SecProbe.io

June 11, 2010

Jonathan E. Johnson III President Overstock.com, Inc.  6350 South 3000 East  Salt Lake City, Utah 84121

Re: Overstock.com, Inc.
Registration Statement on Form S-1  Filed May 14, 2010    File No. 333-166871 Form 10-K for the Fiscal Year Ended December 31, 2010  Filed March 31, 2010  Definitive Proxy Statement on Schedule 14A Filed April 9, 2010  Form 10-Q for the Fiscal Quarter Ended March 31, 2010
  Filed May 4, 2010
File No. 000-49799 .
 Dear Mr. Johnson:
 We have limited our review of your registra tion statement to those issues we have
addressed in our comments.  In some of our comments, we may ask you to provide us with
information so we may better understand your di sclosure.  Please respond to this letter by
amending your registration statement and prov iding the requested information.  Where you do
not believe our comments apply to  your facts and circumstances or do not believe an amendment
is appropriate, please tell us why in your response.
 We have also reviewed the above Exchange Act filings 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 the comments directed to your
Exchange Act reports within ten business days  by amending your f ilings, by providing the
requested information, or by advising us when you will provide the requested response.  If you do not believe our comments apply to your facts and circumstances or do not believe an amendment is appropriat e, please tell us why in your response.
 After reviewing any amendments to your f ilings and the information you provide in
response to these comments, we may have additional comments

Jonathan E. Johnson, III
Overstock, Inc.  June 11, 2010
Page 2

Registration Statement on Form S-1
 General

1. We note your statement on the cover page that “t his prospectus is part of a Registration
Statement on Form S-1 filed with the SEC to register these shares, regardless of whether
or not you accept the Rescission Offer”  Please provide a complete discussion on how the unregistered securities will become registered.

2. Please describe in an appropriate place in your filing whether there will be any
restrictions on the future transfer  of shares not tendered to you  in this rescission offering.

Effect of the Rescission Offer, page 11

3. Please disclose any risks that a shareholder assumes if he or she fails to accept the
rescission offer.

Questions and Answers About the Rescission Offer, page 3

4. Consider including a brief discussion of the ma terial federal income tax consequences in
this section.
 Q: Why are you making the Rescission Offer?, page 3

5. We note that the rescission offer only c overs 65,465 shares issued through the
Overstock.com Stock Fund between July 1, 2008 and June 30, 2009. However, on page
19 you state that between August 16, 2006 and June 17, 2009 you issued 203,737 more
shares than you registered for i ssuance.  Please revise this se ction and your “Effect of the
Rescission Offer” section to clarify why this rescission offer only covers 65,465 shares
issued between July 1, 2008 and June 30, 2009 instead of the 203,737 shares issued through the Stock Fund from August 16, 2006 to June 17, 2009.

6. Please revise this section to describe any pert inent state rescission offer statutes, with an
explanation of any time periods, and the extent  to which the offer limits or does not limit
the offeree’s right to sue under state law.  We note your risk  factor disclosure on page
nine regarding federal and state la ws regarding rescission offers.
 Q: What interest rate will be used in calculating any amounts owed to me?, page 5

7. Please disclose in this section and in any other appropriate secti on of your registration
statement how you selected the a nnual interest rate of 12%.

Jonathan E. Johnson, III
Overstock, Inc.  June 11, 2010
Page 3

Q: What is the effect of the Rescission Offer on my ability to assert claims?, page 6

8. We note your statement that “[t]he staff of  the SEC takes the position that a person’s
federal right of rescission may survive a rescis sion offer.”  Please revise to state that the
SEC’s staff takes the position that a rescission offer does not alter a person’s remedies under the Securities Act.  This comment also a pplies to the similar disclosure that appears
on pages nine and 11.
 Q: Will the Rescission Offer affect my ability  to direct transactions in my account?

9. Please revise this section and your “Notice of Blackout Period “section located on page
15 to indicate why the blackout pe riod may differ, if at all, between a party that accepts
the offer and one that rejects the offer.
 Risk Factors, page 9

10. Please include a risk factor that explains that security holders who do not accept the
rescission offer may exercise their legal ri ghts under Section 12 throughout the remaining
statutory period, even after the end of the rescission offer or tell us why you do not
believe that this is a material risk.

The Rescission Offer may not bar claims re lating to our issuance of shares…, page 9

11. You state that “[i]f a person accepts the Rescis sion Offer, [you] believe [y]our potential
liability to that person will be eliminated.”  Please revise to disclose the basis for your
belief and if you are referri ng to remedies under state la w, federal law or both.

12. You state that if the Rescission Offer is re jected you may continue to be contingently
liable for rescission or damages.  Please revise to  disclose if you are re ferring to state law,
federal law or both.

The Rescission Offer, page 10
 Background and Reasons for the Rescission Offer, page 10

13. We note your statement on page 11 that “[ i]n late June 2009 we discovered that
investments in the Overstock.com Stock Fund under the Plan exceeded the number of
shares we had registered on Form S-8.”  Please state by how much you exceeded the number of shares you had registered on Form S-8 and when you first exceeded the
amount of shares registered and how you discovered that you exceeded the number of
shares registered.  Also, please explicitly state in this section whether this is a complete
rescission offer or only a partial offering and please discuss the effect, if any, if all of the
shares you are registering are tendered to you or if only some of the shares are tendered to you.

Jonathan E. Johnson, III
Overstock, Inc.  June 11, 2010
Page 4

Effect of the Rescission Offer, page 11

14. Please disclose any risks that a shareholder assumes if he or sh e fails to accept the
rescission offer.

15. We note that you do not address the antifraud provisions of federal securities laws or
rights under state securities laws, common law or  equity.  Please discuss the effect that
acceptance or rejection of the rescission offer will have on shareholders rights under the
anti-fraud provision of the appl icable federal securities laws or under common law or
equity.
 Incorporation of Certain Docu ments by Reference, page 17

16. Please give the Commission file number for each  document you incorporate by reference.
Refer to Rule 411(d) of the Securities Act.
 Item 17. Undertakings, page 23

17. Please provide the undertaking provided under Item 512(a)(6) of Regulation S-K.
 Exhibit 5.1

18. We note that the opinion expands the usual st atement whereby counsel does not admit to
being an expert as defined in Section 7 of  the Securities Act of 1933.  Please have
counsel revise the legal opinion to state that counse l does not admit that they come within
the category of a person whose consent is required under Section 7 of  the Securities Act
of 1933.
 Form 10-K for Fiscal Year Ended December 31, 2009

 Item 7. Management’s Discussion and Anal ysis of Financial Condition…, page 52

 Executive Commentary, page 60

19. Please expand this section, and the corresponding sections in your quarterly reports on Form 10-Q, to discuss know n material trends, demands, commitments, events, or
uncertainties that will have, or are reasona bly likely to have, a material impact on your
financial condition, operating performance, revenues, or income, or result in your
liquidity decreasing or increas ing in any material way.  S ee Item 303 of Regulation S-K
and Release No. 33-8350.  Please address the fo llowing examples, but realize that these
are examples only and not an exhaustive list of the revisions you should make:

• We note your statement that your direct busin ess is contributing a consistently smaller
percentage of your total revenues.  We also note that your fulfillment partner business has consistently contributed more to your total revenue.  Please discuss if you expect the

Jonathan E. Johnson, III
Overstock, Inc.  June 11, 2010
Page 5

revenue generated by your direct business to continue to decrease a nd if you expect that
your fulfillment partner business will continue to contribute more to your total revenue.
Also, please discuss how the focus on your fulfillment partner business has contributed to you posting your first annual profit and discuss any other factor s that you believe lead to
your first annual profit.

• In the first full risk factor on page 21 you state that seasonality of your business places
increased strain on your operations .  In particular, you state that  in the past you have been
required to take significant inventory markdowns or write-o ffs.  Please discuss how past
mark-downs has affected your revenues and profit and what actions you have taken to
mitigate the impact of seasonality  on your operations going forward.

• You also indicate that you are involved in substa ntial litigation, incl uding but not limited
to the prime broker litigation.  Please discu ss how your involvement in these matters has
affected, if at all, management’s ability to focus on the day to day operations of the
business.

Results of Operations, page 61

 Gross Profit, page 62

20. Please discuss the underlying reasons for the ch anges in your Gross Margin, Direct Gross
Profit, and Fulfillment Partner Gross Profit.

21. We note your statement that “[t]he other factors described above did not have a
significant impact on the change in gross profit. ”  Please tell us what “other factors” you
are referring to in this instance.

22. Please briefly discuss why you elected to fo rgive a substantial portion of amounts due
from your fulfillment partners for under billlings that occurred in 2007 and 2008.
 Operating expenses, page 64

23. Please revise to quantify by how much the compensation expense offset some of the
improvement in lower ad vertising costs.
 Liquidity and Capital Resources, page 71

 Borrowings, page 75

24. With respect to your outstanding 3.75% Convertible Senior Notes, please discuss whether you plan to redeem them or what your plans are in light of their maturity date of
December 1, 2011.  Discuss how you intend to fund any redemption or otherwise pay off the remaining amount when they come due.

Jonathan E. Johnson, III
Overstock, Inc.  June 11, 2010
Page 6

Redeemable Common Stock, page 74

25. You state that “[b]ased on the closing pr ice of Overstock common stock of $13.56 at
December 31, 2009, we anticipate that of the $744,000 of affected stock outstanding as of
December 31, 2009, it would be uneconomical for participants to attempt to rescind their acquisitions of more than $163,000 of the stock.  Please discuss in greater detail the basis
for your belief and, in particular, why the December 31, 2009 closing price makes it
uneconomical for the rescission of more th an $163,000 of the stock.  We note similar
disclosure in your Form 10-Q for the fiscal quarter ended March 31, 2010.
 Item 9A. Controls and Procedures, page 80

 (b) Disclosure Controls and Procedures, page 81

26. We note your disclosure that you r disclosure controls and pro cedures have been designed
to ensure that the information required to be disclosed in reports filed or submitted under the Exchange act, are “[r]ecorded, proce ssed, summarized and re ported within the
specified time periods specified by the Commission’s rules and forms.”  In future filings please include the entire definition provide d in Exchange Act Rule 13a-15(e) of
disclosure controls and procedur es or omit the definition in its  entirety.  As such, please
tell us, if true, that your disc losure controls and procedures are designed to ensure that
information required to be disclosed in the reports that you file or submit under the Exchange Act is accumulated and communi cated to your management, including your
chief executive officer and chief financial officer, to allow timely decisions regarding
required disclosure.  See Exch ange Act Rule 13a-15(e).

27. You state that your disclosure controls and procedures were not eff ective as of December
31, 2009 “due to the material weaknesses desc ribed below.”  Please confirm if this
statement is a reference to your description of the weaknesses in your internal controls
over financial reporting.  If this statem ent was not a reference to your disclosure
regarding the weaknesses in your internal controls over financial reporting, please
describe the material weaknesses in your di sclosure controls and procedures as of
December 31, 2009 and the steps you are ta king to correct the weaknesses.
 Notes to Consolidated Financial Statements, page F-8

 Note 2. Accounting Policies, page F-8

 Sales Returns Allowance, page F-16

28. We note your allowance for sales returns has be en consistently decreasing on a quarterly
basis since at least the fourth quarter  of 2008.   Please address the following:

• Please show us your initial estimate of the a llowance for sales returns compared to your
actual sales return experience on a quarterly basis for the past twelve fiscal quarters

Jonathan E. Johnson, III
Overstock, Inc.  June 11, 2010
Page 7

ended March 31, 2010. In your response, please also include a reconciliation of the
amounts reported on Schedule II in your Form 10-K/A for the fiscal year ended December 31, 2007 filed on November 7, 2008 on the net basis to the amounts now reported on the gross basis.

• We note your footnote (2) to Schedule II on pa ge F-55 that for comparative purposes, the
2007 beginning balance has been shown on a gro ss basis.  Please reconcile and explain
why the amounts charged to expense and deductions of $68,933 and $61,536, respectively are different from the restated amounts reported in your Form 10-K/A for the
year ended December 31, 2007 of $55,553 and $54,140.

• Your allowance for sales retu rns has decreased from approxi mately 5.4% of revenues as
of the end of September 30, 2009 to approximately 3.7% of revenues for the quarter ended December 31, 2009.  Please e xplain the decrease in the sales allowance given your
approximate 66% increase in sequential fourth quarter 2009 revenue growth.  Similarly,
we note as a percentage of revenue your al lowance for sales returns has decreased from
approximately 5.7% of revenues as of the end of March 31, 2009 to approximately 2.8% of revenue for the quarter ended March 31, 2010.  Please explain and disclose the decrease in the sales allowance given your approximate 42% increas e in year-over-year
comparable quarterly revenue growth.

• Please explain to us how you recorded the decrease in sales retu rns from December 31,
2009 to March 31, 2010.  In this regard, please ex plain to us how the credit side of the
entry was recorded.

• Refer to page 26 to your March 31, 2010 Form 10-Q.  We read your statement, “[t]he
allowance for returns was $7.4 million and $11.9 million at March 31, 2010 and December 31, 2009, respectively. The decrease in  the sales returns reserve at March 31,
2010 compared to December 31, 2009 is primarily due to decreased revenues due to seasonality.”  In this regard, your allowance for sales returns, as a percentage of revenues, has been decreasing consistently for the past si x quarters.  Please tell u