Hedge Fund JAT Urges Overstock.com to Explore Options


Summary: Hedge fund JAT Capital has called on Overstock.com to consider selling assets, restructure management and compensation, and warns of seeking board seats if suggestions are ignored. JAT, who owns a 9.1% stake in Overstock.com, made its demands public after sending a letter to the company. Overstock.com’s stock price rose 9% following the filing. Overstock.com has not yet responded to the request for comment.

Hedge fund JAT Capital has put pressure on Overstock.com to assess its options, including selling certain assets and overhauling its management and compensation. In a regulatory filing, JAT, run by John Thaler, disclosed that it owns a 9.1% stake in the company. The hedge fund decided to make its demands public after sending a letter outlining their wishes to Overstock.com. As a result of the filing, Overstock.com’s stock price jumped nearly 9%. When asked for comment, Overstock.com did not immediately respond.

JAT Capital is not typically known for being an activist investor. However, the filing indicates growing frustration with the company, and JAT has suggested that it may pursue strategies like running a proxy contest. In addition to selling assets and restructuring management and compensation, JAT also wants Overstock.com to prioritize stock option participation and create a business plan with specific financial objectives. The filing concludes with a warning that if the company fails to explore, pursue, and execute the recommended actions satisfactorily, JAT may seek board representation.

Reporting by Svea Herbst-Bayliss; Editing by Richard Chang

Tags: Hedge Fund, JAT, Overstock.com, Assets, Management, Compensation, Proxy Contest, Stock Price, Board Representation