UPDATE 1-Overstock.com says co-founder Lindsey resigns

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LOS ANGELES, Jan 2 (Reuters) - Overstock.com Inc (OSTK.O) said on Wednesday that co-founder Jason Lindsey resigned his positions as chief operating officer, president and board member of the online retailer, effective Dec. 31, 2007.

Lindsey, who came out of retirement in April 2006 to help rebuild the company, will oversee special projects at Overstock on a part-time basis, the company said in a statement. Lindsey also said he would spend time on "outside ventures."

He is the third board member to resign from Overstock in 2007.

Overstock, based in Salt Like City, buys close-out merchandise in bulk to sell over the Internet, competing with other online retailers such as Amazon.com, as well as brick-and-mortar chains.

Overstock, founded in 1999, has a history of quarterly losses.

The company last posted a quarterly net profit in the fourth quarter of 2004. But in October, Overstock said it expected to turn a profit in its fiscal 2007 fourth quarter and in 2008.

Analysts have noted developments at the business, such as improved gross profit margins and lower spending, but have questioned whether they can be sustained.

Shares of Overstock closed down 43 cents, or 2.77 percent, at $15.10. They are down 61 percent since a two-year high of $39.13 in October 2007. (Reporting by Alexandria Sage in Los Angeles; Additional reporting by Amulya Nagaraj in Bangalore)