December 13, 2019
Jonathan E. Johnson
Chief Executive Officer
Overstock.com, Inc.
799 W. Coliseum Way
Midvale, Utah 84047
Re: Overstock.com, Inc.
Preliminary Proxy Statement on Schedule 14A
Filed November 22, 2019
File No. 000-49799
Dear Mr. Johnson:
We have reviewed your filing and have the following comments. In some of
our
comments, we may ask you to provide us with information so we may better
understand your
disclosure.
Please respond to these comments within ten business days by providing
the requested
information or advise us as soon as possible when you will respond. If you do
not believe our
comments apply to your facts and circumstances, please tell us why in your
response.
After reviewing your response to these comments, we may have additional
comments.
Preliminary Proxy Statement on Schedule 14A filed November 22, 2019
Cover Letter, page 1
1. Please provide us supplementally, or disclose, the factual foundation for
the statement that
the Dividend is "the first of its kind." In this regard, please note that
the factual
foundation for such assertion must be reasonable. Refer to Rule 14a-9.
Background of the Special Meeting of Stockholders
Purpose of the Dividend, page 3
2. We note your disclosure that "[you] believe the Dividend will demonstrate
the benefits
and promise of digitally-enhanced securities on a wide scale while
utilizing tZERO's
proprietary technology," and "[you] expect the Dividend will incentivize
broker-dealers to
participate in and connect with the tZERO platform and the alternative
trading system
operated by PRO Securities, LLC." Please tell us what you mean by your
reference to
"digitally-enhanced securities," when your disclosure elsewhere and in
the appendices
Jonathan E. Johnson
FirstName LastNameJonathan E. Johnson
Overstock.com, Inc.
Comapany13, 2019
December NameOverstock.com, Inc.
Page 2
December 13, 2019 Page 2
FirstName LastName
suggests that it is the stock register that will be digitized, as
opposed to the security itself.
For example, we note that in Appendices A and C to the proxy
statement, the proposed
amendments to Section 11 of the Series A-1 Certificate of Designation
would remove all
references to "digital" in the Series A-1 Certificate of Designation
(other than with respect
to the title of the series of preferred stock). As a related matter,
please explain how you
expect the Dividend to incentivize broker-dealers to participate in
and connect with the
tZERO platform and PRO Securities ATS, and how you expect the Dividend
to help you
"achieve [your] strategic goals with blockchain technology."
Next Steps for Dividend Following Special Meeting, page 3
3. We note your disclosure that, if only Proposal 2 is adopted, or if all
three Proposals fail,
"the Board will need to consider whether these votes represent a
rejection of the
desirability of the Dividend and may consider available alternative
structures to achieve
the objectives of the Dividend." Please clarify what is meant by
"achieve the objectives of
the Dividend," including the specific objectives to which you are
referring, and whether
there are any transactions other than a dividend that you are
considering to achieve your
objectives. Please clearly disclose, if true, that you will be unable
to issue the Dividend if
Proposal 1, and alternatively Proposal 3, is not adopted.
Overstock Announces Registration of Dividend, page 3
4. We note your disclosure that you intend to register the shares of
Series A-1 Preferred
Stock with the SEC "to provide greater liquidity" and "so that [the
shares] would be freely
tradable upon distribution." We believe it is inaccurate to imply that
you are registering
the shares to ensure that they are freely tradable and to provide
greater liquidity, rather
than disclosing simply that the shares will be freely tradable because
the dividend
shares are required to be registered as they represent a disposition
for value. Please revise
this language, and the language on page 29, accordingly. As a related
matter, please
clearly disclose that the shares will be freely tradable only by
non-affiliates.
Purpose and Effect of the Series A-1 Preferred Proposal, page 5
Purpose and Effect of the Series B Preferred Proposal, page 8
5. We note that you refer to "conflicts" in the Certificates of
Designation regarding the
ability of the Board to unilaterally increase or decrease the number
of authorized shares of
Series A-1 Preferred Stock and Series B Preferred Stock. However,
Section 2 of the
Certificates of Designation does not explicitly state that the Board
may increase or
decrease the number of shares of such Series of Preferred Stock
without stockholder
approval. Sections 8 and 9 (as applicable) of the Certificates of
Designation, on the other
hand, state that preferred stockholders "will vote as a class upon any
amendment
increasing or decreasing the aggregate number of authorized shares" of
the applicable
Series of Preferred Stock. In your response letter, please explain why
these sections of the
Certificates of Designation conflict with one another.
Jonathan E. Johnson
FirstName LastNameJonathan E. Johnson
Overstock.com, Inc.
Comapany13, 2019
December NameOverstock.com, Inc.
Page 3
December 13, 2019 Page 3
FirstName LastName
Questions and Answers about the Special Meeting and Procedural Matters
What is the purpose of the Special Meeting?, page 29
6. We note your disclosure that, if adopted, the proposals in this filing
"will allow the Series
A-1 Preferred Stock to be held and traded by a wide group of
investors." Please clarify
that the proposals, if adopted, will allow a wide group of investors
to hold the Series A-1
Preferred Stock, but will not necessarily allow these investors to
trade the Series A-1
Preferred Stock. In this regard, we note your disclosure on page 16
that "[i]n order to sell
the Series A-1 Preferred Stock, however, [investors] must open an
account with an ATS-
subscribing broker-dealer."
What is a quorum?, page 30
7. We note the following statement: "The presence in person or by proxy
of the holders of a
majority of the Voting Shares outstanding on the record date will
constitute a quorum for
the Special Meeting." In your response letter, please explain why
separate quorums are
not also required for the shareholders of the Series A-1 Preferred
Stock and the Series B
Preferred Stock, including with reference to the quorum requirement
set forth in Section
216(4) of the Delaware General Corporation Law (the "DGCL").
General
8. The Proposals appear to bundle numerous material matters, including
changing the
number of authorized shares of the Series A-1 Preferred Stock and the
Series B Preferred
Stock, as well as amending the voting rights of the shareholders of
both Series of
Preferred Stock. In your response letter, please provide an analysis
of how the matters
included in the Proposals comply with Rule 14(a)-4(a)(3).
9. We note that, according to the proxy statement, the separate class
votes of the Series A-1
Preferred Stock and the Series B Preferred Stock each require the
affirmative vote of the
holders of a majority of the outstanding shares of such series of
Preferred Stock, voting
together as a single class. In your response letter, please provide an
analysis as to why
this is the appropriate voting standard for the separate class votes,
as opposed to the
affirmative vote of the majority of the shares of such Series of
Preferred Stock present in
person or represented by proxy at the meeting. In your analysis,
please make reference to
the voting standard set forth in Section 216(4) of the DGCL.
10. We note that Section 8 of the Series B Certificate of Designation
states that "the holders of
the shares of Series B Preferred shall vote together with the holders
of the shares of [the
Blockchain Voting Series A Preferred Stock (the "Series A Preferred
Stock")] and the
holders of the shares of Common Stock," but does not include a
reference to the Series A-
1 Preferred Stock. We further note that you filed a Certificate of
Elimination with respect
to the Series A Preferred Stock, of which no shares remain
outstanding. In your response
letter, please explain whether such reference in the Series B
Certificate of Designation to
the Series A Preferred Stock, as opposed to the Series A-1 Preferred
Stock, affects the
Jonathan E. Johnson
Overstock.com, Inc.
December 13, 2019
Page 4
required votes for the Proposals.
11. We note your disclosure that holders of fractional shares will not
receive the dividend.
Please amend your disclosure to describe what holders of fractional
shares will receive in
lieu of the dividend. If shareholders are receiving cash in lieu of
fractional shares, please
disclose how you will calculate the same.
12. We note your disclosures throughout the proxy statement that if the
proposals are
approved, Series A-1 and Series B preferred shareholders will no longer
be entitled to vote
on the increase or decrease in the number of authorized shares of each
class respectively.
Please amend your disclosures in each relevant proposal to clearly and
prominently
describe that a vote in favor of each relevant proposal will result in
this loss of voting
rights. See Item 12(c) of Schedule 14A. Please also revise the third
paragraph on page 1
of the proxy statement to indicate that you are seeking stockholder
approval to amend the
voting rights of both the Series A-1 Preferred Stock and the Series B
Preferred Stock.
We remind you that the company and its management are responsible for
the accuracy
and adequacy of their disclosures, notwithstanding any review, comments, action
or absence of
action by the staff.
Please contact Katherine Bagley at (202) 551-2545, Valian Afshar at (202)
551-
8729, Ted Yu at (202) 551-7266, or Mara Ransom at (202) 551-3264 with any
questions.
Sincerely,
FirstName LastNameJonathan E. Johnson
Division of
Corporation Finance
Comapany NameOverstock.com, Inc.
Office of Trade &
Services
December 13, 2019 Page 4
cc: Robert W. Reeder III
FirstName LastName