- Overstock CFO Greg Iverson resigned on Sept. 17, the online retailer said in a press release and regulatory filing. The company did not disclose reasons for the exit of Iverson, who joined last year.
- Replacing Iverson as interim CFO is Robert Hughes, who has previously served as a finance executive for Overstock. Hughes currently is president of Medici Land Governance, a subsidiary of Overstock's blockchain arm. He will keep that role while serving as CFO, the company said.
- The company also named a permanent CEO in Jonathan Johnson, who has been interim CEO since Patrick Byrne left the role in August. Johnson first joined the company in 2002 and has served in various executive roles, including chairman, and his current role as president of Overstock's Medici Ventures blockchain business.
Overstock is in dire need of stability following the tumultuous exit of Byrne, who acquired the company in the late 1990s and grew it into a home and decor e-tailer with nearly $2 billion in sales.
At the time of his departure, Byrne said he had become "too controversial to serve as CEO." He faced more than mere negative chatter, though. His exit had become a financial necessity as Overstock came under pressure by its corporate insurer.
After leaving, Byrne wrote in a blog that Iverson, as CFO, "reported to the board in writing ... that it was 'impossible' to get insurance with me there, and on Monday August 19 in a politely worded letter our insurance brokers at Marsh said much the same thing."
The company's stock had also tanked after a series of statements by and reports about Byrne. In a release to investors, he made allusions to the "deep state" and references to his helping federal investigations into former presidential candidate Hillary Clinton and President Donald Trump. Adding to the intrigue (and confusion) were reports that he had a romantic relationship with an accused spy now serving jail time after getting caught up in the government's probe of Russian interference in the 2016 election. After exiting Byrne sold off all his stock, reportedly worth about $90 million, which Byrne wrote he had invested offshore and could be used as an emergency capital infusion should Overstock fall on tough times in a downturn.
Meanwhile, Overstock just cut its guidance for its retail arm, which is responsible for most of the company's revenue and has been up for sale. Estimates went from adjusted EBITDA of $17.5 million for the third quarter of 2019 to essentially no profit because of China tariffs, waning consumer confidence, the bankruptcy of a delivery vendor, increased corporate insurance premiums and a slowdown in customer conversions from search traffic. Still, the company said it was "confident" in its retail strategy.
Johnson will have his work cut out for him. Not least among the challenges is balancing two very different businesses in its retail and blockchain units. One of those produces hundreds of millions of dollars in revenue, is historically profitable and is on track to be profitable again. The other is unproven and loses tens of millions of dollars per year.