Overstock.com CEO Patrick Byrne Posts on Internet During Conference Call

I've marveled in the past (see this post and others) about Overstock.com CEO Patrick Byrne's self-destructive Internet addiction -- how he has dragged his wretched company through the mud via skeevy, sometimes foul-mouthed posts in which he rarely identifies himself as CEO (shades of Whole Foods CEO John Mackey).

I only found out today how really bad off he is,Internet-addiction-wise.

I was dozing through the Overstock.com quarterly conference call this morning, numbed by the always-dubious financial gobbledygook and Sith Lord Chewbacca. After all, there's really no way of distinguishing facts from exaggerations and hocus-pocus until afterwards, when his version of reality is dissected by accounting-fraud-watchers like Sam Antar and Tracy Coenen.

So I wandered over to the Investor Village message board. I saw this:



Note the time: 11:43 a.m., eastern time. The conference call, which began at 11 a.m., was still underway when he posted that "attaboy" response to loyal corporate shill Evren Karpak. It didn't end until 12:15.

Yep, like me, Byrne was obviously bored to tears listening to tiresome stuff like whether or not his cruddy company is ever going to make a buck, so he went over to the Overstock message board at Investor Village. Just as I did, except that he's the CEO of the company, supposedly focusing on the questions being directed at him.

"Hannibal" is his anonymous user ID. Since he did not sign the post, as usual, most people looking at that post would have no idea that the CEO of the company was posting on the Internet during the company's quarterly conference call. Which is why Byrne's defiance of Regulation FD is not a very good idea.

Ironically, in that same conference call Byrne whined about all the criticism of his Internet posts, and claimed again, falsely as usual, that he doesn't post online under pseudonyms, a la Mackey. This right in the middle of proving that what he was saying was a flat-out lie.


Amazing? Not by Patrick Byrne standards. Over the weekend he made a fool of himself on the Slashdot website, weighing in on a discussion about whether Wikipedia (with which Overstock is competing via "Omuse") is "infiltrated by foreign agents."

I'm not making this up. Read his contribution to the loony discussion here. His director of communications and in-house stalker, the nauseating Judd Bagley, was doing the same thing -- via pseudonyms "WordBomb" and "writerjudd" -- on Slashdot and the Wikipedia Review anti-Wikipedia site. On neither site did Bagley identify himself as an official of Overstock.com.

One might think it odd -- and legally questionable -- that two officials of a company seeking to compete with Wikipedia, through their laughable "Omuse" wiki, would try to undermine Wikipedia. The media, however, has become a bit numbed to Byrne's disgraceful conduct and has largley given him a pass. Regulators, though investigating Byrne and Overstock.com, have so far taken no action.

I wonder if this head-in-the-sand attitude is justified for a company that makes a mockery of corporate ethics.

UPDATE: Tracy Coenen translates the conference call from Byrne-speak into English.

© 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.

Investors Seek Mackey Ouster; Whither Byrne?

The New York Post reports today that a large investor in Whole Foods shares is recommending that CEO John Mackey be ousted for his anonymous Yahoo posts.

"Regardless of whether Mr. Mackey is ultimately found to have violated the law or the company's code of conduct," the group wrote, "his poor judgment has already damaged his credibility, jeopardized the proposed Wild Oats' acquisition and triggered a Securities and Exchange Commission investigation."

You could substitute "Patrick Byrne" for "Mackey" and "Overstock.com" for "Whole Foods" in the above, and it would describe precisely the same situation. As I've described, Byrne has defiantly posted under the pseudonym "Hannibal," and only recently started using his real name after the Whole Foods mess broke.

He and his house stalker Judd Bagley have committed far worse breaches of the most basic principles of corporate ethics.

Yet Byrne is getting a pass from his lapdog board and the SEC, which is conducting a slo-mo investigation of both him and his train wreck of a company.
© 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.

Overstock.com CEO Patrick Byrne Admits He Posted Under Pseudonyms

Seems that Overstock.com CEO Patrick Byrne is now admitting that he "pulled a Mackey" after all.

In a post on the Overstock.com website late last night, Byrne admits that he posted on the Internet under anonymous pseudonyms -- the same grave offense that has snared Whole Foods CEO John Mackey, prompting an SEC probe, internal investigation and an apology by Mackey.

The Times article had quoted Byrne as saying that he always signed his name to his copious Internet message board posts. But as I noted in a previous blog item, that's a blatant lie. Byrne until recently always used a pseudonym, and almost never signed his full name or disclosed his corporate affiliation and massive share ownership when posting on Internet message boards. His user profile on his two favorite message boards, Investor Village and Motley Fool, is "private" and does not disclose his identity.

Byrne claims that the Times did not properly convey the Great One's meaning. However, given his penchant for dissembling, I think it's fair to assume that he was fairly quoted and is now backing off from a lie that is contradicted by the evidence.

Byrne says:

Please provide a citation for this claim: "Mr. Byrne said that he never hides his true identity and always signs his name when he posts under his online handle, 'Hannibal'". Is it your claim that I used the words "always" and "never" in some message board post (and if so, please cite that post), or is it your claim that I stated this in our interview? I know for a fact that the claim is false as regards our interview, and believe it to be false with regard to any online posting, but I stand ready to be corrected. [emphasis added]

(Note that Byrne is contradicting what he said in a rambling, sick rant on his website a week ago, in which he said: "I post in a way that is anything but anonymous." I guess he forgot he said that.)

What's not clear to me is why Byrne seems so anxious to backtrack. The SEC is already investigating Byrne and Overstock, so that is one possible source of pressure.

The media has given Byrne a pass over his online conduct, which was far more egregious than Mackey's and raises serious Reg. FD issues. I wonder if he will continue to be ignored now that he has fessed up. I also wonder if the SEC will take action against him or cower before his real or perceived political influence. His pet senator, Utah Republican Bob Bennett, recently gave a floor speech calling for Senate hearings on his favorite constituent's obsession, the nonexistent "naked short selling" bogyman that is a favorite of penny stock promoters and inept CEOs.

Elsewhere on the Overstock front, fraud-fighter Sam Antar has a sizzling post today on how the SEC was a victim of a "trojan horse" disinformation campaign by Overstock in its war against an analyst who dared to publish negative information about the company.

UPDATE: To round out the day's tidings from this train wreck of a company we have this: it seems that Overstock left out something pretty significant in super-hyped press release glorifying as a major "victory" the denial of a motion to dismiss in its junk lawsuit against prime brokers.

In addition, the Court granted Overstock (and its co-plaintiffs) leave to amend other of their claims for restitution under the Unfair Business Practices Act and for the common law claim of interference with advantage, to more specifically plead the factual basis of these claims.

What Overstock left out was that there were two motions, and that Overstock lost one.

An investor named Al Petrofsky, who attended the court hearing at which the ruling was made from the bench, fills in the gaps in a post on a stock message board:

[The judge] granted the defendants' motion to strike, and ruled that the plaintiffs' may not, as part of the Unfair Competition Law claim (the fifth cause of action), seek to recover any compensation for a decline in the stock price. However, they can still seek to recover such compensation under some of their other theories, such as Tresspass to Chattels (the second cause of action) or Market Manipulation (the fourth cause of action).

He gave Overstock until September 14 to submit an amended complaint that is consistent with his rulings.

Gee. Isn't it materially misleading to not disclose that you lost one of the two motions pending before the court?

Petrofsky confirmed by email that he was the author of the post.

Overstock's skewing of the truth is predictable. What is also predictable is that the media, in its coverage, swallowed whole what Overstock said, without checking further. Let that be a lesson to all of my brethren in the media.

© 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.

The Score at Halftime: Mackey 1, Byrne 0

It's interesting to contrast the heartfelt (if belated) apology released today by Whole Foods CEO John Mackey with the swinish, sick rant unleashed by Patrick Byrne yesterday.

Both engaged in inappropriate, probably illegal conduct on message boards. Mackey is starting to "get it," while Byrne is in a paranoid haze of denial.

Contrast too the internal investigation launched by the board of Whole Foods with the inaction of the famously inert Overstock.com board of directors.

That's the difference, I guess, between integrity and sleaze.

© 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.

Yahoo Message Board as 'Blog'

The Wall Street Journal today had an entire editorial devoted to Whole Foods CEO John J. Mackey's "anonymous blogging".... except.... except.... he wasn't blogging.

Well, he did have a blog, but that was under his own name.

At issue is not his blogging but his posting on a Yahoo message board devoted to Whole Foods stock. Big difference.

When not misunderstanding what Mackey was doing, the rest of the editorial was an attack on Regulation FD. That seems to be the position taken by Mackey as well: "Regulation FD be damned."

I just wish that defenders of Mackey would have the intellectual honesty to simply come out and say it.

© 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.

Today's Patrick Byrne Lie Du Jour

From a New York Times article in tomorrow's newspaper on the John Mackey message board postings, online tonight:

Patrick M. Byrne, founder and chief executive of the beleaguered online retailer Overstock.com, has for years been accused of anonymously resorting to the Internet to do battle with his company’s critics. In an interview, Mr. Byrne said that he never hides his true identity and always signs his name when he posts under his online handle, “Hannibal” (the Carthaginian conqueror, not the celluloid serial killer). [emphasis added]

Oh really? Here's Byrne's most recent post on the Investor Village message board for discussion of Overstock.com (not naked short selling or Sith Lords or bodies in trunks):



Hmmm...... seems that he forgot to sign it. Oh my.

That is not the exception, that is the rule.

Here are the name-signing stats for Byrne's "Hannibal" posts on the Investor Village Overstock.com message board, toted up by Internet sleuth "Scipio Africanus":

• 1 signed as "Patrick Byrne, CEO"
• 3 signed as "Patrick Byrne"
• 57 signed as "Patrick"
• 34 unsigned - including one "Kreskin", one "PB" and one ";-)"
  

And I would add:

• 0 that disclose that he is the largest shareholder of Overstock.com.
  

Here's a link to all the Byrne posts on IV. A strong stomach is not required but recommended.

His profile is, needless to say, "private."

His previous postings on the subscription Motley Fool board followed a similar pattern, and also was hidden behind a profile not containing his real name.

Before that, he posted anonymously on the "fuckedcompany.com" message board, although those posts have been mysteriously deleted.

One oddity about the article: I'm not sure where the Times picked up about Byrne being accused of sockpuppeting. I haven't read that anywhere. The issue is much more serious, as I have discussed in several recent posts, most recently this one.

I'm more than a little surprised that the Times didn't talk about his "I'm a journalist" cock-and-bull story. Makes me wonder: is the media intimidated by Patrick Byrne's well-documented record of "going after" critics?

Anyway, don't feel too harsh about Byrne Lie No. 2343100. The Mob is out to get the poor dear.

UPDATE: Fraud-fighter Sam Antar recounts in his blog the consequences of asking Byrne to do what he said he did in the Times:

On January 29, 2007, in a post (message number 4166), on InvestorVillage, I asked Patrick Byrne to clear up the confusion:

"Hannibal:

Can you please sign your post with your full name so there is no misunderstanding as to who is replying?

Patrick Byrne (CEO of Overstock.com) uses the handle Hannibal. Let's clear up any misunderstanding as to who is responding. [emphasis added]

Respectfully,

Sam E. Antar (former Crazy Eddie CFO & convicted felon)"

Patrick Byrne chose not to reply to the above question. Later, he complained (message number 4463) that I was acting as a “Junior Prosecutor" and asked other message board readers to ignore me:

"Is there anyone here who suspects that Sam is just trying to clog, or waste my time, or misdirect this discussion board? If you agree, please recommend this post. If we get over 20, I say that is proof that it is time we all agree to ignore Sam forever." [emphasis added]

The management of Investor Village obediently banned Sam from the Overstock message board.

Forensic accountant Tracy Coenen observes:

It’s bad enough that Byrne is not clearly and publicly disclosing his identity when writing messages about Overstock.com, but it’s even worse that he lies about it and makes it seem like he does always disclose it.

Byrne hides behind the First Amendment and free speech. Well…. he may have the right to say what he wishes about Overstock, but Regulation FD dictates how he must do that when his free speech relates to Overstock, the public company which he runs.

Byrne later tried to reconcile his lies in a rambling, psycho rant.

© 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.

Extra! Extra! Patrick Byrne Changes Careers!

I have found the reason why Patrick Byrne, CEO of Overstock.com, behaves more like a spoiled prep school brat than a corporate executive. Turns out he's not a corporate official who must abide by the rules required of heads of public companies.

Nope, he is a "public figure" and above all a "journalist," a member in good standing of the fourth estate.

This latest fantasy can be found in a post by Byrne, one that has received little attention, on his personal Overstock.com blog.


John Mackey, the Whole Foods CEO, needs to pay attention as he deals with an SEC probe -- see Tracy Coenen's analysis. This journalist stuff may be nutty (hey, this is Patrick Byrne we're dealing with), but the insanity defense has worked for some.

Instead, the media has focused on the rather pedestrian list of excuses that Mackey has given for posting anonymously on Yahoo message boards. Compare that logical if misguided list with Byrne's rambling fish story, which clearly bespeak a man who believes that his ancestral wealth inoculates him against the consequences for telling even the most blatant lies.

Some excerpts from Byrne's missive:

"I tend to discount the thoughts of anyone who insists upon anonymity (unless there is a real security concern). This applies to everyone, whether they be executives or not."

This is an astounding lie, even for Byrne, because he has a record of embracing, endorsing and promoting anonymous Internet crackpots when they favor his cause.


He has promoted on CNBC (left) a wacko anonymous website run by Phil Saunders, a former used medical equipment salesman who runs the "sanitycheck" stock market conspiracy website under the pseudonym"Bob O'Brien." This anonymous, creepy website was for months endorsed on every page of the Overstock website as a link misleadingly labeled "market reform."

But above all, Byrne has personally endorsed and promoted an anonymous website run by his director of communications and spokesman, the nauseating Judd Bagley. The latter runs Overstock.com's antisocialmedia.net corporate smear site, which began anonymously and was later outed as an Overstock enterprise by the New York Post and by Internet sleuths.

Byrne has enthusiastically endorsed those anonymous sites, which have aggressively smeared his critics and act as fan sites and PR vehicles for Byrne and Overstock.

Second, no executive (or for that matter, any employee) should ever go online to talk up her own company’s stock or try to bash a competitor’s stock price.

But as I have pointed out before, Byrne did just that at the tail end of a Motley Fool post in March 2006 (below).



His drumbeat of attacks on critics -- most conspicuously Herb Greenberg of Marketwatch.com-- are clearly designed to reassure his core buy-and-hold investors that they should not sell their shares.

I think that when a person decides to become a public figure he is relinquishing his ability to take part in public discourse without identifying himself, simply as a matter of etiquette, not law.

This would explain why he disregards Regulation FD by using the screen name of "Hannibal," not signing his full name, and not saying that he is CEO and chairman of the board of Overstock.com and its largest shareholder.

All that said, there is nothing about being a public figure compels one to surrender one’s 1st amendment rights.

Ditto. He views himself not as a corporate officer whose public statements are governed by SEC rules, but as a "public figure" who hsa "rights" under the First Amendment but no obligation under Reg. FD.

After claiming that some anonymous ID on the Yahoo boards is an Amazon employee, we get the pièce de résistance:

As a journalist, I cannot reveal my source for this information.

Oh, and that brings me to the title of this compendium of doubletalk and lies: "A thing called, "the 1st Amendment."

Translation: "SEC, Bite Me."

© 2007 Gary Weiss. All rights reserved.



-----------

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.