Friday, January 04, 2008

The Overstock Acid Rain Shower Continues

Why is that man smiling (as if we didn't know)?

The corporate train wreck special pulled into the station yesterday, and off-loaded its usual cargo of shareholder misery. With its president Jason Lindsey having absconded, Overstock shares declined a stunning 12.4% in one day.

Forensic accountant Tracy Coenen observes:
Sell, and sell fast. We’ve been telling you all along that this is a sinking ship. The departure of Jason Lindsey, co-founder, president, COO, and member of the board of directors is a bad sign. They say he’s sticking around part-time, but that doesn’t hold water in light of his resignation from the board. How much more “part-time” can you be than to be on the board?
In his New York Times blog, chief markets writer Floyd Norris points to the contradiction between Overstock CEO Patrick Byrne's "I screwed up" comments and his statements in 2005 "that he had no doubt that the only reason the stock went down was those horrible naked short sellers."

Floyd continues: "Does this mean Mr. Byrne would now absolve the naked shorts, since another cause of the decline has been found? I don’t think so. It was just a few days ago that Overstock’s latest denunciation of them was published."

I'm still trying to figure out why the SEC, which is investigating Byrne and Overstock, has yet to take action.

Here we have public statements that are so demonstrably false that they are contradicted by Byrne himself. These statements misled significant numbers of shareholders of this thinly traded company, and a perusal of stock message boards will show that a sizable number of Overstock holders continue to swallow Byrne's lame excuses and lies.

What is the SEC waiting for?

© 2007 Gary Weiss. All rights reserved.

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Wall Street Versus America was published by Penguin USA on April 6.
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