Friday, February 16, 2007

A Cover-Up at the Cover Story

The other day I described's laughable "Omuse" user-edited wiki, which was designed to provide a cover story for Patrick Byrne's resident stalker Judd Bagley. Its purpose is to give Bagley a no-show job to cover his real job of running's smear site.

I provided a link that showed that Omuse had been a miserable failure: No edits for days at a time. Well, guess what, folks? The link (it used to be has been taken down. As the old saying goes, "Stuff a cold, feed a fever, cover-up a failure."

And I do mean failure. The Internet sleuth "Scipio" who brought this to my attention pointed out that as of last night, just before "recent changes" was taken down, there were a grand total of two non-management edits over the past week.

Guess he wasn't the only one to notice.

For comparison purposes, here's what you would see in the "recent changes" link of a non-sham wiki, this one called Wikihow. Incidentally, Wikihow seems alarmingly similar to Omuse (with its "how-to" orientation) wouldn't you say? Except that Wikihow has folks actually editing it, and wasn't created as a make-work excuse for the CEO's crony.

Now, I wonder how Byrne and Bagley will react to this item. Will they proclaim that a "technical glitch" occurred and reinstate the "recent changes" feature? Doing that, of course, would bring back a feature that showed in real time what a failure Omuse has been.

Quite a dilemma for the crackerjack Overstock management team.

Barry Ritholz wonders aloud in his blog today:

Now, with the SEC dropping their investigation of the "Sith Lords," and the company again issuing disappointing sales and earnings, I have one simple question: Who owns this stock, and why?

Overstock shareholders must be 1st rate fools happy to own a 2nd rate internet retailer managed by a 3rd rate CEO whose 4th quarter numbers were awful (400-bps gross margin miss and a 100% negative variance on EPS?), and for the 5th consecutive Q missed the prior sunny forecasts we can expect to be missed for a 6th time in May.

Enough already!

There are 9,000 publicly traded companies out there; Why does anyone even bother with this POS?

Mr. Ritholtz's point is well taken. I can't explain the mentality of people who own bad stocks run by bad people. But I do know this: as a journalist, watching a miserable company thrash itself to death is a fascinating thing to behold.

UPDATE: With the exception of a few of mild posts on message boards, Byrne and Bagley were uncharacteristically quiet over the President's Day Weekend. This is a shame from the standpoint of regulators, class action lawyers and other Overstock watchers, because every time they open their big mouths they dig the hole even deeper.

For instance, Internet sleuth "Scipio" has found this blog post from Aug. 24 which contradicts Byrne's claim that Bagley started work "at the very end of August." It was actually sometime before Aug. 24.

I'm sure that SEC investigators are having a field day combing through these guys' public statements, which are rife with forward-looking stock-hyping and jaw-dropping contradictions. So all I can say is, keep talking, fellas!

Scipio has a timeline that will, I'm sure, be of great value to our erstwhile watchdogs.

© 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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