Patrick Byrne's Staggering History of Lies
Reformed felon Sam Antar has a devastating blog post this morning, the first of a series chronicling Overstock.com CEO Patrick Byrne's multiyear history of lies. It's a must-read for corporate crime aficionados.
The first part can be found here. This is the beginning of what I am sure will be a useful roadmap for the SEC, which is investigating Byrne.
My cousin, Crazy Eddie Antar used to say that, "people live on hope." Like Eddie, Patrick Byrne's hyping seems to reflect the behavior of a penny stock promoter, since his comments often have no bearing in reality. Overstock.com constantly misses targets set by Byrne. Patrick Byrne's statements are often inconsistent with each other and in many cases contradict other facts on hand. In most cases Patrick Byrne's contradictions cannot be reconciled with other disclosures by him and Overstock.com. His different versions of events cannot coexist, leading me to question whether is simply promoting hope without regard for reality.To be sure, it takes one to know one.
Sam's analysis of Byrne's lies goes back to 2001, which might strike most laypeople as being ancient history. Not from a regulatory standpoint, Sam points out:
Many people may think that prior acts dating back seven years from today are beyond the statute of limitations for possible charges of underlying securities law violations. However, from my own experience in the Crazy Eddie fraud, such prior acts are still clearly relevant, since the SEC is not bound by any statute of limitations on acts relating to underlying violations of securities law. Patrick Byrne has recently admitted to being the target of a Securities and Exchange Commission investigation of possible wrongdoing in contrast to his previous denials. Any information about his deceptions is clearly relevant to its investigation.It's a remarkable, well-researched piece of work that should be carefully examined by corporate crime watchers.
Speaking of serial deceptions, one of Byrne's many lies -- his constant whining about naked short selling -- has recently been shredded by the market. In recent months this perennially money-losing, SEC-investigated, critic-stalking company has confounded the laws of gravity and common sense by seeing its share price climb over $33, more than doubling in the span of a few months.
Overstock has a small float and a large short interest, so this is obviously a classic short squeeze.
If Overstock were really a subject of naked short-selling, that would be impossible. Shorts would just continue to hammer the stock. Remember that stocks that are naked-shorted are not borrowed, and thus are not subject to short squeezes, as is evidently taking place here.
In a short squeeze you force the short to replace the stock that he has borrowed. No borrowing, no squeeze.
© 2007 Gary Weiss. All rights reserved.
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