Overstock.com's No. 1 Risk Factor: Patrick Byrne
A duly disclosed risk factor: telegenic CEO Patrick Byrne
One of the remarkable things about Corporate America's one-man lunatic fringe, Overstock.com CEO Patrick Byrne, is how this company's deaf-dumb-and-blind board of directors allows Byrne to make a fool of himself practically every day by shirking his job and spewing his stock market conspiracy theories. Pretty much everyone knows how much damage it has done to the company's reputation and credibility.
Michelle Leder, who writes the respected Footnoted.org website, points out today that Overstock.com actually disclosed that very danger -- that Byrne's nutty spewing can hurt the company -- in the 16-page "risk factors" disclosure in its latest 10-Q.
This rather obvious risk is, of course, clouded in the usual corporate-speak:
Additionally, Dr. Patrick Byrne and the company have fostered and supported a national debate concerning illegal trading practices called “naked short selling” and have advocated regulatory changes and enforcement action designed to end these practices. The profile of the company and Dr. Byrne, and their positions on issues associated with the debate, may make the company and Dr. Byrne the target of criticism and derision in the financial markets and associated media, and this may prove to have an adverse effect on the company’s stock price.Translation: Patrick Byrne is screwing his shareholders by neglecting his duties and ranting and raving about stock market conspiracy theories.
What's interesting is that the board of directors, rather than disclosing this rather obvious fact, doesn't kick him out on his keister--which is what any corporate board would do that did not make a mockery of corporate governance. So instead we have the daily spectacle of an out-of-control CEO living on message boards, editing Wikipedia day and night, while his hand-picked board snores in the distance.
Even his father, former GEICO CEO John J. Byrne, realizes that sonny boy is a liability. He told the AP the other day that " I would rather him spend his time on getting things right with the company, not on that jihad."
Byrne made much the same comments when he was chairman of Overstock -- and then, rather than live up to his responsibilities as chairman, he cravenly quit rather than push the issue. The younger Byrne responded by implying publicly that his father might be getting a bit senile. What a dear man he is.
So Byrne has raved on, truly the gift that keeps on giving. Still, things like this makes you wonder: wouldn't the world be a better, more honest, less slimy place if John Byrne cut off junior's allowance?
© 2008 Gary Weiss. All rights reserved.