Thursday, February 08, 2007

Bagley's Cover Story Falls Apart's CEO Patrick Byrne has had a serious problem since it was revealed that he had put on the payroll a full-time resident stalker, Judd Bagley, to smear his critics and divert attention from the lousy job he has been doing as CEO. Byrne needed a cover story, the more convincing the better.

That cover story -- the "secret project" that supposedly has been preoccupying Bagley since August -- has just been announced. And it is such a joke, such an obvious smokescreen, that it eliminates any doubt that Bagley was hired as "director of social media" strictly for the purpose of running Overstock's smear site. was created to intimidate and harass Overstock's critics, in a desperate effort to divert attention from the company's horror-show finances and failing share price. As Joe Nocera pointed out in the New York Times almost a year ago, in his article "Overstock's Campaign of Menace," Byrne has made it very clear that there is a "price to be paid" for criticizing this crummy company and its creepy CEO. Bagley is the chief enforcer of that strategy of intimidation.

Bagley has supposedly been toiling for half a year on something called "Omuse." It's supposed to be a user-edited "wiki" portion of Overstock, presumably for people who can't find their way to the real Wikipedia. Byrne thinks so little of it that he "announced" it on the limited-readership Investor Village message board and on an Overstock auctions forum -- in yet another nose-thumbing at Regulation FD.

Omuse also is a weak nose-thumbing at the real Wikipedia, where Bagley was kicked off after pushing Byrne's vendettas via phony IDs that harassed and stalked Wiki administrators. (Here's one of two official Wikipedia lists of Bagley's phony IDs.) Bagley is not ashamed of making an ass of himself on Wikipedia, and has bragged about it several times.

Note (before it is deleted) the amazed initial reaction to Omuse from a hapless Overstock merchant:

Will you please explain what all this has to do with AUCTIONS........I, as most sellers, came over to Overstock to sell our wares at auction........instead of valuable time being spent to get the up-grades, or to get working things done that should have been done before the auctions were started, along comes another program that has nothing to help the AUCTION looks like another grasping for straws.....
The answer, of course, is that Omuse doesn't even pretend to have any value for Overstock. Its sole purpose is to provide a fig leaf for Bagley's actual responsibility at Overstock, which is the maintenance of Overstock's smear site and similar "strategic messaging" responsibilities for Byrne. (Such as flaunting Reg. FD by putting a spin on Byrne's recent wack-a-doo lawsuit, or flushing any semblance of corporate ethics down the drain by planting spyware to stalk Overstock critics on message boards.)

Take a look at this crudely executed wiki
and ask yourself: Does Byrne seriously expect anyone to believe that it took six months to develop this garbage? By all appearances (see this astute analysis) it seems to have been slapped together by a techie in the last few weeks, using freeware that anyone can download off the Internet. Since Bagley is not a web designer, and since it has no "content" to speak of, it obviously didn't take up much of his time.

Of course. His job is, his cyberstalking-and-libel site, designed to carry out the mission Joe Nocera described a year ago. Compare the crude Omuse with the slick, well-designed, content-filled "antisocialmedia"smear site and Bagley's real job becomes apparent.

Meanwhile, Bagley has continued in his real job of lying about his boss's critics, with a post that -- in classic Bagley fashion -- projects onto others his own sliminess. Since he is a paid shill for Byrne, and was obviously hired as payback for running blogs ridiculing Byrne's critics, he feels that everyone is as corrupt as he is. The "paid basher" line is, of course, a classic Byrne intimidation technique as well -- one of the things that has made even Jim Cramer reluctant to criticize Overstock, as he recently pointed out.

This time Bagley is claiming that I have "consulted" for the DTCC (Depository Trust Clearing Corp.), a major whipping boy of Byrne and other anti-naked-shorting nuts. Byrne's "investigative reporter" made no effort to contact me about this absolute crap, and a flat-out denial by DTCC's general counsel was, of course, disregarded. (He said "no" and Bagley responded, "what dat mean?")

Bagley didn't even pretend to have contacted me, not that previous denials and refutations of his lies have prevented him from publishing his smears.

Now, on this consulting thing: I hope I am not misunderstood by my friends in the regulatory community and in law enforcement. If you want to talk with me, or "consult" with me shall say, on the subject of or Patrick Byrne or Judd Bagley or the anti-naked-shorting nuts -- I am at your disposal. In May I gave a presentation, free of charge, to regulatory attorneys of the New York Stock Exchange on that subject, as I pointed out in a post at the time.

So let's go, guys! You have my number. Give me a call.

UPDATE: Omuse has gotten off to a fast start. There were a grand total of zero user edits during the weekend following its announcement. Even if Omuse wasn't created to provide a nonprofit smokscreen for Bagley, it would be a pretty good example of the inept management of this company. As Herb Greenberg pointed out today, at any company with a non-captive board of directors, a CEO with a proven record of failure like Patrick Byrne would have been fired a long time ago.

(The link under "zero user edits" went to Omuse's "recent edits" link. That feature is now gone.)

© 2007 Gary Weiss. All rights reserved.


Wall Street Versus America was published by Penguin USA on April 6.
Click here for its listing and here for more information on the book, from my web site.

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