Monday, June 04, 2007

Overstock.com to Regulation FD: Drop Dead

(Updated 6/6/07 with quote from Patrick Byrne on Reg. FD)

Something new and wondrous always seems to emerge over the weekends in the always fascinating Overstock.com slo-mo train wreck. So it was this weekend.

Seems that "Omuse," the worthless Wikipedia wanna-be that was created to provide a cover story for its nauseating stalker in residence, newly re-titled Director of Communications Judd Bagley, is finally emerging from months of "beta testing" and will be officially inaugurated within the next two weeks.

How did I become aware of this material nonpublic information?

Simple, my dear Watson. It was officially announced not in a press release or some other legitimate vehicle of corporate disclosure, but was the subject of an anonymous posting by the hard-working Director of Communications in Wikipedia Review, a limited-readership message board dedicated to attacking Wikipedia. Word then crept out to the Investor Village message board.

Here's the Wikipedia Review post. Scroll down for the entry at 10:31 p.m. June 3.

This unsigned post is signed only "WordBomb," which is one of the anonymous handles that Bagley uses when vandalizing Wikipedia and threatening Wikipedia administrators. See this earlier post and others tagged "Wikipedia," and the thorough dissection of Bagley's activities on Wikipedia on O-Smear.



Posting this significant information on Wikipedia Review is revolting even by Bagley standards because it flies in the face of the rules against selective disclosure of material nonpublic information in Regulation FD.

As Seth Jayson of the Motley Fool points out, Overstock CEO Patrick Byrne himself acknowledged the Reg. FD hazards of posting on message boards in a Motley Fool post in October 2005:

1) You can safely assume that every security lawyer I know is wringing his hands and saying, "Holy Toledo, Byrne, you cannot engage with people on a public message board. It'll be Exhibit A in a lawsuit against you!" But as a smart fellow once told me, lawyers say that about everything.

2) That said, there is a Reg FD issue with me being here. That is, if I disclose things that are material, then because this is not open to the whole public, the SEC would come kick my butt. And they would be right to do so. [emphasis added]
I think it's fairly clear that the official inauguration of Omuse is material information, given the fact that Omuse is one of the five tabs that can be seen from the Overstock.com main page, right up there with Cars, Auctions, Travel and Shopping. (The fact that Omuse is a joke that can't possibly add a nickel of revenues is beside the point.)

It also seems particularly malodorous because Wikipedia Review is dedicated to undermining Wikipedia, against which Omuse is laughably claiming to compete. Indeed, Wikipedia Review hates Wikipedia so much that it doesn't mind, apparently, that Bagley posted spyware-infested messages to grab IP addresses from Wikipedia Review readers.

But hey, they don't call him Sleazey McSleaze for nothing.

Omuse has been widely ridiculed as a flop from the outset. It has been such an abysmal failure that Bagley has taken to spamming Usenet newsgroups to push Omuse -- and, when not ignored, getting a hostile reaction. See this link and this one. Kudos to Seth Jayson at the Motley Fool for first noticing (subscription required).

In contrast to the hype surrounding its launch, it has aroused almost zero interest, as can be seen by examining a list of new pages, and the fact that most pages (such as this one) are advertising spams by Overstock vendors. A link to recent changes, which highlighted the lack of activity on Omuse, was deleted by Bagley in February.

Gee, I don't see why it is such a failure. Wouldn't you be thrilled to give your credit card information to Judd Bagley for the privilege of adding content to someone else's website?

As I pointed out previously, Overstock.com had previously given the finger to Regulation FD by announcing this hot new Wikipedia wanna-be on the Investor Village message board.

When you've finished gagging over this sliminess -- and if your appetite for Overstock.com sleaze is unsated -- be sure to read two illuminating posts in Sam Antar's blog (here and here).

The first focuses on Patrick Byrne's lying in a message board post that he never hired a public investigator (turns out he did, for $50,000, though it turned out to be a crooked P.I.).

The second hones in on a crude death threat against me by a piece of muck posting on Bagley's antisocialmedia.net corporate smear site. The post is signed "alpineanalytics" and I'm persuaded that is this indeed from someone affiliated with New York entities named "Alpine Analytics" (not to be confused with the Colorado-based management training firm at this website).

This same moron has pumped Overstock on message boards, and purports to manage money for "clients." Makes me wonder: would you give your money to people who post a death threat on a website, and are dumb enough to sign it?

UPDATE: A faithful reader brings to my attention that Overstock.com no longer posts links to the nutty "Sanitycheck" stock market conspiracy theory website, run by a former used medical equipment salesman named Phil Saunders ("Bob O'Brien"). A link to "sanitycheck" used to be found on every Overstock product page. A diligent search found a grand total of one link, as compared to thousands previously.

Removal of the links won't do sanitycheck's dwindling readership any good. Like all nutso sites, it initially benefited from a kind of ghoulish curiosity, but has dwindled over the past year, according to Alexa.

Below is what every product page on the Overstock site used contain until recently:



The "market reform" link took one to a site devoted not to market reform, but to loony conspiracy theories and personal attacks on critics of Byrne -- a function now replaced by Bagley and Overstock.com's in-house smear site, antisocialmedia.

It's interesting to speculate why the links were removed. It's even more interesting to speculate how the nature of the support sanitycheck received from Overstock and Byrne. This is something the SEC needs to explore in its investigation of the company and its CEO.

© 2007 Gary Weiss. All rights reserved.

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

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