declaration by our Board of Directors. Holders of the preferred shares are also entitled to participate in any cash dividends we pay to the holders of the common stock and are also entitled to participate in non-cash dividends we pay to holders of the common stock, subject to potentially different treatment if we effect a stock dividend, stock split, or combination of the common stock. There are no arrearages in cumulative preferred dividends. We declared and paid a cash dividend of $0.16 per share to the holders of our preferred stock during 2018 and 2019 . Neither the Series A-1 preferred stock nor Series B preferred stock is required to be converted into or exchanged for shares of our common stock or any other entity; however, at our sole discretion, we may convert the Series A-1 preferred stock into Series B preferred stock at any time on a one -to-one basis. In the event of any liquidation, any amount available for distribution to stockholders after payment of all liabilities will be distributed proportionately, with each share of Series A-1 preferred stock and each share of Series B preferred stock being treated as though it were a share of our common stock. If we are party to any merger or consolidation in which our common stock is changed into or exchanged for stock or other securities of any other person (or the Company) or cash or any other property (or a right to receive the foregoing), we will use all commercially reasonable efforts to cause each outstanding share of the preferred stock to be treated as if such share were an additional outstanding share of common stock in connection with any such transaction. Neither the Series A-1 preferred stock nor the Series B preferred stock is registered under the Exchange Act. JonesTrading Sales Agreement We entered into an Amended and Restated Capital on Demand TM Sales agreement dated June 26, 2020 with JonesTrading Institutional Services LLC ("JonesTrading") and D.A. Davidson & Co. ("D.A. Davidson"), under which we may conduct "at the market" public offerings of our common stock. Under the sales agreement, JonesTrading and D.A. Davidson, acting as our agents, may offer our common stock in the market on a daily basis or otherwise as we request from time to time. We have no obligation to sell additional shares under the sales agreement, but we may do so from time to time. For the six months ended June 30, 2020 , we did not sell any shares of our common stock pursuant to the sales agreement but have received $2.8 million of proceeds that was included in Accounts receivable, net on our consolidated balance sheet at December 31, 2019 for the sale of an aggregate of 415,904 shares of our common stock under the prior iteration of the agreement that were executed in late December 2019. As of June 30, 2020 , we had $150.0 million available under our "at the market" sales program. GSR Agreement On April 1, 2020, tZERO issued 508,710 shares of tZERO common stock, representing approximately 0.5% of the issued and outstanding common stock of tZERO, to GSR Capital Ltd., a Cayman Islands exempted company ("GSR") in exchange for $5.0 million |
STOCK-BASED AWARDS
STOCK-BASED AWARDS | 6 Months Ended |
Jun. 30, 2020 | |
Share-based Payment Arrangement [Abstract] | |
STOCK-BASED AWARDS | 13. STOCK-BASED AWARDS We have equity incentive plans that provide for the grant to employees and board members of stock-based awards, including stock options and restricted stock. Employee accounting applies to awards granted by the Company or subsidiary of the Company or subsidiary's shares only to its own employees, respectively. Stock-based compensation expense is classified within the corresponding operating expense categories on our consolidated statements of operations as follows (in thousands): Three months ended Six months ended 2020 2019 2020 2019 Cost of goods sold — retail $ 49 $ 54 $ 103 $ 101 Sales and marketing 309 533 697 974 Technology 447 1,670 1,362 2,897 General and administrative 1,660 2,914 3,571 5,184 Total stock-based compensation $ 2,465 $ 5,171 $ 5,733 $ 9,156 Overstock restricted stock awards The Overstock.com, Inc. Amended and Restated 2005 Equity Incentive Plan (the "Plan") provides for the grant of incentive stock options to employees and directors of the Company and non-qualified stock options to consultants, as well as restricted stock units and other types of equity awards of the Company. These restricted stock awards generally vest over three years at 33.3% at the end of the first year, 33.3% at the end of the second year and 33.3% at the end of the third year, subject to the recipient's continuing service to us. In addition to our traditional equity awards, during the quarter ended March 31, 2019, we granted 502,765 restricted stock awards with a cumulative grant date fair value of $8.6 million which vested over a one -year period. The cost of restricted stock units is determined using the fair value of our common stock on the date of the grant and compensation expense is either recognized on a straight-line basis over the vesting schedule or on an accelerated schedule when vesting of restricted stock awards exceeds a straight-line basis. The cumulative amount of compensation expense recognized at any point in time is at least equal to the portion of the grant date fair value of the award that is vested at that date. The following table summarizes restricted stock award activity during the six months ended June 30, 2020 (in thousands, except per share data): Six months ended Units Weighted Outstanding—beginning of year 1,051 $ 26.22 Granted at fair value 471 8.89 Vested (679 ) 23.83 Forfeited (101 ) 25.91 Outstanding—end of period 742 $ 17.45 Medici Ventures stock options The Medici Ventures, Inc. ("Medici Ventures") 2017 Stock Option Plan, as amended, provides for the grant of options to employees and directors of and consultants to Medici Ventures to acquire up to approximately 9% of the authorized shares of Medici Ventures' common stock. Medici Ventures authorized 1.5 million shares, 900,000 of which are issued and outstanding to Overstock, and 130,000 of which are subject to the 2017 Stock Option Plan. The remaining 470,000 are authorized but unissued. Options vested under this plan expire at the end of ten years. During the six months ended June 30, 2020 , Medici Ventures granted 13,650 stock options with a cumulative grant date fair value of $282,000 which vest over a three-year period. tZERO equity awards The tZERO Group, Inc. 2017 Equity Incentive Plan, as amended, provides for grants of equity awards to employees and directors of and consultants to tZERO to acquire up to 5% of the authorized shares of tZERO's common stock. During the six months ended June 30, 2020 , tZERO granted 60,000 stock option awards with a cumulative grant date fair value of $46,000 . In June 2020, tZERO completed the restructuring of its outstanding equity awards through the amendment and cancellation of each of its outstanding stock option awards in favor of the issuance of restricted stock unit awards, with each participant under its plan receiving one restricted stock unit for each stock option canceled. In addition to the original service-based vesting condition (generally three years), the restricted stock unit awards include an added performance-based vesting condition that a liquidity event must occur in order for the restricted stock unit awards to vest. The exchange was accounted for as a Type II modification with an incremental fair value of $6.9 million for the modified awards which will be expensed for the fully vested portion of the grant once the performance-based vesting condition becomes probable and the remaining fair value of the grant will be expensed on a straight-line basis over the remaining vesting period. As such, no incremental compensation cost was recognized on the modification date. The original grant date fair value of the stock option awards exchanged for restricted stock unit awards will continue to be expensed on a straight-line basis over their remaining vesting period. During the six months ended June 30, 2020 , tZERO granted 10,541,016 restricted stock awards, including 7,851,016 restricted stock unit awards related to the exchange of stock option unit awards for restricted stock awards. The incremental restricted stock unit awards granted that were not part of the exchange totaled 2,690,000 and had a cumulative grant date fair value of $2.6 million which will be expensed for the fully vested portion of the grant once the performance-based vesting condition becomes probable and the remaining fair value of the grant will be expensed on a straight-line basis over the remaining vesting period. |
REVENUE AND CONTRACT LIABILITY
REVENUE AND CONTRACT LIABILITY | 6 Months Ended |
Jun. 30, 2020 | |
REVENUE AND CONTRACT LIABILITY [Abstract] | |
Revenue [Policy Text Block] | 14. REVENUE AND CONTRACT LIABILITY Revenue Disaggregation Disaggregation of revenue by major product line is included in Segment Information in Note 17—Business Segments . Unearned Revenue The following table provides information about unearned revenue from contracts with customers, including significant changes in unearned revenue balances during the periods presented (in thousands): Amount Unearned revenue at December 31, 2018 $ 50,578 Increase due to deferral of revenue at period end 36,622 Decrease due to beginning contract liabilities recognized as revenue (45,379 ) Unearned revenue at December 31, 2019 41,821 Increase due to deferral of revenue at period end 80,287 Decrease due to beginning contract liabilities recognized as revenue (32,403 ) Unearned revenue at June 30, 2020 $ 89,705 Our total unearned revenue related to outstanding Club O Reward dollars was $8.0 million and $6.7 million at June 30, 2020 and December 31, 2019 , respectively. Breakage income related to Club O Reward dollars and gift cards are recognized as a component of Retail revenue in our consolidated statements of operations. The timing of revenue recognition of these reward dollars is driven by actual customer activities, such as redemptions and expirations. Breakage included in revenue was $1.3 million and $923,000 for the three months ended June 30, 2020 and 2019 and $2.2 million and $2.0 million for the six months ended June 30, 2020 and 2019 . Sales returns allowance The following table provides additions to and deductions from the sales returns allowance (in thousands): Amount Allowance for returns at December 31, 2018 $ 15,261 Additions to the allowance 117,040 Deductions from the allowance (121,194 ) Allowance for returns at December 31, 2019 11,107 Additions to the allowance 92,510 Deductions from the allowance (84,960 ) Allowance for returns at June 30, 2020 $ 18,657 |
OTHER INCOME , NET
OTHER INCOME , NET | 6 Months Ended |
Jun. 30, 2020 | |
Other Income and Expenses [Abstract] | |
OTHER INCOME (EXPENSE), NET | 15. OTHER INCOME (EXPENSE), NET Other income (expense), net consisted of the following (in thousands): Three months ended Six months ended 2020 2019 2020 2019 Gain on deconsolidation of net assets of Medici Land Governance, Inc. $ — $ — $ 10,741 $ — Impairment of equity securities — (1,256 ) — (4,214 ) Gain/(loss) on equity securities and marketable securities (836 ) 220 (2,455 ) (1,376 ) Equity method losses (3,545 ) (2,033 ) (6,013 ) (3,058 ) Other 210 74 239 (619 ) Total other income (expense), net $ (4,171 ) $ (2,995 ) $ 2,512 $ (9,267 ) |
NET INCOME LOSS PER SHARE
NET INCOME LOSS PER SHARE | 6 Months Ended |
Jun. 30, 2020 | |
Earnings Per Share [Abstract] | |
Earnings Per Share, Policy [Policy Text Block] | 16. NET INCOME (LOSS) PER SHARE Our Series A preferred stock, Series A-1 preferred stock, and Series B preferred stock (collectively, the "preferred shares") are considered participating securities, and as a result, net income (loss) per share is calculated using the two-class method. Under this method, we give effect to preferred dividends and then allocate remaining net income (loss) attributable to our stockholders to both common shares and participating securities (based on the percentages outstanding) in determining net income (loss) per common share. Basic net income (loss) per common share is computed by dividing net income (loss) attributable to common shares (after allocating between common shares and participating securities) by the weighted average number of common shares outstanding during the period. Diluted net income (loss) per share is computed by dividing net income (loss) attributable to common shares (after allocating between common shares and participating securities) by the weighted average number of common and potential common shares outstanding during the period (after allocating total dilutive shares between our common shares outstanding and our preferred shares outstanding). Potential common shares, comprising incremental common shares issuable upon the exercise of stock options, warrants, and restricted stock awards are included in the calculation of diluted net income (loss) per common share to the extent such shares are dilutive. Net income (loss) attributable to common shares is adjusted for options and restricted stock awards issued by our subsidiaries when the effect of our subsidiary's diluted earnings per share is dilutive. The following table sets forth the computation of basic and diluted net income (loss) per common share for the periods indicated (in thousands, except per share data): Three months ended Six months ended 2020 2019 2020 2019 Net income (loss) attributable to stockholders of Overstock.com, Inc. $ 36,356 $ (24,681 ) $ 20,023 $ (63,925 ) Less: Preferred stock TZROP repurchase loss — — — (425 ) Less: Preferred stock dividends - declared and accumulated 179 19 198 38 Undistributed income (loss) 36,177 (24,700 ) 19,825 (63,538 ) Less: Undistributed income (loss) allocated to participating securities 2,039 (333 ) 687 (892 ) Net income (loss) attributable to common shares $ 34,138 $ (24,367 ) $ 19,138 $ (62,646 ) Net income (loss) per common share—basic: Net income (loss) attributable to common shares—basic $ 0.85 $ (0.69 ) $ 0.48 $ (1.85 ) Weighted average common shares outstanding—basic 40,329 35,225 40,243 33,806 Effect of dilutive securities: Stock options and restricted stock awards 261 — 197 — Weighted average common shares outstanding—diluted 40,590 35,225 40,440 33,806 Net income (loss) attributable to common shares—diluted $ 0.84 $ (0.69 ) $ 0.47 $ (1.85 ) The following shares were excluded from the calculation of diluted shares outstanding as their effect would have been anti-dilutive (in thousands): Three months ended Six months ended 2020 2019 2020 2019 Stock options and restricted stock units 168 904 451 967 |
BUSINESS SEGMENTS
BUSINESS SEGMENTS | 6 Months Ended |
Jun. 30, 2020 | |
Segment Reporting [Abstract] | |
Segment Reporting Disclosure [Text Block] | 17. BUSINESS SEGMENTS Segment information has been prepared in accordance with ASC Topic 280 Segment Reporting . We determined our segments based on how we manage our business. We allocate corporate support costs (administrative functions such as finance, human resources, and legal) to our operating segments based on their estimated usage and based on how we manage our business. Our Medici business includes two reportable segments, tZERO and the unconsolidated financial information for Medici Ventures ("MVI"). MVI was identified as a reportable segment during 2019. We have recast prior period segment information to conform with current year presentation. MVI consists of the Medici business not associated with tZERO. We use income (loss) before income taxes as the measure to determine our reportable segments. Other consists of MLG, which we deconsolidated MLG's consolidated net assets and noncontrolling interest from our consolidated financial statements beginning on February 22, 2020, the date that control ceased, and our unallocated corporate support costs. Our Retail segment primarily consists of amounts earned through e-commerce sales through our Website, excluding intercompany transactions eliminated in consolidation. Our tZERO segment primarily consists of amounts earned through securities transactions through our broker-dealers and costs incurred to execute our tZERO business initiatives, excluding intercompany transactions eliminated in consolidation. Our MVI segment primarily consists of costs incurred to create or foster a set of products and solutions that leverage blockchain technology to generate efficiencies and increase security and control, excluding intercompany transactions eliminated in consolidation. We do not allocate assets between our segments for our internal management purposes, and as such, they are not presented here. There were no significant inter-segment sales or transfers during the three and six months ended June 30, 2020 and 2019 . The following table summarizes information about reportable segments and a reconciliation to consolidated net income (loss) (in thousands): Three months ended June 30, Retail tZERO MVI Other Total 2020 Net revenue $ 766,956 $ 12,737 $ 2,851 $ — $ 782,544 Cost of goods sold 589,044 10,769 2,849 — 602,662 Gross profit 177,912 1,968 2 — 179,882 Operating expenses 124,991 11,216 2,543 2,089 140,839 Interest and other income (expense), net (1) (117 ) (1,268 ) (2,760 ) — (4,145 ) Income (loss) before income taxes $ 52,804 $ (10,516 ) $ (5,301 ) $ (2,089 ) 34,898 Provision for income taxes 517 Net income (2) $ 34,381 2019 Net revenue $ 367,475 $ 5,551 $ 683 $ — $ 373,709 Cost of goods sold 294,984 4,143 683 — 299,810 Gross profit 72,491 1,408 — — 73,899 Operating expenses 81,596 11,743 2,903 3,435 99,677 Interest and other income (expense), net (1) 40 340 (2,847 ) (3 ) (2,470 ) Loss before income taxes $ (9,065 ) $ (9,995 ) $ (5,750 ) $ (3,438 ) (28,248 ) Benefit for income taxes (622 ) Net loss (2) $ (27,626 ) Six months ended June 30, Retail tZERO MVI Other Total 2020 Net revenue $ 1,106,554 $ 22,976 $ 4,425 $ 162 $ 1,134,117 Cost of goods sold 854,436 19,536 4,423 — 878,395 Gross profit 252,118 3,440 2 162 255,722 Operating expenses 207,826 23,474 5,451 6,072 242,823 Interest and other income (expense), net (1) (416 ) (3,050 ) 6,073 3 2,610 Income (loss) before income taxes $ 43,876 $ (23,084 ) $ 624 $ (5,907 ) 15,509 Provision for income taxes 693 Net income (2) $ 14,816 2019 Net revenue $ 730,100 $ 10,047 $ 1,291 $ — $ 741,438 Cost of goods sold 585,624 7,500 1,291 — 594,415 Gross profit 144,476 2,547 — — 147,023 Operating expenses 166,929 27,297 7,157 7,436 208,819 Interest and other income (expense), net (1) 175 (623 ) (8,011 ) (7 ) (8,466 ) Loss before income taxes $ (22,278 ) $ (25,373 ) $ (15,168 ) $ (7,443 ) (70,262 ) Provision for income taxes 256 Net loss (2) $ (70,518 ) __________________________________________ (1) — Excludes intercompany transactions eliminated in consolidation, which consist primarily of service fees and interest. The net amounts of these intercompany transactions were $1.2 million and $491,000 for the three months ended June 30, 2020 and 2019 , and $2.3 million and $907,000 for the six months ended June 30, 2020 and 2019 . (2) — Net income (loss) presented for segment reporting purposes is before any adjustments attributable to noncontrolling interests. Upon deconsolidation of MLG, we recognized our retained equity interest in MLG as an equity method security held by our MVI segment which resulted in a $10.7 million gain included in Interest and other income (expense), net in the table above for our MVI segment for the six months ended June 30, 2020 . See Note 2—Summary of Significant Accounting Policies , Principles of consolidation , for additional details on the gain recognized. For the three and six months ended June 30, 2020 and 2019 , substantially all of our revenues were attributable to customers in the United States. At June 30, 2020 and December 31, 2019 , substantially all our property and equipment were located in the United States. |
BROKER DEALERS
BROKER DEALERS | 6 Months Ended |
Jun. 30, 2020 | |
Brokers and Dealers [Abstract] | |
BROKER DEALERS | 18. BROKER DEALERS tZERO wholly owns two broker-dealers, SpeedRoute and tZERO ATS, LLC, which were 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 alternate trading systems. All of SpeedRoute's customers are registered broker-dealers. SpeedRoute does not hold, own, or sell securities. tZERO ATS, LLC is a FINRA-registered broker-dealer that owns and operates the tZERO ATS and is a wholly-owned subsidiary of tZERO. The tZERO ATS is a closed trading system available only to broker-dealer subscribers. The tZERO ATS does not accept orders from non-broker-dealers, nor does it hold, own or sell securities. The tZERO ATS currently supports the trading of two digital securities, the Series A-1 preferred stock and TZROP and, in the future, is expected to support digital securities from other issuers. SpeedRoute and tZERO ATS, LLC 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. The following table summarizes the net capital ratio (in thousands, apart from the net capital ratio): June 30, December 31, SpeedRoute Net capital $ 1,535 $ 850 Required net capital 364 145 Net capital, in excess of required $ 1,171 $ 705 Net capital ratio 3.55 2.56 tZERO ATS, LLC Net capital $ 139 $ 110 Required net capital 5 5 Net capital, in excess of required $ 134 $ 105 Net capital ratio 0.14 0.27 SpeedRoute and tZERO ATS, LLC Securities did not have any securities owned or securities sold, not yet purchased at June 30, 2020 and December 31, 2019 , respectively. |
SUMMARY OF SIGNIFICANT ACCOUN_2
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 6 Months Ended |
Jun. 30, 2020 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation We have prepared the accompanying unaudited consolidated financial statements pursuant to the rules and regulations of the Securities and Exchange Commission ("SEC") regarding interim financial reporting. Accordingly, certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States ("GAAP") have been omitted in accordance with the rules and regulations of the SEC. These financial statements should be read in conjunction with our audited annual consolidated financial statements and related notes included in our Annual Report on Form 10-K for the year ended December 31, 2019 . The accompanying unaudited consolidated financial statements reflect all adjustments, consisting only of normal recurring adjustments, which are, in our opinion, necessary for a fair presentation of results for the interim periods presented. The results of operations for the three and six months ended June 30, 2020 are not necessarily indicative of the results to be expected for any future period or the full fiscal year, due to seasonality and other factors. For purposes of comparability, we reclassified other certain immaterial amounts in the prior periods presented to conform with the current period presentation. |
Principles of consolidation | Principles of consolidation The accompanying consolidated financial statements include our accounts and the accounts of our wholly-owned subsidiaries and other subsidiaries over which we exercise control. All intercompany account balances and transactions have been eliminated in consolidation. In February 2020, Medici Land Governance, Inc. ("MLG"), an indirect majority-owned subsidiary, consummated the sale of shares of its common stock to an unrelated third party. Upon completion of the transaction, our indirect ownership in MLG was reduced from 57% to 35% of MLG's issued and outstanding shares of common stock. As a result of our loss of a controlling financial interest in MLG under the voting interest model, we performed an assessment of control under the variable interest entity ("VIE") model and determined MLG does not meet the qualifications of a VIE for purposes of consolidation. Accordingly, we deconsolidated MLG's consolidated net assets and noncontrolling interest from our consolidated financial statements and results beginning on February 22, 2020, the date that control ceased. The amount of gain recognized on the deconsolidation was $10.7 million , which is included in our consolidated statements of operations in Other income (expense), net. The gain primarily relates to the remeasurement of our retained equity interest in MLG at fair value, which was determined based on the same price per share MLG provided for the sale of common stock to the third-party and price per share we received in settling a portion of our intercompany debt for additional shares in MLG. Post deconsolidation, MLG became one of our equity method investees for which we perform services. See Note 6—Equity Securities for additional information. |
Use of estimates | Use of estimates The preparation of financial statements in conformity with GAAP requires estimates and assumptions that affect the reported amounts of assets and liabilities, revenues and expenses, and related disclosures of contingent liabilities in our consolidated financial statements and accompanying notes. Estimates are used for, but not limited to, receivables valuation, revenue recognition, Club O and gift card breakage, sales returns, vendor incentive discount offers, inventory valuation, depreciable lives and valuation of property and equipment and internally-developed software, goodwill valuation, intangible asset valuation, equity securities valuation, income taxes, stock-based compensation, performance-based compensation, self-funded health insurance liabilities and contingencies. Our estimates involving, among other items, forecasted revenues, sales volume, pricing, cost and availability of inventory, consumer demand and spending habits, the continued operations of our supply chain and logistics network, and the overall impact of social distancing on our workforce are even more difficult to estimate as a result of uncertainties associated with the scope and duration of the pandemic and various actions taken by governmental authorities, private business and other third parties in response to the global novel coronavirus ("COVID-19") pandemic, the ultimate geographic spread of the virus, the ongoing economic effect of the pandemic and the post-pandemic economic recovery. Although these estimates are based on our best knowledge of current events and actions that we may undertake in the future, the variability of these factors depends on a number of conditions, including uncertainty associated with the COVID-19 pandemic, how long these conditions will persist, what additional measures may be introduced by governments or private parties or what effect any such additional measures may have on our business and thus our accounting estimates may change from period to period. To the extent there are differences between these estimates and actual results, our consolidated financial statements may be materially affected. |
Income taxes | Income taxes Each reporting period 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 available under the tax law 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 our failure to demonstrate sustained profits. We have considered, among other things, the cumulative loss incurred over the three-year period ended June 30, 2020 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 positive 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. |
Recently adopted and issued accounting standards | Recently adopted accounting standards In June 2016, the FASB issued ASU 2016-13, Financial Instruments — Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments, which revises how entities account for credit losses for most financial assets and certain other instruments that are not measured at fair value through net income. Topic 326 was subsequently amended by ASU 2019-04, Codification Improvements to Topic 326, Financial Instruments — Credit Losses, Topic 815, Derivatives and Hedging, and Topic 825, Financial Instruments and ASU 2019-11, Codification Improvements to Topic 326, Financial Instruments — Credit Losses . Under the guidance, the measurement of credit losses will be based on a current expected credit losses methodology. We adopted the changes under the new standard on January 1, 2020. We utilized a prospective transition approach for our debt securities for which other-than-temporary impairment had been recognized prior to January 1, 2020. As a result, the amortized cost basis remains the same before and after the effective date of ASU 2016-13. The implementation of ASU 2016-13 did not have a material impact on our consolidated financial statements and disclosures. We will continue to actively monitor the impact of the COVID-19 pandemic on expected credit losses. Recently issued accounting standards In December 2019, the FASB issued ASU 2019-12, Income Taxes ("Topic 740") — Simplifying the Accounting for Income Taxes , which removes certain exceptions to the general principles in Topic 740 and amends existing guidance to improve consistent application. For public entities, ASU 2019-12 is required to be adopted for annual periods beginning after December 15, 2020, including interim periods within those fiscal years. Early adoption is permitted. Management is currently evaluating the impact of the adoption of this ASU on our consolidated financial statements and related disclosures. In January 2020, the FASB issued ASU 2020-01, Investments — Equity Securities (Topic 321), Investments — Equity Method and Joint Ventures (Topic 323), and Derivatives and Hedging (Topic 815): Clarifying the Interactions between Topic 321, Topic 323, and Topic 815 , which clarifies the interaction of the accounting for equity securities under Topic 321, the accounting for equity method investments in Topic 323, and the accounting for certain forward contracts and purchased options in Topic 815. For public entities, ASU 2020-01 is required to be adopted for annual periods beginning after December 15, 2020, including interim periods within those fiscal years. Early adoption is permitted. Management is currently evaluating the impact of the adoption of this ASU on our consolidated financial statements and related disclosures. |
PROPERTY AND EQUIPMENT, NET (Ta
PROPERTY AND EQUIPMENT, NET (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Property, Plant and Equipment [Line Items] | |
Schedule of Depreciation and Amortization by Operating Expense Category [Table Text Block] | Property and equipment depreciation expense is classified within the corresponding operating expense categories on our consolidated statements of operations as follows (in thousands): Three months ended Six months ended 2020 2019 2020 2019 Cost of goods sold - retail $ 177 $ 171 $ 367 $ 346 Technology 4,768 4,892 9,539 10,067 General and administrative 1,685 1,277 3,370 2,501 Total depreciation $ 6,630 $ 6,340 $ 13,276 $ 12,914 |
PROPERTY AND EQUIPMENT, NET PP&
PROPERTY AND EQUIPMENT, NET PP&E Components (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Property, Plant and Equipment Components [Abstract] | |
Property, Plant and Equipment [Table Text Block] | Property and equipment, net consist of the following (in thousands): June 30, December 31, 2019 Computer hardware and software $ 230,950 $ 223,309 Building 69,245 69,266 Furniture and equipment 17,314 17,739 Land 12,781 12,781 Leasehold improvements 11,988 11,921 Building machinery and equipment 9,782 9,796 Land improvements 7,004 7,003 359,064 351,815 Less: accumulated depreciation (232,269 ) (221,787 ) Total property and equipment, net $ 126,795 $ 130,028 |
Property, Plant and Equipment Disclosure [Text Block] | 4. PROPERTY AND EQUIPMENT, NET Property and equipment, net consist of the following (in thousands): June 30, December 31, 2019 Computer hardware and software $ 230,950 $ 223,309 Building 69,245 69,266 Furniture and equipment 17,314 17,739 Land 12,781 12,781 Leasehold improvements 11,988 11,921 Building machinery and equipment 9,782 9,796 Land improvements 7,004 7,003 359,064 351,815 Less: accumulated depreciation (232,269 ) (221,787 ) Total property and equipment, net $ 126,795 $ 130,028 Capitalized costs associated with internal-use software and website development, both developed internally and acquired externally, and depreciation of costs for the same periods associated with internal-use software and website development consist of the following (in thousands): Three months ended Six months ended 2020 2019 2020 2019 Capitalized internal-use software and website development $ 4,658 $ 4,101 $ 7,590 $ 7,550 Depreciation of internal-use software and website development $ 3,577 $ 3,124 $ 6,923 $ 6,361 Property and equipment depreciation expense is classified within the corresponding operating expense categories on our consolidated statements of operations as follows (in thousands): Three months ended Six months ended 2020 2019 2020 2019 Cost of goods sold - retail $ 177 $ 171 $ 367 $ 346 Technology 4,768 4,892 9,539 10,067 General and administrative 1,685 1,277 3,370 2,501 Total depreciation $ 6,630 $ 6,340 $ 13,276 $ 12,914 |
PROPERTY AND EQUIPMENT, NET Cap
PROPERTY AND EQUIPMENT, NET Capitalized Software & Website Development (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Capitalized costs [Abstract] | |
Capitalization of Internal Costs, Policy [Policy Text Block] | Capitalized costs associated with internal-use software and website development, both developed internally and acquired externally, and depreciation of costs for the same periods associated with internal-use software and website development consist of the following (in thousands): Three months ended Six months ended 2020 2019 2020 2019 Capitalized internal-use software and website development $ 4,658 $ 4,101 $ 7,590 $ 7,550 Depreciation of internal-use software and website development $ 3,577 $ 3,124 $ 6,923 $ 6,361 |
INTANGIBLE ASSETS AND GOODWILL
INTANGIBLE ASSETS AND GOODWILL (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Intangible assets, net [Abstract] | |
Schedule of Finite-Lived Intangible Assets [Table Text Block] | Intangible assets, net consist of the following (in thousands): June 30, December 31, Intangible assets subject to amortization, gross $ 30,267 $ 30,284 Less: accumulated amortization of intangible assets subject to amortization (20,348 ) (18,528 ) Total intangible assets, net $ 9,919 $ 11,756 |
Finite-lived Intangible Assets Amortization Expense [Table Text Block] | Amortization of intangible assets is classified within the corresponding operating expense categories in our consolidated statements of operations as follows (in thousands): Three months ended Six months ended 2020 2019 2020 2019 Technology $ 846 $ 938 $ 1,693 $ 1,791 Sales and marketing 10 16 21 32 General and administrative 62 170 127 (659 ) Total amortization $ 918 $ 1,124 $ 1,841 $ 1,164 |
EQUITY SECURITIES (Tables)
EQUITY SECURITIES (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Investments and Equity Securities [Abstract] | |
Equity Method Investments [Table Text Block] | The following table summarizes the net losses recognized on equity method securities included in Other income (expense), net in our consolidated statements of operations (in thousands): Three months ended Six months ended 2020 2019 2020 2019 Net loss recognized on our proportionate share of the net losses of our equity method securities and amortization of the basis difference $ 3,545 $ 2,033 $ 6,013 $ 3,058 Impairments on equity method securities — 1,256 — 1,256 Net loss recognized during the period on equity method securities sold — — — 524 |
Debt Securities, Trading, and Equity Securities, FV-NI [Table Text Block] | The portion of unrealized gains and losses for the period related to equity securities with readily determinable fair value still held at June 30, 2020 and 2019 is calculated as follows (in thousands): Three months ended Six months ended 2020 2019 2020 2019 Net losses recognized during the period on equity securities and marketable securities $ (836 ) $ (500 ) $ (2,455 ) $ (1,118 ) Less: Net gains recognized during the period on equity securities and marketable securities sold 228 — 2,161 — Unrealized losses during the reporting period on equity securities and marketable securities still held $ (1,064 ) $ (500 ) $ (4,616 ) $ (1,118 ) |
Equity Securities without Readily Determinable Fair Value [Table Text Block] | The impairments and downward adjustments for the period related to equity securities without readily determinable fair values at June 30, 2020 and 2019 is as follows (in thousands): Three months ended Six months ended 2020 2019 2020 2019 Impairments and downward adjustments of equity securities without readily determinable fair values $ — $ — $ — $ (2,958 ) |
Equity Security Ownership Interest [Table Text Block] | The following table includes our equity method securities and ownership interest as of June 30, 2020 : Ownership interest Bitt Inc. 21% Boston Security Token Exchange LLC 50% Chainstone Labs, Inc. 29% FinClusive Capital, Inc. 11% GrainChain, Inc. 18% Medici Land Governance, Inc. 35% Minds, Inc. 24% PeerNova, Inc. 11% SettleMint NV 29% Spera, Inc. 19% VinX Network Ltd. 29% Voatz, Inc. 20% |
ACCRUED LIABILITIES (Tables)
ACCRUED LIABILITIES (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Payables and Accruals [Abstract] | |
Schedule of Accrued Liabilities | Accrued liabilities consist of the following (in thousands): June 30, December 31, Accounts payable accruals $ 36,732 $ 15,692 Accrued compensation and other related costs 25,305 13,012 Accrued marketing expenses 21,062 13,063 Allowance for returns 18,657 11,107 Sales and other taxes payable 14,222 10,105 Accrued freight 11,706 5,954 Accrued loss contingencies 2,337 9,550 Other accrued expenses 14,089 9,714 Total accrued liabilities $ 144,110 $ 88,197 |
LEASES (Tables)
LEASES (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Leases [Abstract] | |
Schedule of Leases by Balance Sheet Location | The following table provides a summary of leases by balance sheet location (in thousands): June 30, 2020 December 31, 2019 Operating right-of-use assets $ 23,387 $ 25,384 Operating lease liabilities, current 4,785 6,603 Operating lease liabilities, non-current 20,791 21,554 |
Schedule of Components of Lease Costs and Other Operating Lease Information | The following tables provide a summary of other information related to leases (in thousands, apart from weighted-average lease term and weighted average discount rate): Six months ended 2020 2019 Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows used in operating leases $ (4,658 ) $ (4,202 ) Right-of-use assets obtained in exchange for new operating lease liabilities $ 1,767 $ 17,090 Weighted-average remaining lease term - operating leases 6.05 years 7.02 years Weighted-average discount rate - operating leases 8 % 8 % The components of lease expenses were as follows (in thousands): Three months ended Six months ended 2020 2019 2020 2019 Operating lease cost $ 1,936 $ 2,363 $ 4,068 $ 4,868 Short-term lease cost 8 28 19 62 Variable lease cost 471 442 888 972 |
Schedule of Maturities of Lease Liabilities under Operating Leases After Adoption of 842 | Maturity of lease liabilities under our non-cancellable operating leases as of June 30, 2020 , are as follows (in thousands): Payments due by period Amount 2020 (Remainder) $ 3,522 2021 6,214 2022 6,087 2023 5,152 2024 3,965 Thereafter 7,651 Total lease payments 32,591 Less interest 7,015 Present value of lease liabilities $ 25,576 |
STOCK-BASED AWARDS (Tables)
STOCK-BASED AWARDS (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Share-based Payment Arrangement [Abstract] | |
Summary of Stock Based Compensation | Stock-based compensation expense is classified within the corresponding operating expense categories on our consolidated statements of operations as follows (in thousands): Three months ended Six months ended 2020 2019 2020 2019 Cost of goods sold — retail $ 49 $ 54 $ 103 $ 101 Sales and marketing 309 533 697 974 Technology 447 1,670 1,362 2,897 General and administrative 1,660 2,914 3,571 5,184 Total stock-based compensation $ 2,465 $ 5,171 $ 5,733 $ 9,156 |
Summary of Restricted Stock Award Activity | The following table summarizes restricted stock award activity during the six months ended June 30, 2020 (in thousands, except per share data): Six months ended Units Weighted Outstanding—beginning of year 1,051 $ 26.22 Granted at fair value 471 8.89 Vested (679 ) 23.83 Forfeited (101 ) 25.91 Outstanding—end of period 742 $ 17.45 |
REVENUE AND CONTRACT LIABILITY
REVENUE AND CONTRACT LIABILITY (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
REVENUE AND CONTRACT LIABILITY [Abstract] | |
Schedule of Sales Returns, Reserve For Sales Returns [Table Text Block] | The following table provides additions to and deductions from the sales returns allowance (in thousands): Amount Allowance for returns at December 31, 2018 $ 15,261 Additions to the allowance 117,040 Deductions from the allowance (121,194 ) Allowance for returns at December 31, 2019 11,107 Additions to the allowance 92,510 Deductions from the allowance (84,960 ) Allowance for returns at June 30, 2020 $ 18,657 |
Contract with Customer, Asset and Liability [Table Text Block] | The following table provides information about unearned revenue from contracts with customers, including significant changes in unearned revenue balances during the periods presented (in thousands): Amount Unearned revenue at December 31, 2018 $ 50,578 Increase due to deferral of revenue at period end 36,622 Decrease due to beginning contract liabilities recognized as revenue (45,379 ) Unearned revenue at December 31, 2019 41,821 Increase due to deferral of revenue at period end 80,287 Decrease due to beginning contract liabilities recognized as revenue (32,403 ) Unearned revenue at June 30, 2020 $ 89,705 |
OTHER INCOME (EXPENSE), NET (Ta
OTHER INCOME (EXPENSE), NET (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Other Income and Expenses [Abstract] | |
Schedule of Other Income (Expense), Net | Other income (expense), net consisted of the following (in thousands): Three months ended Six months ended 2020 2019 2020 2019 Gain on deconsolidation of net assets of Medici Land Governance, Inc. $ — $ — $ 10,741 $ — Impairment of equity securities — (1,256 ) — (4,214 ) Gain/(loss) on equity securities and marketable securities (836 ) 220 (2,455 ) (1,376 ) Equity method losses (3,545 ) (2,033 ) (6,013 ) (3,058 ) Other 210 74 239 (619 ) Total other income (expense), net $ (4,171 ) $ (2,995 ) $ 2,512 $ (9,267 ) |
NET INCOME LOSS PER SHARE (Tabl
NET INCOME LOSS PER SHARE (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |
Schedule of Antidilutive Securities Excluded from Computation of Earnings Per Share [Table Text Block] | The following shares were excluded from the calculation of diluted shares outstanding as their effect would have been anti-dilutive (in thousands): Three months ended Six months ended 2020 2019 2020 2019 Stock options and restricted stock units 168 904 451 967 |
Schedule of Earnings Per Share, Basic and Diluted [Table Text Block] | The following table sets forth the computation of basic and diluted net income (loss) per common share for the periods indicated (in thousands, except per share data): Three months ended Six months ended 2020 2019 2020 2019 Net income (loss) attributable to stockholders of Overstock.com, Inc. $ 36,356 $ (24,681 ) $ 20,023 $ (63,925 ) Less: Preferred stock TZROP repurchase loss — — — (425 ) Less: Preferred stock dividends - declared and accumulated 179 19 198 38 Undistributed income (loss) 36,177 (24,700 ) 19,825 (63,538 ) Less: Undistributed income (loss) allocated to participating securities 2,039 (333 ) 687 (892 ) Net income (loss) attributable to common shares $ 34,138 $ (24,367 ) $ 19,138 $ (62,646 ) Net income (loss) per common share—basic: Net income (loss) attributable to common shares—basic $ 0.85 $ (0.69 ) $ 0.48 $ (1.85 ) Weighted average common shares outstanding—basic 40,329 35,225 40,243 33,806 Effect of dilutive securities: Stock options and restricted stock awards 261 — 197 — Weighted average common shares outstanding—diluted 40,590 35,225 40,440 33,806 Net income (loss) attributable to common shares—diluted $ 0.84 $ (0.69 ) $ 0.47 $ (1.85 ) |
BUSINESS SEGMENTS (Tables)
BUSINESS SEGMENTS (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
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) (in thousands): Three months ended June 30, Retail tZERO MVI Other Total 2020 Net revenue $ 766,956 $ 12,737 $ 2,851 $ — $ 782,544 Cost of goods sold 589,044 10,769 2,849 — 602,662 Gross profit 177,912 1,968 2 — 179,882 Operating expenses 124,991 11,216 2,543 2,089 140,839 Interest and other income (expense), net (1) (117 ) (1,268 ) (2,760 ) — (4,145 ) Income (loss) before income taxes $ 52,804 $ (10,516 ) $ (5,301 ) $ (2,089 ) 34,898 Provision for income taxes 517 Net income (2) $ 34,381 2019 Net revenue $ 367,475 $ 5,551 $ 683 $ — $ 373,709 Cost of goods sold 294,984 4,143 683 — 299,810 Gross profit 72,491 1,408 — — 73,899 Operating expenses 81,596 11,743 2,903 3,435 99,677 Interest and other income (expense), net (1) 40 340 (2,847 ) (3 ) (2,470 ) Loss before income taxes $ (9,065 ) $ (9,995 ) $ (5,750 ) $ (3,438 ) (28,248 ) Benefit for income taxes (622 ) Net loss (2) $ (27,626 ) Six months ended June 30, Retail tZERO MVI Other Total 2020 Net revenue $ 1,106,554 $ 22,976 $ 4,425 $ 162 $ 1,134,117 Cost of goods sold 854,436 19,536 4,423 — 878,395 Gross profit 252,118 3,440 2 162 255,722 Operating expenses 207,826 23,474 5,451 6,072 242,823 Interest and other income (expense), net (1) (416 ) (3,050 ) 6,073 3 2,610 Income (loss) before income taxes $ 43,876 $ (23,084 ) $ 624 $ (5,907 ) 15,509 Provision for income taxes 693 Net income (2) $ 14,816 2019 Net revenue $ 730,100 $ 10,047 $ 1,291 $ — $ 741,438 Cost of goods sold 585,624 7,500 1,291 — 594,415 Gross profit 144,476 2,547 — — 147,023 Operating expenses 166,929 27,297 7,157 7,436 208,819 Interest and other income (expense), net (1) 175 (623 ) (8,011 ) (7 ) (8,466 ) Loss before income taxes $ (22,278 ) $ (25,373 ) $ (15,168 ) $ (7,443 ) (70,262 ) Provision for income taxes 256 Net loss (2) $ (70,518 ) __________________________________________ (1) — Excludes intercompany transactions eliminated in consolidation, which consist primarily of service fees and interest. The net amounts of these intercompany transactions were $1.2 million and $491,000 for the three months ended June 30, 2020 and 2019 , and $2.3 million and $907,000 for the six months ended June 30, 2020 and 2019 . (2) — Net income (loss) presented for segment reporting purposes is before any adjustments attributable to noncontrolling interests. |
BROKER DEALERS Broker Dealer (T
BROKER DEALERS Broker Dealer (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Brokers and Dealers [Abstract] | |
Brokers and Dealers Disclosure [Text Block] | 18. BROKER DEALERS tZERO wholly owns two broker-dealers, SpeedRoute and tZERO ATS, LLC, which were 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 alternate trading systems. All of SpeedRoute's customers are registered broker-dealers. SpeedRoute does not hold, own, or sell securities. tZERO ATS, LLC is a FINRA-registered broker-dealer that owns and operates the tZERO ATS and is a wholly-owned subsidiary of tZERO. The tZERO ATS is a closed trading system available only to broker-dealer subscribers. The tZERO ATS does not accept orders from non-broker-dealers, nor does it hold, own or sell securities. The tZERO ATS currently supports the trading of two digital securities, the Series A-1 preferred stock and TZROP and, in the future, is expected to support digital securities from other issuers. SpeedRoute and tZERO ATS, LLC 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. The following table summarizes the net capital ratio (in thousands, apart from the net capital ratio): June 30, December 31, SpeedRoute Net capital $ 1,535 $ 850 Required net capital 364 145 Net capital, in excess of required $ 1,171 $ 705 Net capital ratio 3.55 2.56 tZERO ATS, LLC Net capital $ 139 $ 110 Required net capital 5 5 Net capital, in excess of required $ 134 $ 105 Net capital ratio 0.14 0.27 SpeedRoute and tZERO ATS, LLC Securities did not have any securities owned or securities sold, not yet purchased at June 30, 2020 and December 31, 2019 , respectively. |
SUMMARY OF SIGNIFICANT ACCOUN_3
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Principals of Consolidation (Details) - USD ($) $ in Thousands | Feb. 21, 2020 | Jun. 30, 2020 | Jun. 30, 2019 |
Consolidation, Less than Wholly Owned Subsidiary, Parent Ownership Interest, Effects of Changes, Net [Line Items] | |||
Gain (Loss) on Disposition of Business | $ 10,705 | $ 0 | |
Medici Ventures | Medici Land Governance [Member] | |||
Consolidation, Less than Wholly Owned Subsidiary, Parent Ownership Interest, Effects of Changes, Net [Line Items] | |||
Sale of Stock, Percentage of Ownership before Transaction | 57.00% | ||
Sale of Stock, Percentage of Ownership after Transaction | 35.00% |
SUMMARY OF SIGNIFICANT ACCOUN_4
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details 6) | May 19, 2020 |
Series A-1 Preferred Stock [Member] | |
Product Information [Line Items] | |
Preferred Stock Dividends, Ratio Of Number Of Shares Issued For Each Common Share | 0.10 |
SUMMARY OF SIGNIFICANT ACCOUN_5
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Schedule of Deferred Revenues (Details) - USD ($) $ in Thousands | 6 Months Ended | 12 Months Ended | |
Jun. 30, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Accounting Policies [Abstract] | |||
Contract with Customer, Liability | $ 89,705 | $ 41,821 | $ 50,578 |
Increase (Decrease) in Contract with Customer, Liability | 80,287 | 36,622 | |
Contract with Customer, Liability, Revenue Recognized | $ (32,403) | $ (45,379) |
SUMMARY OF SIGNIFICANT ACCOUN_6
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Goodwill, Net of Accumulated Impairment (Details) $ in Thousands | Jun. 30, 2020USD ($) |
Goodwill [Roll Forward] | |
Beginning balance | $ 27,120 |
Ending balance | $ 27,120 |
SUMMARY OF SIGNIFICANT ACCOUN_7
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Impairment for Equity Securities Without Readily Determinable Fair Values (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
Accounting Policies [Abstract] | ||||
Impairments and downward adjustments of equity securities without readily determinable fair values | $ 0 | $ 0 | $ 0 | $ 2,958 |
FAIR VALUE MEASUREMENT (Details
FAIR VALUE MEASUREMENT (Details) - USD ($) $ in Thousands | Jun. 30, 2020 | Dec. 31, 2019 |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash Equivalents Fair Value Disclosure | $ 2,814 | $ 2,799 |
Equity Securities, FV-NI | 500 | 823 |
Marketable Securities | 2,122 | 10,308 |
Debt Securities, Trading, and Equity Securities, FV-NI | 108 | 116 |
Assets, Fair Value Disclosure | 5,544 | 14,046 |
Deferred Compensation Cash-based Arrangements, Liability, Current and Noncurrent | 112 | 116 |
Financial and Nonfinancial Liabilities, Fair Value Disclosure | 112 | 116 |
Fair Value, Inputs, Level 1 [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash Equivalents Fair Value Disclosure | 2,814 | 2,799 |
Equity Securities, FV-NI | 500 | 823 |
Marketable Securities | 2,122 | 10,308 |
Debt Securities, Trading, and Equity Securities, FV-NI | 108 | 116 |
Assets, Fair Value Disclosure | 5,544 | 14,046 |
Deferred Compensation Cash-based Arrangements, Liability, Current and Noncurrent | 112 | 116 |
Financial and Nonfinancial Liabilities, Fair Value Disclosure | 112 | 116 |
Fair Value, Inputs, Level 2 [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash Equivalents Fair Value Disclosure | 0 | 0 |
Equity Securities, FV-NI | 0 | 0 |
Marketable Securities | 0 | 0 |
Debt Securities, Trading, and Equity Securities, FV-NI | 0 | 0 |
Assets, Fair Value Disclosure | 0 | 0 |
Deferred Compensation Cash-based Arrangements, Liability, Current and Noncurrent | 0 | 0 |
Financial and Nonfinancial Liabilities, Fair Value Disclosure | 0 | 0 |
Fair Value, Inputs, Level 3 [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash Equivalents Fair Value Disclosure | 0 | 0 |
Equity Securities, FV-NI | 0 | 0 |
Marketable Securities | 0 | 0 |
Debt Securities, Trading, and Equity Securities, FV-NI | 0 | 0 |
Assets, Fair Value Disclosure | 0 | 0 |
Deferred Compensation Cash-based Arrangements, Liability, Current and Noncurrent | 0 | 0 |
Financial and Nonfinancial Liabilities, Fair Value Disclosure | $ 0 | $ 0 |
PROPERTY AND EQUIPMENT, NET (De
PROPERTY AND EQUIPMENT, NET (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | Dec. 31, 2019 | |
Property, Plant and Equipment [Line Items] | |||||
Depreciation | $ 6,630 | $ 6,340 | $ 13,276 | $ 12,914 | |
Property, Plant and Equipment, Gross | 359,064 | 359,064 | $ 351,815 | ||
Accumulated Depreciation, Depletion and Amortization, Property, Plant, and Equipment | (232,269) | (232,269) | (221,787) | ||
Property, Plant and Equipment, Net | 126,795 | 126,795 | 130,028 | ||
Cost of goods sold - retail | |||||
Property, Plant and Equipment [Line Items] | |||||
Depreciation | 177 | 171 | 367 | 346 | |
Technology | |||||
Property, Plant and Equipment [Line Items] | |||||
Depreciation | 4,768 | 4,892 | 9,539 | 10,067 | |
General and administrative | |||||
Property, Plant and Equipment [Line Items] | |||||
Depreciation | 1,685 | 1,277 | 3,370 | 2,501 | |
Software Development [Member] | |||||
Property, Plant and Equipment [Line Items] | |||||
Capitalized Computer Software, Additions | 4,658 | 4,101 | 7,590 | 7,550 | |
Capitalized Computer Software, Amortization | 3,577 | $ 3,124 | 6,923 | $ 6,361 | |
Computer hardware and software | |||||
Property, Plant and Equipment [Line Items] | |||||
Property, Plant and Equipment, Gross | 230,950 | 230,950 | 223,309 | ||
Building | |||||
Property, Plant and Equipment [Line Items] | |||||
Property, Plant and Equipment, Gross | 69,245 | 69,245 | 69,266 | ||
Furniture and equipment | |||||
Property, Plant and Equipment [Line Items] | |||||
Property, Plant and Equipment, Gross | 17,314 | 17,314 | 17,739 | ||
Land | |||||
Property, Plant and Equipment [Line Items] | |||||
Property, Plant and Equipment, Gross | 12,781 | 12,781 | 12,781 | ||
Leasehold improvements | |||||
Property, Plant and Equipment [Line Items] | |||||
Property, Plant and Equipment, Gross | 11,988 | 11,988 | 11,921 | ||
Building machinery and equipment | |||||
Property, Plant and Equipment [Line Items] | |||||
Property, Plant and Equipment, Gross | 9,782 | 9,782 | 9,796 | ||
Land improvements | |||||
Property, Plant and Equipment [Line Items] | |||||
Property, Plant and Equipment, Gross | $ 7,004 | $ 7,004 | $ 7,003 |
INTANGIBLE ASSETS AND GOODWIL_2
INTANGIBLE ASSETS AND GOODWILL (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | 9 Months Ended | |||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | Mar. 31, 2019 | Dec. 31, 2019 | |
Finite-Lived Intangible Assets [Line Items] | ||||||
Amortization Of Intangible Assets Including Impact Of Purchase Price Allocation Adjustments | $ 918 | $ 1,124 | $ 1,841 | $ 1,164 | ||
Finite-Lived Intangible Assets, Gross | 30,267 | 30,267 | $ 30,284 | |||
Finite-Lived Intangible Assets, Accumulated Amortization | (20,348) | (20,348) | (18,528) | |||
Intangible Assets, Net (Excluding Goodwill) | 9,919 | 9,919 | $ 11,756 | |||
Technology [Member] | ||||||
Finite-Lived Intangible Assets [Line Items] | ||||||
Amortization of Intangible Assets | 846 | 938 | 1,693 | 1,791 | ||
Selling and Marketing Expense [Member] | ||||||
Finite-Lived Intangible Assets [Line Items] | ||||||
Amortization of Intangible Assets | 10 | 16 | 21 | 32 | ||
General and Administrative Expense [Member] | ||||||
Finite-Lived Intangible Assets [Line Items] | ||||||
Amortization of Intangible Assets | $ 62 | $ 170 | $ 127 | $ (659) | ||
Mac Warehouse, LLC [Member] | ||||||
Finite-Lived Intangible Assets [Line Items] | ||||||
Business Combination, Provisional Information, Initial Accounting Incomplete, Reasons | $ 1,400 |
EQUITY SECURITIES (Details)
EQUITY SECURITIES (Details) - USD ($) | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | Dec. 31, 2019 | |
Debt and Equity Securities, FV-NI [Line Items] | |||||
Equity Securities, FV-NI, Gain (Loss) | $ (836,000) | $ (500,000) | $ (2,455,000) | $ (1,118,000) | |
Equity Securities, FV-NI, Realized Gain (Loss) | 228,000 | 0 | 2,161,000 | 0 | |
Equity Securities, FV-NI, Unrealized Gain (Loss) | (1,064,000) | (500,000) | (4,616,000) | (1,118,000) | |
Fair Value Disclosure, Off-balance Sheet Risks, Face Amount, Liability | 5,000,000 | 5,000,000 | |||
Off-balance Sheet Obligation Threshold | 2,000,000 | 2,000,000 | |||
Other Long-term Investments | 3,900,000 | 3,900,000 | $ 3,900,000 | ||
Equity Securities without Readily Determinable Fair Value, Downward Price Adjustment, Cumulative Amount | 6,200,000 | 6,200,000 | |||
Equity Securities without Readily Determinable Fair Value, Upward Price Adjustment, Cumulative Amount | 958,000 | 958,000 | |||
Equity Securities without Readily Determinable Fair Value, Impairment Loss And Downward Adjustments | 0 | $ 0 | 0 | $ (2,958,000) | |
Marketable Securities and Equity Securities, FV-NI | 2,600,000 | 2,600,000 | 11,100,000 | ||
Equity Method Investments | $ 46,100,000 | $ 46,100,000 | $ 37,300,000 |
EQUITY SECURITIES Equity Method
EQUITY SECURITIES Equity Method Investment, Ownershiop Percentage (Details) | Jun. 30, 2020 |
Bitt Inc. [Member] | |
Schedule of Equity Method Investments [Line Items] | |
Equity Method Investment, Ownership Percentage | 21.00% |
Boston Security Token Exchange LLC [Member] | |
Schedule of Equity Method Investments [Line Items] | |
Equity Method Investment, Ownership Percentage | 50.00% |
Chainstone Labs [Member] | |
Schedule of Equity Method Investments [Line Items] | |
Equity Method Investment, Ownership Percentage | 29.00% |
Finclusive [Member] | |
Schedule of Equity Method Investments [Line Items] | |
Equity Method Investment, Ownership Percentage | 11.00% |
GrainChain, Inc. [Member] | |
Schedule of Equity Method Investments [Line Items] | |
Equity Method Investment, Ownership Percentage | 18.00% |
Medici Land Governance [Member] | |
Schedule of Equity Method Investments [Line Items] | |
Equity Method Investment, Ownership Percentage | 35.00% |
Minds, Inc. [Member] | |
Schedule of Equity Method Investments [Line Items] | |
Equity Method Investment, Ownership Percentage | 24.00% |
PeerNova, Inc. [Member] | |
Schedule of Equity Method Investments [Line Items] | |
Equity Method Investment, Ownership Percentage | 11.00% |
SettleMint NV [Member] | |
Schedule of Equity Method Investments [Line Items] | |
Equity Method Investment, Ownership Percentage | 29.00% |
Spera, Inc. [Member] | |
Schedule of Equity Method Investments [Line Items] | |
Equity Method Investment, Ownership Percentage | 19.00% |
VinX Network Ltd. [Member] | |
Schedule of Equity Method Investments [Line Items] | |
Equity Method Investment, Ownership Percentage | 29.00% |
Voatz, Inc. [Member] | |
Schedule of Equity Method Investments [Line Items] | |
Equity Method Investment, Ownership Percentage | 20.00% |
EQUITY SECURITIES Equity Meth_2
EQUITY SECURITIES Equity Method Investment Net Losses (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
Schedule of Equity Method Investments [Line Items] | ||||
Equity Method Investment, Summarized Financial Information, Net Income (Loss) | $ 3,545 | $ 2,033 | $ 6,013 | $ 3,058 |
Equity Method Investment, Other than Temporary Impairment | 0 | 1,256 | 0 | 1,256 |
Equity Method Investment, Realized Gain (Loss) on Disposal | $ 0 | $ 0 | $ 0 | $ 524 |
EQUITY SECURITIES Revenue from
EQUITY SECURITIES Revenue from Contract with Customer (Details) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
Revenue from External Customer [Line Items] | ||||
Revenue from Contract with Customer, Excluding Assessed Tax | $ 782,544,000 | $ 373,709,000 | $ 1,134,117,000 | $ 741,438,000 |
MVI [Member] | ||||
Revenue from External Customer [Line Items] | ||||
Revenue from Contract with Customer, Excluding Vital Chain and Evernym | 2,500,000 | 4,100,000 | ||
Revenue from Contract with Customer, Excluding Assessed Tax | $ 2,851,000 | $ 683,000 | $ 4,425,000 | $ 1,291,000 |
EQUITY SECURITIES Notes receiva
EQUITY SECURITIES Notes receivable (Details) - USD ($) $ in Millions | Jun. 30, 2020 | Dec. 31, 2019 |
Notes receivable, including accrued interest [Abstract] | ||
Notes Receivable, Related Parties, Noncurrent | $ 5.2 | $ 4.6 |
ACCRUED LIABILITIES (Details)
ACCRUED LIABILITIES (Details) - USD ($) $ in Thousands | Jun. 30, 2020 | Dec. 31, 2019 | Dec. 31, 2018 |
Payables and Accruals [Abstract] | |||
Accounts payable accruals | $ 36,732 | $ 15,692 | |
Accrued compensation and other related costs | 25,305 | 13,012 | |
Accrued marketing expenses | 21,062 | 13,063 | |
Allowance for returns | 18,657 | 11,107 | $ 15,261 |
Sales and other taxes payable | 14,222 | 10,105 | |
Accrued freight | 11,706 | 5,954 | |
Accrued loss contingencies | 2,337 | 9,550 | |
Other accrued expenses | 14,089 | 9,714 | |
Total accrued liabilities | $ 144,110 | $ 88,197 |
BORROWINGS (Details)
BORROWINGS (Details) - USD ($) $ in Thousands | Mar. 06, 2020 | Jun. 30, 2020 | Dec. 31, 2019 |
Debt Instrument [Line Items] | |||
Long-term Debt | $ 42,948 | $ 0 | |
Minimum Liquid Assets Compliance for Duration of Mezzanine Note | 3,000 | ||
Senior Notes | |||
Debt Instrument [Line Items] | |||
Minimum Net Worth Required for Compliance | 30,000 | ||
Minimum Liquid Assets | 3,000 | ||
Mezzanine Note [Member] | |||
Debt Instrument [Line Items] | |||
Minimum Net Worth Required for Compliance | 15,000 | ||
Minimum Liquid Assets | 1,000 | ||
Minimum Net Worth Required for Mezzanine Note Duration | 30,000 | ||
Loan Core Capital Funding Corporation [Member] | |||
Debt Instrument [Line Items] | |||
Senior & Mezzanine Note Total Outstanding | 46,100 | ||
Other Liabilities, Current | $ 3,100 | ||
Loan Core Capital Funding Corporation [Member] | Senior Notes | |||
Debt Instrument [Line Items] | |||
Long-term Debt | $ 34,500 | ||
Annual interest rate | 4.242% | ||
Long-term Debt, Term | 10 years | ||
Loan Core Capital Funding Corporation [Member] | Mezzanine Note [Member] | |||
Debt Instrument [Line Items] | |||
Long-term Debt | $ 13,000 | ||
Annual interest rate | 5.002% | ||
Long-term Debt, Term | 10 years | ||
Long-term Debt, Principal and Interest Only Payments | 46 months | ||
Loan Core Capital Funding Corporation [Member] | Senior and Mezzanine Blended Rate [Member] | |||
Debt Instrument [Line Items] | |||
Annual interest rate | 4.45% |
LEASES - Additional Information
LEASES - Additional Information (Details) | 6 Months Ended |
Jun. 30, 2020 | |
Minimum | |
Lessee, Lease, Description [Line Items] | |
Remaining lease terms | 1 year |
Maximum | |
Lessee, Lease, Description [Line Items] | |
Remaining lease terms | 11 years |
LEASES - Leases by Balance Shee
LEASES - Leases by Balance Sheet Location (Details) - USD ($) $ in Thousands | Jun. 30, 2020 | Dec. 31, 2019 |
Leases [Abstract] | ||
Operating lease right-of-use assets | $ 23,387 | $ 25,384 |
Operating lease liabilities, current | 4,785 | 6,603 |
Operating lease liabilities, non-current | $ 20,791 | $ 21,554 |
LEASES - Components of Lease Co
LEASES - Components of Lease Cost and Other Operating Lease Information (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
Lease, Cost [Abstract] | ||||
Operating lease cost | $ 1,936 | $ 2,363 | $ 4,068 | $ 4,868 |
Short-term lease cost | 8 | 28 | 19 | 62 |
Variable lease cost | $ 471 | $ 442 | 888 | 972 |
Operating cash flows used in operating leases | (4,658) | (4,202) | ||
Right-of-use assets obtained in exchange for new operating lease liabilities | $ 1,767 | $ 17,090 | ||
Weighted-average remaining lease term - operating leases | 6 years 18 days | 7 years 7 days | 6 years 18 days | 7 years 7 days |
Weighted-average discount rate - operating leases | 8.00% | 8.00% | 8.00% | 8.00% |
LEASES - Operating Lease Maturi
LEASES - Operating Lease Maturities and Future Minimum Payments (Details) $ in Thousands | Jun. 30, 2020USD ($) |
Operating Leases After Adoption of 842 | |
Lessee, Operating Lease, Liability, Payments, Remainder of Fiscal Year | $ 3,522 |
Lessee, Operating Lease, Liability, Payments, Due Year Two | 6,214 |
Lessee, Operating Lease, Liability, Payments, Due Year Three | 6,087 |
Lessee, Operating Lease, Liability, Payments, Due Year Four | 5,152 |
Lessee, Operating Lease, Liability, Payments, Due Year Five | 3,965 |
Thereafter | 7,651 |
Total lease payments | 32,591 |
Less interest | 7,015 |
Present value of lease liabilities | $ 25,576 |
COMMITMENTS AND CONTINGENCIES -
COMMITMENTS AND CONTINGENCIES - Additional Information (Details) $ in Millions | Sep. 23, 2009 | Jun. 30, 2020USD ($) | Dec. 31, 2019USD ($) | Oct. 23, 2019USD ($) | Jun. 28, 2019USD ($) |
Loss contingency, legal proceedings | |||||
Estimated litigation liability, including attorney and other costs | $ 1.3 | $ 7.3 | |||
Estimated Litigation Liability | $ 8.6 | ||||
Accrued liabilities for contingencies | $ 2.3 | $ 9.6 | |||
Speed Track Inc [Member] | |||||
Loss contingency, legal proceedings | |||||
Loss Contingency, Number of Defendants | 27 |
STOCKHOLDERS' EQUITY - Preferre
STOCKHOLDERS' EQUITY - Preferred Stock (Details) | May 19, 2020shares | Jun. 30, 2020voteshares | Jun. 30, 2019shares | Jun. 30, 2020vote$ / sharesshares | Jun. 30, 2019shares | Dec. 31, 2019$ / sharesshares | Dec. 31, 2018$ / sharesshares | Mar. 31, 2020shares | Mar. 31, 2019shares |
Class of Stock [Line Items] | |||||||||
Number of Votes Per Common Share Held | vote | 1 | 1 | |||||||
Preferred Stock, Dividend Rate, Per-Dollar-Amount | $ / shares | $ 0.16 | ||||||||
Dividend paid (in usd per share) | $ / shares | $ 0.16 | $ 0.16 | |||||||
Series A-1 Preferred Stock [Member] | |||||||||
Class of Stock [Line Items] | |||||||||
Preferred stock, shares outstanding | 4,204,000 | 4,204,000 | 4,210,000 | ||||||
Preferred Stock Dividends, Shares | 4,085,000 | ||||||||
Preferred Stock Dividends, Shares | 4,079,000 | ||||||||
Number of convertible preferred shares upon conversion (in shares) | 1 | 1 | |||||||
Preferred stock | Series A Preferred Stock | |||||||||
Class of Stock [Line Items] | |||||||||
Shares converted (in shares) | 0 | 1,000 | 0 | 1,000 | |||||
Preferred stock, shares outstanding | 0 | 3,000 | 0 | 3,000 | 0 | 127,000 | 0 | 127,000 | |
Preferred stock | Series A-1 Preferred Stock [Member] | |||||||||
Class of Stock [Line Items] | |||||||||
Shares converted (in shares) | 0 | 123,000 | 0 | 123,000 | |||||
Preferred stock, shares outstanding | 4,204,000 | 123,000 | 4,204,000 | 123,000 | 4,210,000 | 0 | 4,210,000 | 0 |
STOCKHOLDERS' EQUITY - JonesTra
STOCKHOLDERS' EQUITY - JonesTrading Agreements (Details) - USD ($) $ in Thousands | Jun. 30, 2020 | Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 |
Class of Stock [Line Items] | |||||
Noncash Or Part Noncash Acquisition, Proceeds From Sale Of Common Stock Included In Accounts Receivable | $ 2,848 | $ 52,112 | |||
Common Stock, Aggregate Offering Price | $ 150,000 | ||||
Additional paid-in capital | |||||
Class of Stock [Line Items] | |||||
Noncash Or Part Noncash Acquisition, Proceeds From Sale Of Common Stock Included In Accounts Receivable | $ 0 | $ 12,198 | $ 0 | $ 52,112 | |
At-The-Market Agreement [Member] | JonesTrading Institutional Services LLC [Member] | |||||
Class of Stock [Line Items] | |||||
Sale of Stock, Number of Shares Issued in Transaction | 415,904 |
STOCKHOLDERS' EQUITY - GSR Agre
STOCKHOLDERS' EQUITY - GSR Agreement (Details) - tZero.com, Inc. $ in Millions | Apr. 01, 2020USD ($)shares |
Class of Stock [Line Items] | |
Sale of Stock, Number of Shares Issued in Transaction | shares | 508,710 |
Number of shares sold in transaction as percentage of total shares issued and outstanding | 0.50% |
Total consideration received from sale of stock | $ | $ 5 |
STOCK-BASED AWARDS - Stock-base
STOCK-BASED AWARDS - Stock-based Compensation Expense (Details) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||||
Share-based Payment Arrangement, Expense | $ 2,465,000 | $ 5,171,000 | $ 5,733,000 | $ 9,156,000 |
Medici Ventures | Employee Stock Options | ||||
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Gross | 13,650 | |||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Intrinsic Value | 282,000 | $ 282,000 | ||
tZero.com, Inc. | Restricted Stock Awards | ||||
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Gross | 60,000 | |||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Intrinsic Value | 46,000 | $ 46,000 | ||
Cost of Sales [Member] | ||||
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||||
Share-based Payment Arrangement, Expense | 49,000 | 54,000 | 103,000 | 101,000 |
Selling and Marketing Expense [Member] | ||||
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||||
Share-based Payment Arrangement, Expense | 309,000 | 533,000 | 697,000 | 974,000 |
Technology [Member] | ||||
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||||
Share-based Payment Arrangement, Expense | 447,000 | 1,670,000 | 1,362,000 | 2,897,000 |
General and Administrative Expense [Member] | ||||
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||||
Share-based Payment Arrangement, Expense | $ 1,660,000 | $ 2,914,000 | $ 3,571,000 | $ 5,184,000 |
STOCK-BASED AWARDS - Additional
STOCK-BASED AWARDS - Additional Information (Details) - USD ($) | 1 Months Ended | 3 Months Ended | 6 Months Ended | ||||||
Dec. 31, 2017 | Jul. 31, 2017 | Jun. 30, 2020 | Jun. 30, 2019 | Mar. 31, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | Jun. 10, 2020 | Dec. 31, 2019 | |
Weighted Average Grant Date Fair Value | |||||||||
Common stock, shares authorized | 100,000,000 | 100,000,000 | 100,000,000 | ||||||
Common stock, shares issued | 43,885,000 | 43,885,000 | 42,790,000 | ||||||
Stock-based compensation expense | $ 2,465,000 | $ 5,171,000 | $ 5,733,000 | $ 9,156,000 | |||||
Restricted Stock Awards | |||||||||
Units | |||||||||
Outstanding-beginning of year (in shares) | 1,051,000 | ||||||||
Granted at fair value (in shares) | 471,000 | ||||||||
Vested (in shares) | (679,000) | ||||||||
Forfeited (in shares) | (101,000) | ||||||||
Outstanding-end of period (in shares) | 742,000 | 742,000 | |||||||
Weighted Average Grant Date Fair Value | |||||||||
Outstanding-beginning of year (in dollars per share) | $ 26.22 | ||||||||
Granted at fair value (in dollars per share) | 8.89 | ||||||||
Vested (in dollars per share) | 23.83 | ||||||||
Forfeited (in dollars per share) | 25.91 | ||||||||
Outstanding-end of period (in dollars per share) | $ 17.45 | $ 17.45 | |||||||
Restricted Stock Awards | First year | |||||||||
Stock-Based Awards | |||||||||
Annual award vesting percentage | 33.30% | ||||||||
Restricted Stock Awards | Second year | |||||||||
Stock-Based Awards | |||||||||
Annual award vesting percentage | 33.30% | ||||||||
Restricted Stock Awards | Third year | |||||||||
Stock-Based Awards | |||||||||
Annual award vesting percentage | 33.30% | ||||||||
Medici Ventures | |||||||||
Weighted Average Grant Date Fair Value | |||||||||
Common stock, shares authorized | 1,500,000 | ||||||||
Common stock, shares issued | 900,000 | 900,000 | |||||||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Nonvested, Number of Shares | 470,000 | 470,000 | |||||||
Medici Ventures | Employee Stock Options | |||||||||
Units | |||||||||
Share-based Payment Arrangement, Nonvested Award, Option, Cost Not yet Recognized, Amount | $ 282,000 | $ 282,000 | |||||||
Weighted Average Grant Date Fair Value | |||||||||
Restricted stock units authorized, percentage | 9.00% | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Gross | 13,650 | ||||||||
tZero.com, Inc. | Restricted Stock Awards | |||||||||
Units | |||||||||
Granted at fair value (in shares) | 10,541,016 | ||||||||
Share-based Payment Arrangement, Nonvested Award, Option, Cost Not yet Recognized, Amount | 46,000 | $ 46,000 | |||||||
Share-based Payment Arrangement, Nonvested Award, Excluding Option, Cost Not yet Recognized, Amount | $ 6,900,000 | ||||||||
Weighted Average Grant Date Fair Value | |||||||||
Restricted stock units authorized, percentage | 5.00% | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Gross | 60,000 | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Exchange of Options | 7,851,016 | ||||||||
Restricted Stock Unit Awards not Included in Stock Option Exchange | 2,690,000 | ||||||||
Share-based Payment Arrangement, Nonvested Award, Cost Not yet Recognized, Amount | $ 2,600,000 | $ 2,600,000 | |||||||
Equity Incentive Plan, One-Year Vesting | Restricted Stock Awards | |||||||||
Stock-Based Awards | |||||||||
Vesting period | 1 year | ||||||||
Units | |||||||||
Granted at fair value (in shares) | 502,765 | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instrument Other Than Option, Cumulative Grant Date Fair Value | $ 8,600,000 | ||||||||
2017 Stock Option Plan | Medici Ventures | Employee Stock Options | |||||||||
Weighted Average Grant Date Fair Value | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Number | 130,000 | 130,000 |
REVENUE AND CONTRACT LIABILIT_2
REVENUE AND CONTRACT LIABILITY Unearned Revenue (Details) - USD ($) $ in Thousands | 6 Months Ended | 12 Months Ended | |
Jun. 30, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Revenue Recognition, Multiple-deliverable Arrangements [Line Items] | |||
Contract with Customer, Liability | $ 89,705 | $ 41,821 | $ 50,578 |
Increase (Decrease) in Contract with Customer, Liability | 80,287 | 36,622 | |
Contract with Customer, Liability, Revenue Recognized | $ (32,403) | $ (45,379) |
REVENUE AND CONTRACT LIABILIT_3
REVENUE AND CONTRACT LIABILITY Club O Reward Unearned Revenue (Details) - USD ($) | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | Dec. 31, 2019 | |
Revenue Recognition, Multiple-deliverable Arrangements [Line Items] | |||||
Deferred Revenue, Current | $ 89,705,000 | $ 89,705,000 | $ 41,821,000 | ||
Retail | |||||
Revenue Recognition, Multiple-deliverable Arrangements [Line Items] | |||||
Gift Card and Club O Rewards Breakage | 1,300,000 | $ 923,000 | 2,200,000 | $ 2,000,000 | |
Club O Reward Points [Member] | |||||
Revenue Recognition, Multiple-deliverable Arrangements [Line Items] | |||||
Deferred Revenue, Current | $ 8,000,000 | $ 8,000,000 | $ 6,700,000 |
REVENUE AND CONTRACT LIABILIT_4
REVENUE AND CONTRACT LIABILITY Sales Return Allowance (Details) - USD ($) $ in Thousands | 6 Months Ended | 12 Months Ended | |
Jun. 30, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Sales returns allowance [Abstract] | |||
Sales Return, Reserve for Sales Returns, Current | $ 18,657 | $ 11,107 | $ 15,261 |
Sales Returns, Additions To Reserve For Sales Returns | 92,510 | 117,040 | |
Deductions From Sales Returns, Current | $ (84,960) | $ (121,194) |
OTHER INCOME (EXPENSE), NET (De
OTHER INCOME (EXPENSE), NET (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
Other Income and Expenses [Abstract] | ||||
Equity Securities, Gain (Loss) | $ (836) | $ 220 | $ (2,455) | $ (1,376) |
Gain on deconsolidation of net assets of Medici Land Governance, Inc. | 0 | 0 | 10,741 | 0 |
Impairment of equity securities | 0 | (1,256) | 0 | (4,214) |
Equity method losses | (3,545) | (2,033) | (6,013) | (3,058) |
Other | 210 | 74 | 239 | (619) |
Total other income (expense), net | $ (4,171) | $ (2,995) | $ 2,512 | $ (9,267) |
NET INCOME LOSS PER SHARE (Deta
NET INCOME LOSS PER SHARE (Details) - shares shares in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
Share-based Payment Arrangement [Member] | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount | 168 | 904 | 451 | 967 |
NET INCOME LOSS PER SHARE Incom
NET INCOME LOSS PER SHARE Income & Earnings Per Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
Condensed Income Statements, Captions [Line Items] | ||||
Net Income (Loss) Attributable to Parent | $ 36,356 | $ (24,681) | $ 20,023 | $ (63,925) |
Gain (Loss) On Repurchase Of Crypocurrencies | 0 | 0 | 0 | (425) |
Preferred Stock Dividends, Income Statement Impact | 179 | 19 | 198 | 38 |
Net Income (Loss) Available To Common Stockholders, Before Undistributed Earnings (Loss) Allocated To Participating Securities, Basic | 36,177 | (24,700) | 19,825 | (63,538) |
Undistributed Earnings (Loss) Allocated to Participating Securities, Basic | 2,039 | (333) | 687 | (892) |
Net Income (Loss) Available to Common Stockholders, Basic | $ 34,138 | $ (24,367) | $ 19,138 | $ (62,646) |
Earnings Per Share, Basic | $ 0.85 | $ (0.69) | $ 0.48 | $ (1.85) |
Weighted Average Number of Shares Outstanding, Basic | 40,329 | 35,225 | 40,243 | 33,806 |
Incremental Common Shares Attributable to Dilutive Effect of Share-based Payment Arrangements | 261 | 0 | 197 | 0 |
Weighted Average Number of Shares Outstanding, Diluted | 40,590 | 35,225 | 40,440 | 33,806 |
Earnings Per Share, Diluted | $ 0.84 | $ (0.69) | $ 0.47 | $ (1.85) |
BUSINESS SEGMENTS (Details)
BUSINESS SEGMENTS (Details) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
Segment reporting information | ||||
Gain (Loss) on Disposition of Business | $ 10,705,000 | $ 0 | ||
Revenue, net | $ 782,544,000 | $ 373,709,000 | 1,134,117,000 | 741,438,000 |
Cost of goods sold | 602,662,000 | 299,810,000 | 878,395,000 | 594,415,000 |
Gross profit | 179,882,000 | 73,899,000 | 255,722,000 | 147,023,000 |
Operating expenses | 140,839,000 | 99,677,000 | 242,823,000 | 208,819,000 |
Other income (expense), net | (4,145,000) | (2,470,000) | 2,610,000 | (8,466,000) |
Pre-tax income (loss) | 34,898,000 | (28,248,000) | 15,509,000 | (70,262,000) |
Provision for income taxes | 517,000 | (622,000) | 693,000 | 256,000 |
Net income (loss) | 34,381,000 | (27,626,000) | 14,816,000 | (70,518,000) |
Retail Total | ||||
Segment reporting information | ||||
Revenue, net | 766,956,000 | 367,475,000 | 1,106,554,000 | 730,100,000 |
Cost of goods sold | 589,044,000 | 294,984,000 | 854,436,000 | 585,624,000 |
Gross profit | 177,912,000 | 72,491,000 | 252,118,000 | 144,476,000 |
Operating expenses | 124,991,000 | 81,596,000 | 207,826,000 | 166,929,000 |
Other income (expense), net | (117,000) | 40,000 | (416,000) | 175,000 |
Pre-tax income (loss) | 52,804,000 | (9,065,000) | 43,876,000 | (22,278,000) |
tZero.com, Inc. | ||||
Segment reporting information | ||||
Revenue, net | 12,737,000 | 5,551,000 | 22,976,000 | 10,047,000 |
Cost of goods sold | 10,769,000 | 4,143,000 | 19,536,000 | 7,500,000 |
Gross profit | 1,968,000 | 1,408,000 | 3,440,000 | 2,547,000 |
Operating expenses | 11,216,000 | 11,743,000 | 23,474,000 | 27,297,000 |
Other income (expense), net | (1,268,000) | 340,000 | (3,050,000) | (623,000) |
Pre-tax income (loss) | (10,516,000) | (9,995,000) | (23,084,000) | (25,373,000) |
MVI [Member] | ||||
Segment reporting information | ||||
Revenue, net | 2,851,000 | 683,000 | 4,425,000 | 1,291,000 |
Cost of goods sold | 2,849,000 | 683,000 | 4,423,000 | 1,291,000 |
Gross profit | 2,000 | 0 | 2,000 | 0 |
Operating expenses | 2,543,000 | 2,903,000 | 5,451,000 | 7,157,000 |
Other income (expense), net | (2,760,000) | (2,847,000) | 6,073,000 | (8,011,000) |
Pre-tax income (loss) | (5,301,000) | (5,750,000) | 624,000 | (15,168,000) |
Other | ||||
Segment reporting information | ||||
Revenue, net | 0 | 0 | 162,000 | 0 |
Cost of goods sold | 0 | 0 | 0 | 0 |
Gross profit | 0 | 0 | 162,000 | 0 |
Operating expenses | 2,089,000 | 3,435,000 | 6,072,000 | 7,436,000 |
Other income (expense), net | 0 | (3,000) | 3,000 | (7,000) |
Pre-tax income (loss) | (2,089,000) | (3,438,000) | (5,907,000) | (7,443,000) |
Intersegment Eliminations [Member] | ||||
Segment reporting information | ||||
Other income (expense), net | $ 1,200,000 | $ 491,000 | $ 2,300,000 | $ 907,000 |
BROKER DEALERS (Details)
BROKER DEALERS (Details) $ in Thousands | 6 Months Ended | 12 Months Ended |
Jun. 30, 2020USD ($)subsidiary | Dec. 31, 2019USD ($)subsidiary | |
Related Party Transaction [Line Items] | ||
Number Of Broker-Dealer Subsidiary | subsidiary | 2 | 2 |
SpeedRoute | ||
Related Party Transaction [Line Items] | ||
Actual net capital | $ 1,535 | $ 850 |
Minimum required net capital | 364 | 145 |
Amount in excess of required net capital | $ 1,171 | $ 705 |
Net capital ratio | 3.55 | 2.56 |
tZERO ATS, LLC [Member] | ||
Related Party Transaction [Line Items] | ||
Actual net capital | $ 139 | $ 110 |
Minimum required net capital | 5 | 5 |
Amount in excess of required net capital | $ 134 | $ 105 |
Net capital ratio | 0.14 | 0.27 |