SecProbe.io

CORRESP
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filename1.htm

[Letterhead
of Overstock.com, Inc.]

July 9,
2010

H. Christopher Owings

Assistant Director

United States Securities and
Exchange Commission

Division of Corporation
Finance

Mail Stop 3561

100 F Street, NE

Washington, D.C. 20549

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, 2009

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. Owings:

Set forth below are the
responses of Overstock.com, Inc. (the “Company,” “we” “us” or “our”), to comments received from the
staff of the Division of Corporation Finance (the “Staff”) of the Securities
and Exchange Commission (the “Commission”) by letter dated June 11, 2010, with
respect to the Company’s Form S-1 initially filed with the Commission on May 14,
2010, File No. 333-166871 (the “Registration Statement”).

Concurrently with the submission
of this letter, we are filing through EDGAR Amendment No. 1 to the
Registration Statement (“Amendment
No. 1”).  For your
convenience, we are also sending you by Federal Express a copy of Amendment No. 1
marked to show all changes to the Registration Statement.

For your convenience, each
response is prefaced by the exact text of the Staff’s corresponding comment in
bold, italicized text.  Also for each
response relating to the Registration Statement, all references to page numbers
and captions correspond to Amendment No. 1 unless otherwise specified.

1

Registration Statement on Form S-1

General

1.                                      We note your statement on the cover pages that “this
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.

In response to the Staff’s
comment, we advise you that although we are not aware of any definitive
authority governing this matter, we believe that our approach is consistent
with the approach taken by numerous other issuers in similar circumstances in
filings with the Commission.  Following
are examples of the same approach taken by other issuers:

Chevron:  “This prospectus is part of
a Registration Statement on Form S-3 filed with the SEC to register these
shares, regardless of whether or not you accept the Rescission Offer.”  (Amendment No. 2 to Form S-3 filed December 15,
2009; Registration No. 333-162682)

Dell:  “This 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.”
(Amendment No. 2 to Form S-1 filed on August 8, 2008; Registration
No. 333-151463)

Costco:  “The shares of Costco
Wholesale common stock which are the subject of this Rescission Offer have now
been registered under the Securities Act of 1933 by virtue of the registration
statement of which this prospectus is a part.”
(Prospectus filed on August 29,
2005 pursuant to Rule 424(b)(3); Registration No. 333-125637)

Ryder
System Inc.:  “These
shares have now been registered by means of a Registration Statement on Form S-3
of which this prospectus forms a part. Accordingly, whether or not you accept
the Rescission Offer, shares of our common stock subject to the Rescission
Offer will be properly registered under the Securities Act, effective as of the
date of this prospectus.”  (Form S-3
filed June 1, 2006; Registration No. 333-134627)

FlowServe Corp.:  “If you fail to accept the
Rescission Offer, your 401(k) account will retain ownership of the Units
in accordance with the terms of the 401(k) Plan, and it will not be credited
with any payment amount for those securities in connection with the Rescission
Offer.  The shares underlying the Units
will be registered and fully tradeable under the Securities Act of 1933, unless
you are an affiliate of Flowserve within the meaning of Rule 144 or
Rule 145, as the case may be.”
(Prospectus filed on December 6,
2006 pursuant to Rule 424(b)(3); Registration No. 333-138587)

Applica:  “The shares of our common
stock included in the Units and subject to the Rescission Offer may not have been
registered under the Securities Act of 1933, as amended, which we refer to as
the Securities Act, in a timely manner. These shares have now been registered
by means of the Registration Statement on Form S-3 of which this

prospectus forms a part. Accordingly,
whether or not you accept this Rescission Offer, shares of our common stock
that you may own are now properly registered under the Securities Act effective
as of the date of this prospectus.”  (Prospectus filed on September 22, 2006 pursuant to Rule 424(b)(3);
Registration No. 333- 136754)

Based on the precedents
filed with the Commission, we believe that this approach is reasonable and
appropriate. Analytically, we believe that the Staff’s position is that a
rescission offer is deemed to constitute a new offer to sell the security that
is the subject of the rescission offer, and consequently the new offer can and,
absent an applicable exemption, is required to be registered. With your
concurrence, we will include the following additional disclosure on the cover page of
the prospectus:

“The Staff of the SEC takes
the position that an offer to rescind a sale of securities constitutes a new
offer to sell the securities. Consequently, absent an applicable exemption, the
new offer is subject to the registration provisions of the Securities Act.”

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.

In response to the Staff’s comment,
we advise you that we do not believe that there will be any restrictions on the
future transfer of shares not tendered to us in the Rescission Offer, other
than customary blackout periods imposed by the Company.  We believe that this is consistent with the
Staff’s approach set forth in Question 529.03 of the Staff’s Compliance and
Disclosure Interpretations regarding the Securities Act rules.  Question 529.03 provides:

529.03 Securities were inadvertently sold to a
company’s employees under a “stale” Form S-8 registration statement. For
purposes of resale by the purchasing employees, the securities would be treated
as if they were unrestricted so as not to penalize innocent purchasers under
the “stale” Form S-8. [Jan. 26, 2009]

In further response to the
Staff’s comment, we have included the following disclosure on page 6:

Q:           Will there be any restrictions on the future transfer of
my shares if I do not accept the Rescission Offer?

A:            The shares of common stock which are the subject of this
Rescission Offer have now been registered under the Securities Act of 1933 by
virtue of the registration statement of which this prospectus is a part. We
believe that these shares are transferable by plan participants in the ordinary
course, subject to restrictions on trading that may be applicable from time to
time (as in the case of the Company’s customary “blackout” periods).

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.

In response to the Staff’s
comment we have included the requested disclosure on page 14, as the last
paragraph under “Effect of the Rescission Offer”.

Questions and Answers About the Rescission Offer, page 3

4.                                      Consider including a brief discussion of the material
federal income tax consequences in this section.

In response to the Staff’s
comment we have included the requested disclosure beginning on page 7
under a new question titled: “What are the tax consequences if I accept the
Rescission Offer?”.

Q: Why are you making the Rescission Offer?, page 3

5.                                      We note that the rescission offer only covers 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 issuance.  Please revise this section and your “Effect
of the Rescission Offer” section to clarify why this rescission offer only
covers 65,456 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.

In response to the Staff’s
comment we have included the requested disclosure on page 3 as part of the
response to the first question, with similar additional disclosure on page 13
under the subheading “Background and Reasons for the Rescission Offer”.

6.                                      Please revise this section to describe any pertinent
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 laws regarding rescission offers.

In response to the Staff’s
comment we have included the requested disclosure beginning on page 3 as
part of the response to the first question, with similar additional disclosure
on page 11 under the caption “The Rescission Offer may terminate any right
you may have to rescind your acquisition of Shares under state law”.

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 section of your registration statement how you selected the annual
interest rate of 12%.

In response to the Staff’s
comment we have included the requested disclosure on page 5 as part of the
answer to the question “What interest rate will be used in calculating any

amounts owed to me?” and on page 14
in the first paragraph under “Terms of the Rescission Offer”.

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
rescission 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 applies to the similar
disclosure that appears on pages nine and 11.

In response to the Staff’s
comment we have revised the disclosures as requested on page 6 as part of
the answer to the question “What is the effect of the Rescission Offer on my
ability to assert claims?”, on page 10 in the first paragraph under the
risk factor “Your right of rescission, if any, under federal and state law may
not survive if you affirmatively reject or fail to accept the Rescission Offer”
and page 13 in the second paragraph under “Effect of the Rescission Offer”.

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 period may
differ, if at all, between a party that accepts the offer and one that rejects
the offer.

In response to the Staff’s
comment we have included the requested disclosure on page 6 under the new
question “Will the blackout period be longer if I accept the Rescission Offer?”
and beginning on page 17 under “Notice of Blackout Period”.

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 rights 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.

In response to the Staff’s
comment we have included the requested disclosure on page 11 under the new
risk factor “Holders who do not accept the Rescission Offer may exercise their
legal rights even after the end of the Rescission offer”.

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

11.                               You state that “[i]f a person accepts the Rescission
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 referring to remedies under state law,
federal law or both.

In response to the Staff’s
comment, we have revised the sentence on page 10 “If a person accepts the
Rescission Offer, we believe our potential liability to that person will be
eliminated” to read as follows:

“If
a person accepts the Rescission Offer, but subsequently asserts a claim against
us for an additional remedy, we would expect to assert that the person’s
acceptance of the Rescission Offer eliminated any liability we might have had
to that person under section 12 of the Securities Act.  We do not believe that the original issuance
of the Shares violated the registration requirements of any state securities
laws.”

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

In response to the Staff’s
comment, we have revised the sentence you reference on page 10 to disclose
that we are referring to federal law.

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 registered on Form S-8 and when you first exceeded
that 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.

In response to the Staff’s
comment, we have included the requested disclosures on pages 12 and 13
under “Background and Reasons for the Rescission Offer”.

Effect of the Rescission Offer, page 11

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

In response to the Staff’s
comment, we have included the requested disclosure on page 14 as the last
paragraph under “Effect of the Rescission Offer”.

15.                               We note that you do not address the anti-fraud
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 applicable federal
securities laws or under common law or equity.

In response to the Staff’s
comment, we have included the requested disclosure on page 13 in the third
paragraph under “Effect of the Rescission Offer”.

Incorporation of Certain Documents 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.

In response to the Staff’