Tuesday, December 15, 2009

Barry Ritholtz: Boycott Overstock.com

Overstock.com's unhinged CEO, Patrick Byrne, has won a new pal from his recent foray into pretexting and cyberstalking: respected economics blogger Barry Ritholtz, who last night called for a boycott of Overstock.com.

Barry turned up on Wacky Patty's enemies list because of some mildly skeptical posts on this nutty CEO. He was completely fed up when this blog revealed that Byrne had been garnered names for his enemies list through a fraudulent pretexting and identity theft scheme dreamed up by his full-time cyberstalker, Judd Bagley.

Bagley and Byrne really need to see the inside of a jail cell over this, and Barry has set the wheels in motion:

I am totally out of patience with Patrick Byrne, his firm Overstock.com, and the punks at DeepCapture.com. Here is what I propose to do:

1) Request the FBI investigate and prosecute the identity theft, online cyber-stalking, and fraud of Judd Bagley of Overstock.com

2) Request the SEC investigate Patrick Byrne, Judd Bagley, and Overstock.com for their part in this scam. If they find it to be a fraudulent scheme, then they should prosecute.

3) Call for a boycott of Overstock.com.

Lastly, some free advice to the Overstock Board of Directors: You have a fiduciary duty. It does not appear to me that you are fulfilling it. At a certain point, you will be called out for how you handled your obligations. Wise up . . .

While I agree in principle, I would point out that Byrne would not have hand-picked the cronies and dimwits who serve on that board if they weren't going to say "how high?" when he says "jump!"

There's only one problem with a boycott, raised by a commenter on Barry's blog:

Given Patrick Byrne’s rather obvious issues, and given that the Americans with Disabilities Act of 1990 covers “mental impairment”, are you risking litigation by calling for a boycott?
The same point was not lost on a Motley Fool writer expounding on retailing stocks yesterday:

Writers take potshots at Patrick Byrne at their own risk -- but recent reports that the Overstock CEO is compiling an electronic "hit-list" of journalists deemed unfriendly to the company are truly frightening (and some have suggested, legally questionable). While the company has done a reasonable job of maintaining sales and generating free cash flow in the middle of the Great Recession, investors would be foolish (small "f") to discount the risks of investing in a company ... run by a madman.
You see, at bottom, that's the issue at Overstock: not the jihad against naked shorting, not the Sith Lord fantasy, not cyberstalking, not even Overstock's cooking the books, so that its "sales and cash flow" are actually not maintained, but manipulated. The fundamental problem with the company, the one from which all its problems flow, is that its CEO is stark, raving nuts.

I don't mean that in a bad way. Seeing a nut run a company is fascinating, sort of like watching Marley tear up a garage.

As for that boycott: great idea, except that with Byrne manipulating the financials, how would you know if it is having any impact?

UPDATE: Caleb Newquist suggests that the boycott bid may hurt Overstock's search for an auditor.

Now personally I don't have such faith in the accounting profession that I believe nobody would be dumb enough to work for these pigs. I'm sure they'll find an accounting firm dishonest or dumb enough to take the job because, believe me, Wacky Patty isn't getting anyone for the job who won't say "How high?"

© 2009 Gary Weiss. All rights reserved.

Digg my article

Labels: , , , , , , , ,

Enter your email address:

Delivered by FeedBurner