Overstock Cancels Stock Sale

A deal to raise $17 million is called off.
Publish date:

Overstock.com (OSTK) - Get Report said it abandoned a plan to raise $17 million by selling common stock.

The Salt Lake City-based online closeout retailer had agreed Monday to issue 700,000 shares at $24 apiece. The company said Monday that "several parties have approached us regarding putting additional capital into the business, and we decided that it would be prudent to take it."

But Overstock said in a press release issued after the market closed Wednesday that it had since offered to terminate that agreement. The purchaser accepted the termination offer, Overstock said. Overstock didn't identify the would-be buyer or say why the company offered to terminate the agreement.

The news comes just a day after the company said it

received a subpoena from the

Securities and Exchange Commission

related to a "broad range" of documents, including those related to the company's short-selling allegations.

Last year, Overstock filed a lawsuit alleging a wide-ranging conspiracy to manipulate the share price of the Internet retailer. Overstock alleges that research firm Gradient Analytics was in cahoots with short-sellers including Rocker Partners, which owns a small stake in



, publisher of this Web site. Both Rocker and Gradient have denied wrongdoing.

TheStreet.com and James J. Cramer, its co-founder and major shareholder, were subpoenaed in February in connection with an SEC investigation of Gradient following Overstock's allegations. The SEC has agreed that it will not, at this time, seek to enforce the portions of the subpoenas issued to the company and other media firms, including

Dow Jones


, that concern communications between journalists and their sources.

Late Wednesday, Overstock slipped 20 cents to $24.55.