Monday, May 12, 2008

More on the Con Game

White collar fraud-fighter Sam Antar has a lengthy and prodigiously detailed post today on CEO Patrick Byrne's latest effort to pump his failing company's stock.

Byrne told Reuters in a story that moved late Thursday that
. . . he expected Overstock to lose 2 cents per dollar in sales in the first three quarters of 2008, but hoped to make it up in the fourth quarter to realize a profit for the year, and then continue profitably in 2009. "It is very realistic. I think we can," he added.
The stock climbed 2.6% on Friday, probably as a result of this shameless pumping.

As Sam describes, such an outcome is unlikely to say the least. Indeed, from reading Sam's detailed analysis , it seems to me that Byrne conjured up these numbers out of thin air. CEOs can't just decide that an earnings number sounds good and call up Reuters. They can't throw around numbers and projections that have no basis in reality.

Which means that if he doesn't get the profit that he projects, saying "my bad" and slinging more mud at critics won't do. The SEC-investigated clown prince of corporate miscreants will be in even more hot water than he is in now.

© 2008 Gary Weiss. All rights reserved.

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