OSTK's stock price

The price of a share of Overstock.com Inc.'s equity has drifted downward considerably since the company filed that shockingly unaudited 10Q a little more than a month ago.

A share was worth $16.25 at the close of business November 16, but only $13.22 after yesterday.

Still, one might fairly argue that the Refco analogy that immediately sprung to my mind at the time was hasty. Refco folded within a single week after its accounting came under scrutiny. That scrutiny began in earnest, as I've mentioned before, on October 10, 2005 when the company announced it had discovered a receivable owed to the company in the amnount of $430 million. Refco filed for chapter 11 protection only one week later. Since Overstock is still around, should we dismiss the proposed analogy?

Not entirely. Financial services firms, like Refco, are especially vulnerable to a quick unravelling, simply because trust is all they are selling. It is their stock in trade. If Overstock were only selling trust in its value as a counter-party, it would likely be done now, too. But Overstock is selling physical merchandise, a fact that can slow the forces of destruction.

The Facebook shenanigans that have more recently garnered attention began well before the fall-out of auditee with auditor. Yet the emergence of the former into the light of dayt so soon after the latter has a poetic appropriateness to it, and some of the statements that Byrne and Bagley have made since the matter became public have had the sound of desperation.

Oh, BTW, a moment ago I mentioned that Overstock sells physical merchandise. I wonder, though, if that is still what underlies its stock price. Perhaps for purposes of stock analysts Overstock is really selling a share of its lawsuits. But more on that possibility another time.

Three brief items

1. Trident Microsystems

Trident, based in Santa Clara, Calif., is a designer and marketer of integrated circuits and associated software. It recently concluded a deal with a Dutch company, NXP Semiconductors, buying NXP's television systems and set-top box business lines.

Pursuant to this deal, NXP is receiving "newly issued shares of Trident common stock equal to 60% of the total shares outstanding post-closing, including approximately 6.7 million shares that NXP will purchase at a price of $4.50 per share, resulting in cash proceeds to Trident of $30 million."

The deal resolves a proxy contest that had been brewing. The disaffected stockholders, led by Spencer Capital Management LLC, had been complaining of Trident's poor performance. Now they seem to concede that Trident is trying a new direction, and they are giving that new tack a chance, withdrawing their intent to nominate a slare of directors.

"They also serve who only stand and threaten."

2. Prepackaged bankruptcy for CIT.

CIT, the bank holding company (NYSE: CIT) the survived a near-death experience in July, has seen its stock price return to ... a little above a dollar.

It continues to work to reduce its $30bn debt load by at least $5.7bn through a debt exchange, and is also soliciting votes for a pre-packaged Chapter 11 bankruptcy filing, which it will use if too few bondholders agree to the debt exchange.

Now Carl Icahn has stepped in, contending that the company's plans are unfair to bondholders, and he has a better idea. It isn't yet clear (to me at any rate) just what his angle on this is. I'm guessing he isn't helping those bondholders out of a charitable impulse.

3. Cerberus consolidates the gun and ammo industry

Cerberus, the hedge fund and private equity fund group that took something of a beating in the automotive industry, is now working on a new business plan.

The Wall Street Journal reports that Cerberus has been in the market for small guns-and-ammo operations see here. It has bought seven of them over three years, and now it has consolidated them into one, and plans to take that one public.

In the first half of 2008, Cerberus owned gun operations lost $6.1 million. In the first half of this year, they made $23 million. That sounds like a nice turnaround.

Beware cries of "crisis"!

It wasn't that long ago (two and a half years, to be precise) that one could encounter anguished talk about the "asbestos liability crisis" devastating U.S. based corporations, and the need for a "global settlement" to be developed in committee rooms on Capitol Hill.

The legislative efforts failed, the Fairness in Asbestos Resolution Act has disappeared, and the unmanaged crisis seems rather to have fizzled away.

One of the corporations that had been most exposed to tort liability of "crisis" proportions was auto parts supplier Federal-Mogul, of Southfield, Michigan. F-M entered bankruptcy court protection in 2001 in an effort to resolve its asbestos liabilities. It was a long haul but the company emerged out from under the court's protection two weeks ago, December 27.

The company was exposed to the mass tort claims mostly by inheritance, via certain acquisitions it had made over the years. It also had some operational exposure. Between 1965 and 1981 Federal-Mogul had operated a division called Vellumoid, which had sold a gasket cut from asbestos-containing sheet material. Plaintiffs alleged they had been exposed to the asbestos while removing the gaskets in the process of repairing automobiles.

I don't know the particulars of how these claims have been resolved, but they must have been resolved somehow -- the asbestos claimants committee agreed to the reorganization plan in November.

Complex and protracted litigation isn't by itself a crisis. It is a byproduct of a complex world and the co-existence of a lot of contending interests.

My own guess would be that all the affected interests have been better served by the failure of the Congressional settlement than they would have been by its success.

And yes, I said yesterday that I planned to write something about the proxy fight at CNET today. But, hey, plans change. We'll get to CNET next week. See ya Sunday.