Friday, August 31, 2007

Larry Craig is CEO Material

There's word today Idaho Senator Larry Craig is about to quit the U.S. Senate. This is bad news for the Senate, where Craig has been serving as Permanent Chairman of the Senate Hypocrisy Caucus.

However, the Senate's loss is a gain for Corporate America.

Craig's press conference the other day -- the one in which he explained why he is innocent even though he pleaded guilty -- makes him a superb candidate for CEO of any troubled company.

The man was flat-out lying, to be sure. But he lied with such conviction, such bravado.

Remember that the test of greatness in an excuse-mongering CEO is his ability to lie about stuff that is in the public record. It is not enough to be a liar. One must be a baldfaced liar.

Above all, one must know who to blame. The media, of course!

“For a moment, I want to put my state of mind into context on June 11. For 8 months leading up to June, my family and I had been relentlessly and viciously harassed by the Idaho Statesman. If you’ve seen today’s paper, you know why. Let me be clear: I am not gay and never have been.”

“Still, without a shred of truth or evidence to the contrary, the Statesman has engaged in this witch hunt. In pleading guilty, I overreacted in Minneapolis, because of the stress of the Idaho Statesman’s investigation and the rumors it has fueled around Idaho. Again, that overreaction was a mistake, and I apologize for my misjudgment. Furthermore, I should not have kept this arrest to myself, and should have told my family and friends about it. I wasn’t eager to share this failure, but I should have done so anyway.”
Head hunters, take notice!

What I wonder is: can this man sell toasters? Nah, that position is already filled by an inveterate liar.

© 2007 Gary Weiss. All rights reserved.

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Last of a Breed

I don't usually wax rhapsodic over publishers, but I'm always glad whenever I hear that Joe Mansueto is involved in a media deal.

Joe founded the mutual fund rating firm Morningstar Inc. back in the early 1980s. He has since expanded that worthy enterprise, acquired Fast Money and Inc., and is said to be in the bidding for Business 2.0.

I've never met Joe, but I used to deal with him quite a bit when I was at Business Week, which very adroitly used Morningstar in preference to Lipper Analytics from the gitgo. Joe always impressed everyone at Business Week with his analytical skills and adroit business sense, so I was delighted when he decided to enter the media business.

He strikes me as just the kind of savvy businessman you want running a magazine. No (known) ideological agenda, no wack-a-doo ideas -- he's not going to trade in advance of publication and then call it a "business model, " for instance.

His involvement in Fast Company, as I understand it, essentially rescued that publication from extinction.

I'm tempted to call Joe Mansueto the "last of a breed" of hands-off, benevolent publishers. I hope he isn't.

© 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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Wednesday, August 29, 2007

Death Threat Du Jour

Writing about slimy companies always puts one in the line of fire from a sizable wacko community -- deluded microcap investors who think even the crappiest companies should always go up and up and up.

Barry Minkow is learning just how criminally inclined some of these people are.

Minkow, who masterminded the ZZZZ Best fraud scheme and now exposes stock fraud, recently got a death threat as thanks for his great work exposing a crummy little Utah company (forgive the oxymoron) called Usana Health Sciences.

It appeared on the Usana message board of Yahoo, and I'll not post a link because I presume that Yahoo -- unlike its counterparts at the Investor Village message boards -- will promptly delete that threat.

Here is a redacted screen shot:

Note the publication of purported Social Security numbers -- obtainable online, but at some cost.

Obviously Barry is on to something. He's drawing blood, and that always brings out the bloodsuckers.

© 2007 Gary Weiss. All rights reserved.

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Happy Anniversary, Judd Bagley!

Good heavens, the time passed so quickly that I almost forgot to mention it. It has been a year since Judd Bagley was hired by to stalk and harass critics of his boss Patrick Byrne.

Think of all that he has accomplished! Why, it is hard to imagine a company that is held in greater contempt by pretty much everyone who writes or even thinks about it. Talk about a public relations triumph.

The cover story for Bagley's hiring was a Wikipedia wanna-be called "Omuse." Bagley said in early June that this pathetic waste of bandwidth was about to come out of beta testing. Well, it hasn't, for the simple reason that very few people are willing to donate their time to writing on some company's wiki. But Omuse is more than just a typical disaster. In fact, there is a definite "Bagleyesque" flair to this particular disaster, as we shall be seeing.

It seems that Bagley has resolved the "no contributors" problem by having an employee write most of the articles. Now, is that Bagleyesque or isn't it? Has that special quality of dishonesty and creepiness that we have come to expect from Bagley.

Below is a list of every single article created by Omuse's dedicated users so far this month. All forty of them. Included are links to the articles.

What makes this list all the more interesting is that virtually all of the non-placeholders (articles with zero content) were copied, word for word, from elsewhere at the website. Note the disclaimer at the bottom of most of the substantive items: "The information in this guide was adapted and used with permission from"

So you have a choice. You can read the Ultimate Guide to Buying Pillows on Omuse, or you can read the Pillows Buying Guide on Ditto for dozens of other articles on an amazing array of subjects.

The creator of the lovely pillow article is a prolific creator of Overstock-copied articles, "polyhymnia." Of the forty articles, thirty-three were created by this one user! As a matter of fact, if you look at the list, you can see that practically every article that isn't a place-holder was written by this one person.

Polyhmnia was a Greek muse, which gives the name that special little wink-wink Bagleyesque "I'm smarter than you are" touch. All in all, one gets the impression that he or she is.... dare I say it.... an Overstock employee, maybe even Sleazey McSleaze himself.

I am shocked, shocked at that prospect! Why, Judd is far too busy running his corporate smear site, vandalizing Wikipedia under numerous sockpuppets, and contributing to anti-Wikipedia websites, to actually work on Omuse.

Given that Omuse is supposed to be written by nonpaid volunteers, in my opinion it would certainly be deceptive, perhaps even fraudulent, to inflate the page count of Omuse by using paid ringers if that was not clearly disclosed in each item. But hey, they don't call him Sleazey McSleaze for nothing.

Anyway, forty is a nice number, even if inflated. Goodness gracious! Forty in twenty-nine days. Why that's.... that's 1.37 new pages per day. At this rate, Omuse will be as big as Wikipedia in only 83,432 years.

So congratulations, Judd Bagley, and keep up the good work! And you too "polyhymnia," wherever you are (though I can guess).

Here's the list, reduced in size to minimize the waste of band width. The prolific "polyhymnia" "creations" have been put in boldface. Enjoy.

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Monday, August 27, 2007

Patrick Byrne Goes Speechless Over Managed Earnings

Byrne is mum on his company's accounting practices CEO Patrick Byrne has arguably the biggest mouth in Corporate America. His online rantings are the stuff of legend, and he is only to happy to appear on stock-promotion websites to divert attention from his company's abysmal performance.

So that's why it's very significant to observe Byrne's conspicuous silence this weekend -- in response to serious questions that fraud-buster Sam Antar has posed concerning inventory accounting at Sam believes the numbers indicate Overstock may be engaged in what is known in corporate crimes circles as "earnings management."

Sam posed the questions in a devastating three-part series (the last one posted here) on his White Collar Fraud blog. In the series he systematically shredded the company's accounting for inventories, which according to Sam "point to possible manipulation of earnings."

Forensic accounting expert Tracy Coenen has a valuable analysis of the issues in her blog today. The title says it all: " cooking the books?"

Sam does not raise this issue lightly, and this dead-serious conclusion -- with all it implies in terms of civil and even criminal liability -- is supported by his detailed analysis of Overstock financial statements.

He emailed links to the series to Byrne, as well as to the SEC, the famously comotose board of directors (including its famously comatose new "independent" member, class action lawyer Joseph Tabacco), and to members of the media.

The purpose was to give Byrne an opportunity to defend himself. I think you'd agree that if Byrne had an explanation, he would provide one -- an opportunity to demolish his most vocal adversary!

Sam, who masterminded the Crazy Eddie stock swindle, is one of the country's leading experts on accounting fraud. He lectures regulators, accounting groups, government agencies and corporations throughout the country on how to detect and thwart accounting shenanigans. I have no doubt that Byrne takes him dead seriously.

So as you can expect, Byrne wrote back swiftly. But, surprisingly, there was no rapier-like shredding of Sam's logic from this self-styled "doctor of philosophy." None of the quotations from Buddhist theology or even a simple "you're wrong, Sam." Byrne instead provided a flip reference to a blunder Sam made on a stock message board. And that was it.

Byrne made sure to include the Overstock board and the SEC in his response, to ensure that the people supposedly responsible for overseeing his conduct -- and the federal agency that is investigating him -- are aware that he has no answer to Sam's questions.

This all happened on Thursday. Sam followed up on Friday, just to be sure that Byrne wanted contemptuous non-response to be his official reply, and his response was still more silence.

There is an old expression, "Silence is also an answer." We know what it means in this case. It means, "You've nailed me, Sam."

Although Byrne seems to have run out of lies for the moment, I see that his paid stalker, Director of Communications and spokesman Judd Bagley, continues to pull new baldfaced lies out of his limitless supply of fabrications. The latest was posted on's corporate smear site this weekend.

Bagley, as we all know, was hired to run It was one of the most widely ridiculed (see Wall Street Follies cartoon at right) actions of Byrne's tenure as CEO. Byrne's cover story is that Bagley was hired to run a pathetic wiki called OMuse. Byrne's obfuscations and lies about Bagley and the smear site have been tracked by Sam Antar and the O-Smear blog in the past, and I've written about them many times.

Over the weekend, Bagley posted the on the corporate smear site that the "big news" that I said he was"hired to run a wiki." Here's the item:

Only problem is that I had no blog item on Aug. 25, and have never said that. (See for yourself.) I have never adopted Byrne's utterly fatuous cover story for hiring Bagley, which falls apart on even the most cursory examination.

There is clearly an inventory management problem at Overstock. com. An inventory of sorely needed lies is being squandered on the no-readership corporate smear site, when they are required to excuse Overstock's accounting practices. A shameful waste of's most valuable corporate asset!

© 2007 Gary Weiss. All rights reserved.

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Thursday, August 23, 2007

Mark Cuban Gets Mushy With Moi

Mark Cuban has some surprisingly mushy words about yours truly in a softball nterview with Portfolio Online. The 170 (and counting) derisive reader comments were a lot more interesting than the interview, but I thought his latest defense of the Shareleuth insider trading project was worth noting.

Referring to my criticism of Sharesleuth, Cuban said:

Gary Weiss is a nice guy, and I actually like checking out and reading his blog. We agree on more than we disagree on, but Gary’s commenting on Sharesleuth is nothing more than trying to get his name in the paper or a magazine somewhere.

Me, a "nice guy"? Aw, gee, shucks. Wish I could return the compliment. He goes on to say that he's "more than covered my costs with trade ideas brought to me by Chris"--which in my view is not a heck of a lot less sleazy than trading ahead of Shareseluth. I can't recall Terry McGraw ever asking me for "trading ideas" when I worked at Business Week.

This goes back to the view I've expressed before, which is that Cuban shouldn't be allowed within a quarter-mile of a newsroom. Whether or not he "agrees" with me or I "agree" with him is beside the point. The issue is Sharesleuth's "business model," which violates a bedrock principal of journalism -- you don't personally profit from articles published on your website.

Also, he's dead wrong on the last point. I turned down a chance to appear on network TV to talk about Sharesleuth not long ago, and I wouldn't even cooperate off-camera. A reporter for magazine X (Cuban knows what I'm talking about), can attest to how reluctant I was to talk about it for an upcoming article. OK, I did, but reluctantly. I'd have preferred to just rest on my previous items in this blog.

I just wasn't interested in giving Sharesleuth any oxygen via publicity (and no, I don't view my little hobby bloggie as publicity). As I've said, Sharesleuth is a flop, both commercially and journalistically. Let it die quietly. But the important thing is, let it die.

Bad as Sharesleuth is, let's put this in perspective. Mark Cuban has done a lot worse things than created that stupid website. Just look at how he financed the distribution of a film called "Loose Change" that regurgitates every nutty, discredited conspiracy theory about Sept. 11. It's disgraceful that he would promulgate such crap. On the "stupid" chart, Sharesleuth is a solid 7 while "Loose Change" is a 13, on a scale of 1 to 10. Odd that the subject never came up in the interview. (No, not odd, this being Portfolio.)

If he doesn't know what to do with his money, why doesn't he put it in a pile and light a match?

© 2007 Gary Weiss. All rights reserved.

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Wednesday, August 22, 2007

Does Portfolio Matter?

We journalists are unique in the animal kingdom in that we feed on our young. (OK, maybe pussycats do that too ... whatever.) One example is the constant barrage of criticism directed at the new Conde Nast biz magazine, Portfolio. Here's one. Here's another.

Look, they're probably right. The first issue underwhelmed me, and I'm not exactly running to the newsstand for the second one. But I am starting to wonder if the constant slamming on Portfolio isn't going a bit overboard. After all, are the competitors all that much better?

There are only a dwindling number of periodicals left that engage in long-form narrative journalism. Even a flawed outlet for this vanishing species is better than nothing.

The magazine is only just beginning, for Pete's sake. Portfolio may suck eggs in some respects, its office politics may be right out of the Kremlin circa 1938, but it is a new outlet in a contracting market. To answer my own question, it matters. Give the friggin' magazine a chance. Lay off.

UPDATE: A reader opines as follows:

I think the reason so many people have the long knives out for Portfolio is the sheer hubris of the thing. They’ve set themselves up as being somehow different than just another business magazine. We’re not just going to cover business, they seem to be saying – that’s for other, lesser publications. We’re going to be the place to turn to for great, compelling human stories about business.

From their “mission statement,” part of their media kit on the Conde Nast website (, with snarky commentary added by me:

“Conde Nast Portfolio seeks nothing less than to shape the conversation in business.” (Like other business publications don’t.)

"This highly anticipated new magazine is sharply intelligent, visually compelling, and produced by renowned editors, writers, photographers, and illustrators.” (Most of whom worked at those other, lesser business publications before Portfolio anointed them.)

"Published monthly, Conde Nast Portfolio gives talented writers the time to research stories thoroughly and the rare opportunity to shape them into compelling pieces of depth and sophistication.” (Emphasis mine, but otherwise this speaks for itself.)

“In a marketplace awash with sound bites but hungry for insight, Conde Nast Portfolio frames the big picture.”

Is some of the criticism unfair and premature? Maybe. But Portfolio has no one to blame but itself.

I'll admit, that's pretty flacky stuff. CN's public relations apparatus might have handled this better. But as the author of more than one book proposal, I'm not going to throw stones at people who engage in hype.

© 2007 Gary Weiss. All rights reserved.

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Another Road Map For Regulators

Byrne: Has he been managing earnings?

Sam Antar's blog today raises yet more disturbing questions concerning accounting practices at the cretinous Internet retailer -- exploring whether the company has been engaged in the slimy practice of "earnings management."

As he did his first installment, this accounting ace provides a veritable road map for the SEC, which is investigating Overstock and its CEO, Patrick Byrne.

The case is pretty well laid out in black and white. The only question is whether the SEC will act-- or if Byrne's real or perceived political clout will keep the SEC from acting.

Tracy Coenen says it "looks like Byrne and company are doing even more fancy math! Yoo-hoo… SEC… are you listening?"

As I've explored in previous blog items (see items tagged ""), this company has engaged in a wide range of misconduct that includes, apart from its accounting issues, the targeting and stalking of critics, the wives of critics, and even a teenage blogger. and its CEO obviously hate scrutiny, which is why I've been focusing a lot on it and will keep doing so.

These Sam Antar blog items -- there's one more yet to go in this three-part series -- also give the public a unique opportunity to explore, in real time, the evidence of misconduct at a company under SEC investigation. We know what the regulators have in their files, except that they have a good deal more. So we have a right to ask: What are they going to do about it? The ball is in the SEC's court.

That goes not just for Overstock's accounting practices, but for the activities of its nauseating propaganda minister and paid stalker, Director of Communications Judd Bagley.

No doubt in reaction to the embarrassing failure of Bagley's "Omuse" Wikipedia clone -- still in "beta" status after the greater part of a year -- Bagley has lately resumed his harassment campaign against the online encyclopedia.

In recent postings on an anti-Wikipedia website, Bagley zeros in on two Wikipedia administrators and boasts about his use of spyware. This is Bagley's justification for his seeking to extract IP data from websites he does not own:

. . . if Jayjg [a Wikipedia administrator with authorized access to user data] can discriminantly view my IP data, why can't I have access to his? Ironic that the person with greatest access to user's identifying information is the most jealous about safeguarding his own privacy, isn't it?
Wikipedia, of course, has a legal right to IP data about its users. But site users -- particularly officials of companies seeking to compete with Wikipedia -- don't have the right to hijack data from other people's websites. Bagley's comment is about as logical as saying, "If IRS officials have access to my income tax data, why can't I obtain the income tax data of IRS officials?"

Later today, Bagley used's corporate smear site to attack a Wikipedia administrator. "SlimVirgin." Why this particular administrator? Well, it seems that this was the one who had thwarted his persistent vandalism and use of Wikipedia to advance Byrne's agenda. He did this - after joining -- by clumsily using dozens of sockpuppets. Bagley omits that little detail from his item.

O-Smear reminds us that Bagley previously attempted a crude blackmail attempt against this administrator, and notes:
The fact that SlimVirgin has made it difficult for Patrick Byrne's paid PR shill to edit the, Byrne and Naked Short Selling Wikipedia articles has raised their ire to no end. I think that's what Wikipedia admins are supposed to do, so he is proof that she seems to be doing a good job of it. It upset them so much that Overstock burned up a bunch of shareholder dollars to create a competitor site, Omuse (try not to laugh). So now Bagley is not only harassing women he doesn't know, he's intentionally disrupting a competing (try not to laugh) web service.
If Bagley were employed anywhere but, he'd have long been marched out to the parking lot by the guys in security.

Again, the ball is in the court of the SEC and other regulators. Which reminds me -- I see from his blog that Sam is giving a presentation to the financial crimes unit of the Utah Attorney General on Oct. 31. They'll have a lot of questions for him, I suspect, as a leading expert on accounting fraud.

But I have a question that he may want to ask them: Will this corporate pariah continue to flout the law?

One thing for sure is that answers to such questions will not come from the lapdog board of directors, even with the addition of a noted class action lawyer, Joseph J. Tabacco Jr., to the board.

Tabacco and the other "independent" directors are fully aware of what is going on at Overstock, and should certainly bear the consequences for their failure to act.

© 2007 Gary Weiss. All rights reserved.

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Monday, August 20, 2007

Did Cook the Books?

In a press release and conference call on July 31,'s CEO Patrick Byrne announced a surprisingly upbeat second quarter. The news sent the stock climbing.

Well, it now seems that these numbers may have been misrepresented.

Corporate fraud-hunter Sam Antar, who masterminded the Crazy Eddie book-cooking scheme, has a devastating blog entry this morning describing how numbers may have been dressed up via some balance sheet hocus-pocus. Sam says that a "close examination of's financial disclosures paints a starkly different picture than Patrick Byrne's hyped up improvement of's financial results."

If this all pans out, and if it turns out that there was a scheme to mislead investors, both and Byrne -- who are already are under SEC investigation for accounting and other issues -- would be in deep trouble. Ditto for any other Overstock official involved.

Sam's posting today is the first of three parts, and I understand that the best (or worst, if one is an Overstock shareholder) is yet to come.

Forensic accounting ace Tracy Coenen observes as follows:

The issue this time surrounds Byrne’s usage of non-GAAP (Generally Accepted Accounting Principles) measures when discussing the second quarter numbers. He used something he called “adjusted EBITDA,” which is another term for “I’m making up a number that makes us look good.”

Does anyone think it’s unusual for an executive to sit around and slice-and-dice the company’s numbers to see which made-up measure will cast the company in the best light? Of course it’s not unusual. Especially if your company has never turned a profit.

Sam's blog item speaks for itself, and I urge you to read it. Still, can anyone really be surprised by any of this, after seeing the way Patrick Byrne has behaved over the psst few years? Just search "Patrick Byrne" in this blog and you can see what I mean.

When the smoke has cleared and this disgusting company is a wretched memory, I can see the class action lawyers pile on. But really, any investor who has bought the stock within the past two years -- since the nutty Sith Lord conference call -- has only himself to blame.

Sam's blog points up the value in blogs covering Byrne and CEOs like him -- heads of otherwise minor companies who distinguish themselves by incompetence and/or bad behavior. The media is simply not organized to provide the kind of in-depth attention that these CEOs deserve.

Thus the O-Smear blog has covered in depth the astonishing cyberstalking activities of's director of communications and spokesman, Judd Bagley. The most recent installment revealed Bagley's latest sockpuppet on the Investor Village message board.

Only at would an inept CEO and a cyberstalking director of communications remain employed. Byrne would have been drummed out of most companies years ago, and Bagley would have been escorted from most executive offices by security.

The media, however, simply can't be expected to follow every last turn of the screw of an ongoing corporate train wreck like The company is not that significant, and its importance is mainly a function of its misconduct.

Lee Distad recently pointed out that "being angry at Byrne and Overstock seems so futile, given what a sad and tawdry spectacle they present." That is correct, but I think that the volume of wrongdoing coming out is no reason to reduce the amount of attention being given to it.

Corporate miscreants should not receive volume discounts -- except for the kind of three-for-one special that Sam Antar is giving Patrick Byrne this week.

© 2007 Gary Weiss. All rights reserved.

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Friday, August 17, 2007

More Bad News From a Naked Shorting Poster Child

Word has just crept over the financial newswires that Novastar Financial, a leading poster child of the anti-naked-shorting nutjobs, will lay off 37% of its staff -- 500 employees.

Damn those naked short-sellers! The company says it is taking this step because of tough conditions in the markets, but any reader of stock market conspiracy websites, such as Phil Saunders', knows that they are too blame.

By the way, isn't that what companies do before they go down for the count? I sure hope not.

Novastar was pushed unmercifully on stock message boards by Saunders a/k/a "Bob O'Brien," a former used medical equipment salesman from California. He also set up a creepy stock-pumping website called Saunders has never apologized to his victims for pumping this stock.

Saunders' paranoid rants turned out to be such an embarrassment that even Patrick Byrne, CEO of, stopped hyping the "sanitycheck" site on the Overstock website. Since then its readership has dropped off to practically nothing, according to Alexa.

Investors who listened to this nut got their clock cleaned. I guess that's what happens when you get your stock tips from former used medical equipment salesmen who cower behind pseudonyms. ({I think the "Easter bunny" handle would have been a tipoff to any sane person.) Hey, if you want to lose money properly, you should take stock tips from the pros! At least you know who they are, so you can sue them.

© 2007 Gary Weiss. All rights reserved.

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Thursday, August 16, 2007

Off-putting Email of the Day

Title of an email from 1-800-Petmeds that I received this evening:

"Got fleas, Gary? Take advantage of the 'I've got fleas' Sale."

As spam goes, I'd put this right up there in the charm department with the famous Patrick Byrne Spewage Spam.

And the answer, by the way, is no.

© 2007 Gary Weiss. All rights reserved.

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A 'Must-Bookmark' Website

It's called the "hedge fund implode-o-meter" and it can be found at

As the name implies, it is a running total of imploding hedge funds -- eleven since mid-2007 -- with links to pertinent article. It's a companion of sorts to a similar website run by the same people, the Mortgage Lender Implode-O-meter.

Both sites are similar. Just the facts; no agenda that I can detect from a skim of the sites. Don't know much about the two gents who've erected them, but their hearts seem to be in the right place, and they are certainly performing a public service.

In fact, you know they're performing a public service because the Mortgage Lender Impode-O-Meter has spawned a junk lawsuit of its very own!

© 2007 Gary Weiss. All rights reserved.

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Times Select Needs Help

As a loyal reader of the New York Times for many years I was delighted when "Times Select" was inaugurated, and frankly a bit miffed by speculation that it may be disposed of.

I have no idea if that is true, but I have some friendly advice for my friends at the Times: if you are going to keep Times Select, do something about your customer service.

Today I called, or tried to call, Times Select with a simple question about my Select account that could not be answered on the website. I had a similar question a couple of months ago and it was answered instantaneously.

Here's what happened:

I called my friendly New York Times customer service center and was given an 800 number -- for a florist.

I called back my friendly New York Times customer service center, and after thirty minutes on the phone I was told that there was no phone number available for Times Select. Funny, I had just received a phone number for Times Select, but it was wrong.

Our apologies for the inconvenience, I was told. Could I put you on hold?

Ten minutes on hold.

"We do not have information about your Times Select account. Our apologies for the inconvenience."

Well, what about a phone number for Times Select, I asked.

"I'll check with my supervisor. Our apologies for the inconvenience," I was told.

Ten minutes on hold.

My supervisor is checking on that.

How about my speaking to the supervisor?

Our apologies for the inconvenience, I was told.

Briefer wait.

Supervisor: We have no phone number for Times Select. This is a technical problem so I will contact our web support team.

Me: This is not a technical issue, it is an account issue.

Supervisor: Our apologies for the inconvenience.

Well, to make a long story short, I called the Times switchboard and was given the correct phone number to Times Select. Apparently the first person I had called had switched two numbers.

So I called the actual Times Select number, where the person was slightly more helpful but, needless to say, could not answer my question.

I then received a follow-up email to my original call from New York Times customer service, providing a phone number I could call to resolve the issue.

It didn't work.

I'd say the Times has already gotten rid of Times Select, if my experience is typical.

UPDATE: Pardon me, did I imply a happy ending to my little chronicle? Certainly not. Turns out what I had was not a "simple question" but a major snafu on the part of the Times. My entire Times Select account seems to have suddenly, and for no apparent reason, evaporated.

After further calls and emails and two incorrect phone numbers (a Times specialty), the latest word, nine hours after my first call, is that a supervisor will get back to me. With apologies!

Meanwhile, the Globe and Mail asks,

if both the Times and the Journal are making money from their online subscription services – which they reportedly are – why would they do away with them? The simple answer is that opening their content up to a broader audience could provide even more revenue in the form of advertising, and more growth potential (since neither service is growing very quickly, if at all).
Another answer, at least for the Times, is an unwillingness to provide competent customer service. You can't complain about a service that you don't pay for.

© 2007 Gary Weiss. All rights reserved.

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Tuesday, August 14, 2007 CEO Patrick Byrne Spams Customers With Baloney

The meltdown of CEO Patrick Byrne seems to be accelerating.

The Retail Email blog reports that Byrne spammed customers yesterday with an email promoting the latest wack-a-doo, insult-filled rant on his personal blog. That was the one in which he blurted out that he was target of an SEC probe, contradicting previous statements.

Here's the email:

The blog, which follows email campaigns by Internet retailers, comments as follows:

In the past I’ve taken issue with CEO Patrick Byrne’s use of Overstock’s commercial email as a platform for his fight against Wall Street corruption (see Aug. 6, 2006 AM Inbox). I think it’s an unnecessary risk with limited upside, as it brings up issues that some customers may interpret negatively and that they would probably be ignorant of otherwise. In this email, it got a little more uncomfortable for me as a reader because Byrne incentivized subscribers to click through to the Overstock forum and read his rant against Wall Street by offering a 10% off discount at the end of his post. That just struck me as inappropriate.
That's for sure, and it makes me wonder if Byrne has violated Overstock's privacy policy by spamming his customers in this fashion. It says in pertinent part:

We may request your email address, or other information needed to contact you online. We use it to complete, support and analyze your purchases from and use of the web site, and to comply with any requirements of law. We use it to respond to any questions you might have and to provide you with information about specials occurring on the web site if you have chosen this service on the Account Login page. This information may be disclosed to our staff and to third parties involved in the completion of your transaction, the delivery of your order or the analysis and support of your use of the website.
"Contact you online" is not, and should not be, carte blanche to annoy customers with this type of crap. Nothing in the privacy policy says "we may use your email address to send you links to our CEO's latest nutty rant."

Byrne clearly is feeling the heat if he has to stoop to this kind of stunt. Let's hope the old saying is true in this instance: "Just because you're paranoid doesn't mean they're not out to get you."

© 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 listing and here for more information on the book, from my web site,

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Did Loss of the Uptick Rule Contribute to the Market Decline?

The Wall Street Journal's "Heard on the Street" column suggests today that abolition of the "uptick rule," established after the 1929 crash, may have contributed to the recent market declines.

The evidence of this is anecdotal, but I think this is a very real possibility. If so, then what we have here is yet another example of how the SEC's kowtowing to anti-naked-shorting nutcases has skewed its priorities and diverted the public's attention from real issues.

As I describe in Wall Street Versus America, elimination of the uptick rule was part of a package of regulations that included -- and was overshadowed by -- the ridiculous "Regulation SHO," which tackled the nonexistent "naked short-selling scandal."

Wall Street views Regulation SHO as a nuisance, not a threat to its livelihood. But the uptick rule was an obstacle to genuine (as opposed to phantom) short-selling.

So the Street was, I am sure, only too happy that Overstock CEO Patrick Byrne's lapdogs in the Utah congressional delegation railed away at Regulation SHO and the phantom menace of naked shorting -- while letting the uptick rule slip away.

And now the rest of us are paying the price.

Once again, the destructive force of the Baloney Brigade has been demonstrated.

© 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 listing and here for more information on the book, from my web site,

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Friday, August 10, 2007

Stop the Presses! Overstock CEO Patrick Byrne Tells the Truth

Today we have a real "man bites dog" story: Overstock CEO Patrick Byrne, whose wack-a-doo public statements rarely have any relationship to reality, has finally spoken the truth. Not the whole truth, by any means, but a reasonably close approximation.

In a posting on his personal message board today, devoted mainly to a knucklehead rant on the market, Byrne acknowledged that he is the target of an SEC investigation -- not a good citizen giving information to the agency on "miscreants," as he has said in the past. He also said that the probe concerns his (cough cough) "irregular" actions.

Byrne said, "Everything I have done has always been legal and ethical, but I do recognize that it has been irregular and, coloring outside the lines as far as I have, I do not begrudge the federal attention I ahve received."

I guess "irregular" is Byrne-speak for stuff like hiring a full-time cyberstalker, not disclosing an SEC subpoena for a year, saying that the company was in an OK cash position and then raising money through selling stock, setting up an astroturf website to attack his enemies, and a bunch of other sliminess that has been chronicled in the media.

Or maybe there's something "irregular" in Overstock's accounting, a focus of the investigation according to the subpoenas. That's an issue fraud-fighter Sam Antar has doggedly pursued, in pointed questions such as this recent query.

Here is the exact quote: "Through these efforts the SEC was not only 0 help, they actually helped those who I hoped to expose before a systemic meltdown became impossible to prevent. I pushed hard on the SEC but drew no response other than becoming the target of a federal investigation. " [emphasis added]

Seems that the SEC is is just like everyone else who has ever criticized or antagonized even thought negative thoughts about Patrick Byrne. They're just like Senator Shelby of Alabama. They're just like the Utah state legislature. They're just like every financial writer who has not kissed his behind. They're corrupt! The reason he is a target of an SEC investigation, he said, is that "[SEC] bosses, the brass at the SEC, have been corrupted in one way or another."

Oh well. He is Byrne, after all. Remember that this is the same man who, exactly two years ago, said in a conference call that the financial system was targeted by a "Sith Lord." Some people, such as CNBC's Ron Insana, actually took him seriously.

What makes his fessing up about the investigation so interesting is how much he has ducked, weaved, evaded and outright lied about the probe, and the SEC subpoena, in the past.

As I pointed out when the news of the SEC subpoena of Byrne surfaced in May, Byrne went to extreme lengths to convey to his shareholders that he was not the target of a damn thing, but that the SEC investigation was targeting his critics. Judging from the shareholder reaction on the Investor Village message board, his line of bull was swallowed whole.

In a post on the Investor Village Overstock message board, Byrne said, referring to the subpoena served on him:

First, after a year of criticizing me for my decision to issue a press release celebrating my receipt of a subpoena from the SEC, the shills are now trying to make a case that I should have sent out a second press release when I received another addressed to me as a person, though it was a small fraction as long as the first, covered sub-issues of the first, as well as issues related to a broader investigation that is not about me or Overstock at all. As though there is a world of difference between a subpoena addressed to our corporate lawyer asking for our CEO’s materials, and one addressed to me at our corporate address: I hate to disappoint, but that distinction is such a fine one it did not occur to me it was worthy of a second press release. The funny part is how it still has not dawnede [sic] on the miscreants that a fair bit of the material being requested by the SEC concerns THEM, not me or Overstock. [emphasis added]
I think a fair reading of the above is that he is not the target of an SEC investigation.

He then returned to the topic in a later post and said:

. . . as I recall (it has been a year), that second subpoena [on Byrne personally] was quite short, had two questions that related to areas covered by the first (I do not remember what, precisely), a third that asked if I had a 10b5 plan ("No"), and then asked for everything I had written, gathered, learned and said about the miscreants: naked shorting, collusive and manipulative practices among hedge funds, analysts, bent journalists, etc. So, given that I had just issued a press release saying, "I may be the first CEO in history to celebrate receiving an SEC subpoena," I can honestly say that I do not think it even occured to me that another press release was due: if it had, I probably would have put out one that said, "Overstock Celebrates Subpoena Indicating The SEC May Finally Be Looking Into Claims About Corruption in Our Capital Markets." [emphasis added]
This one, particularly the last sentence, makes it really clear (to anyone who believes what he says, and takes his "word" over Overstock's SEC filings) that Patrick Byrne was not the target of an SEC investigation.

Last but not least, we have this:

Here is the punch-line: as a matter of law I must tread carefully here, but I can say that the heart of the investigation is not, I would suggest, Overstock-centric, but rather, concerns itself with a strange set of relationships among ….. Well, let me just say that the irony here is just delicious. [emphasis added for the benefit of nearsighted SEC investigators]
. . . which makes it really really really clear to anyone reading it (who takes his "word" yada yada) that Patrick Byrne and Overstock are not the targets of an SEC investigation.

But he was, as is Overstock. Its SEC filings say so, and now -- amazingly! -- he does too.

This is, of course, just the tip of an iceberg of distortions, evasions, misleading statements and outright lies -- or what Byrne would call "irregular" and "coloring the lines as far as he has." You know -- cheating at school, crossing the street against the light, and lying to your shareholders. Ethical and lawful, but irregular.

Speaking of "lawful," is it permitted by Reg FD and the federal securities laws for a CEO to say stuff that is not only false and misleading, but also contradicted by his own SEC filings?

Perhaps someday there will be another man-bites-dog story to report: For the first time in his vile life, Patrick Byrne is held accountable for his actions, and all of daddy's money can't help him.

You have to admit, the irony of that would be delicious.

UPDATE: Sam Antar has a solid analysis, and Herb Greenberg ties in Novastar and the subprime mess.

© 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 listing and here for more information on the book, from my web site,

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