This will make a good movie someday… overstock.com

You never think this stuff really happens, but it does. There are crazies out there, and in a population ofthousands of public companies, at least one is going to be run by someone who is a little bit “off”.

I dont know Patrick Byrne personally. I have followed his comments as CEO of Overstock.com because I am short 20k shares of the stock (Which i shorted because Patrick Byrne is CEO), and because he is extremely entertaining. Humor, even if unintentional is hard to find in the business world, so from that perspective, his efforts are much appreciated.

I have written in the past about his amazing conference call that will go down in business history as the most bizarre ever. When Broadcast.com first broadcast live an Insight Enterprises quarterly earnings call, and then archived it for future listening back in 1996, I never could have imagined that any call would reach such entertainment heights.

I have written in the past about one of Mr Byrnes pet topics, Naked Shorting and how its become its own little XFiles conspiracy communitywith people matching Byrne with their paranoia. The only question about those guys is which will come first, a Law & Order episode mocking them or one of them actually stabbing themself in the foot to try to prove that someone is truly after them.

In any event, I guess it should come as no suprise when Mr Byrne made some comments about me in an interview this morning on Bloomberg Television . This in turn led to a request for comment from Bloomberg.

It was all humorous to me, so i thought i would share. Hope you get a chuckle out of it.

On Fri, 23 Dec 2005 1:07 pm, JEANNINE DEFOE, BLOOMBERG/ NEWSROOM:
wrote:
>
> Mark,
> Hello, my name is Jeannine DeFoe and I am a reporter with
> Bloomberg News.
> Patrick Byrne of Overstock.com was on Bloomberg television earlier
> today and made some critical comments about you and short-sellers in general.
> Here is a quote:
> “I can tell you that Cuban’s friends, what they’re going to do is
> comeafter me in January, they’re trying to get the SEC to launch an
> investigation, I think they’re going to try to get the DOJ to investigate me. Some of
> the people I’m up against are mobsters. I fully expect you’re going to hear
> about the police stopping me with a pound of heroin, or a dead body, or
> something in my trunk.”
> We want to give you a chance to respond

my response

Patrick byrne is a paranoid fool. I am short 20k shares. I would love to
short many many more shares because a rule of thumb I have is that
companies run by people I feel are paranoid fools, tend to go out of
business. That makes them a good short

Unfortunately, I can’t borrow any more shares to short. I do business
through UBS. Nobody in their organization has a way to short more
shares. (Puts are too expensive. Even shorting the stock has a huge
rebate expense attached)

I have no idea who he is referring to as my friends, but I am happy to
swear to the fact , and you can take this as a sworn statement that I
have never discussed ‘going after’ him. Nor do I have any sense of what
he is talking about.

in a perfect world, if I want a company to fail, I wouldn’t go to the
SEC, or to the DOJ. (Neither of which I have ever done, nor do I plan
to) I would just try to get them to hire Patrick Byrne.

60 thoughts on “This will make a good movie someday… overstock.com

  1. good

    Comment by imdbcn -

  2. Patrick also feels that rather than having a seasoned marketing VP in place, he should have a blonde haired ski bunny (seriously, he picked her up after meeting her on the ski slopes a couple years ago).

    Comment by runescape money -

  3. Now I think the short selling of overstock and Fairfax financial by you is interesting to say the least. You seem to share a lot of the same shorts as some wall street people that also make a business in investment media. When you combine short selling with manipulation of information and timing you get something I’m not in favor of.

    Comment by wow powerleveling -

  4. And Mark . You know this media business and you enjoy a good blog or two. Why don’t you get with Matthews and Cramer and create a satellite radio blog channel.????

    Comment by whales -

  5. I truly appreciate your decision to share your opinions with us. Your comments are very fascinating. I’m learning so much through your blog. I love reading about the way you’re sparring with Patrick Byrne. It’s very intellectually and creatively stimulating.

    I know it must sound a little naive, but I first began to realize how some of the more manipulative elements of the stock market were played through watching the Eddie Murphy/Bill Murray movie “Trading Spaces,” on cable. It seems very similar to playing a hockey or basketball game, where psyching out your opponent takes you a long way in making points and can certainly win you the game.

    Admittedly, I don’t know a lot about sports or the SEC (my background is in marketing and television development), but I feel that you are definitely outwitting your opponent on this one. Reading your thoughts on this site inspire me the way the works of Richard Feynman and Michio Kaku have helped me to discover new perspectives in life.

    PS: And your sense of humor is very entertaining.

    Thanks again.

    Best regards,
    Lori

    Comment by Lori Miller -

  6. Wrong .There was a display . It said i wasn’t authorized or something like that .

    Comment by Its strange -

  7. OK then. So you couldn’t post on the dead screen that was displaying no information? Huh. I see. OK then. http://www.TheSanityCheck.com is back up now, knock yourself out. Traffic is huge, btw, and doubling every few days – the latest Dark Side of the Looking Glass Byrne presentation is a big draw, as is the latest email exchange between Roddy Boyd (who has been frequenting the site) and Tim Mullaney and Dr. Byrne.

    Comment by Bob O'Brien -

  8. Your site would not let me but it appears your site was down and didn’t let anyone in . No lying on my part

    Comment by Its strange -

  9. The latest email exchange between Tim Mullaney and Dr. Byrne, and Roddy Boyd and Dr. Byrne, are now up and live at TheSanityCheck.com

    Anyone doubting what a snake pit that Wall Street is, and how the media is used to attack in packs by short sellers with an agenda, would do well to read those exchanges, as well as my blog comment on it.

    It’s strange, you are lying – I don’t have the ability to block you – you just don’t want to have to register, as you don’t want your identity known.

    And Mark? If you want to debate me, or better, Bud Burrell, a long time Wall Street veteran and insider, you are welcome to come to the site.

    Check out the exchanges, though, they are mind boggling…

    Comment by Bob O'Brien -

  10. Mark,
    I don’t think the puts are expensive at all. If i can short this stock 50 cents below where it is trading its a great deal until this stock is near 0. Overstock has a dumb business model-grow sales, ignore profits-that has bankrupted many companies before and will over time bankrupt Overstock.

    Comment by Francis -

  11. Phil has blocked me from visiting his site. I guess i ain’t going to be the first to know when the book is done .

    Comment by Its strange -

  12. I run the website BusinessJive.com . I’ve asked for people on all sides of this naked shorting issue to contact me for a 100% confidential interview. I even explicitly invited Mark Cuban, though he semi-graciously declined.

    Now, I’m looking for those of you paid to post negative comments about companies on blogs or in forums. Some people call you “bashers.” Again, you’ll get 100% confidentiality and if I even end up using your voice on my podcast with your permission, it’ll be distorted beyond recognition.

    Heck, I’ll even pay you for your time spent interviewing.

    Email me at judd@businessjive.com .

    Comment by Judd Bagley -

  13. i believe you can access it on the OSTK investor relations page

    Comment by Its strange -

  14. Where can I go to access the conference call Mark talks about?

    Comment by Michael Bigger -

  15. Where can I access the earning conference call that Mark talks about?

    Comment by Michael Bigger -

  16. And Mark . You know this media business and you enjoy a good blog or two. Why don’t you get with Matthews and Cramer and create a satellite radio blog channel .

    Comment by Its strange -

  17. And Mark . You know this media business and you enjoy a good blog or two. Why don’t you get with Matthews and Cramer and create a satellite radio blog channel .

    Comment by Its strange -

  18. Mark Cuban thinks this will be a good move one day . Well Phil has two novels ready for publication . ” The Hedge ” and ” Fatal Trade” and is working on a “non-fiction” call ” Symphony of Greed – Financial Terrorism and Super – Crime on Wall Street ” . I agree with Mark in that there will be a move but can’t say if it will be good .

    Comment by Its strange -

  19. http://www.thesanitycheck.com is Phil’s new website. I hit ” Advertise on this site” and http://www.apostlepersonality.com came up. That is Phil’s and his brother ,the Reverend George’s website. I kid you not. To the extent there is something to this naked shorting issue , Phil and Patrick and that lawsuit has hurt the cause. Many have been bagged

    Comment by Its strange -

  20. I don’t care much about the stock market, butr after dealing with overstock.com, I look fwd to complete failure. They have the most inept customer service. So, if you want to know what the consumer thinks, I think I will take my business elsewhere. They lost my business and I will make sure they lose all my friend’s business. When will companies realize that a little investment in customer service will pay dividends in the end?

    Comment by Mike -

  21. strange,

    Yes I believe the lawsuit has merits. We are so free to believe a company will exercise a pump and dump but somehow believe Hedge Funds and the like would not do the opposite. Why? It was Hedge Funds that got caught in all my examples above.

    As for why those I mentioned are not mentoned in the OSTK lawsuit – Fiero is barred, Elgindy is barred and in Prison, Scott Ryan is barred and the Hedge Funds he aided never identified. Izzy – Who knows where his investment is.

    OSTK is far from the only company abused. Hedge Fund industry is a $1 Trillion Business with thousands of seperate firms. The enforcement on their fraudulant acts are just starting.

    If you do not believe that, read the end of year press release by the NASD. 2006 focus, Naked shorting and PIPE deals.

    If you look to the OSTK lawsuit, David Rocker ironically held a significant short position in SHO companies (TASR, NFI, OSTK, ALD, TZOO, AAII, KKD, etc…) and was fortunate that TASR, NFI, TZOO, and ALD all had SEC investigations that yielded nothing but market cap losses.

    Comment by Dave -

  22. Dave…I’m sure you have read the OSTK suit . You think it has merit ? Why aren’t any of the charged you just posted here and in your online paper mentioned in the OSTK suit ?

    Comment by Its strange -

  23. If Short Sellers are so smart, why do they need to cheat to succeed? – January 1, 2006

    David Patch

    Do you ever read the articles the financial press puts out on short sellers? The Wall Street Journal, NY Post, theStreet.com (NASDAQ; TSCM) and Dow Jones (NYSE; DJ) affiliate Marketwatch.com all compare short sellers to geniuses. To paraphrase the bunch, ‘short sellers are much more thorough in their due diligence which generally leads to them being correct more of the time’.

    In an e-mail exchange last week with CNBC’s Mad Money Host Jim Cramer it finally came to me, an epiphany. If short sellers are so smart, why do they have to cheat to succeed? I asked Jim that very same question. Jim never responded

    First, let’s lay out some of the scandalous acts orchestrated by Hedge Funds and short sellers to achieve success and then you can decide for yourself whether these investors are “savvy” or are some just plain criminal.

    First the Highlights:

    Late Trading/Market Timing. A scheme orchestrated between Institutions and Hedge Funds allowing Hedge Funds to trade in or out of their positions after the prices had been set. Wall Street Institutions and hedge funds have paid several billion dollars in fines associated with this act of fraud.

    Insider Trading in Private Investment Financing [PIPE]. Hedge Funds involved in the placement sell short ahead of the public announcements in order to lock in profits. Several regulatory enforcement actions in 2005 revealed a systemic industry involvement in this practice.

    Short and Distort. Hedge Funds and short sellers short heavily into stocks and then pressure regulators to go on a witch hunt against those companies in order to publicly discredit the companies. Investigations that ultimately yield little if anything from the regulatory front but have a significant impact on the trading value of companies under investigation.

    Naked shorting. A scheme of concentrated short selling in a security where trades cannot settle and sell side pressure from the excessive selling drives value out of the stocks. Institutions overlook the requirements of settlement in order to maintain the Hedge Fund business. SEC released Regulation SHO to correct the abuse but revealed a ‘grandfather clause’ in the reform to protect large pre-existing blocks of failures in the system.

    With a list of sins such as this, it is no wonder the Hedge Fund Industry has prospered these past few years. To be able to rig the markets to your favor and to sell at will, even to multiple levels of manipulation, to achieve profitability rarely has anything to do with a genius mindset. Any idiot can pass a test if given all the answers.

    Read the full atricle at:

    http://www.investigatethesec.com/DP20060102.htm

    Comment by Dave -

  24. If Short Sellers are so smart, why do they need to cheat to succeed? – January 1, 2006

    David Patch

    Do you ever read the articles the financial press puts out on short sellers? The Wall Street Journal, NY Post, theStreet.com (NASDAQ; TSCM) and Dow Jones (NYSE; DJ) affiliate Marketwatch.com all compare short sellers to geniuses. To paraphrase the bunch, ‘short sellers are much more thorough in their due diligence which generally leads to them being correct more of the time’.

    In an e-mail exchange last week with CNBC’s Mad Money Host Jim Cramer it finally came to me, an epiphany. If short sellers are so smart, why do they have to cheat to succeed? I asked Jim that very same question. Jim never responded

    First, let’s lay out some of the scandalous acts orchestrated by Hedge Funds and short sellers to achieve success and then you can decide for yourself whether these investors are “savvy” or are some just plain criminal.

    First the Highlights:

    Late Trading/Market Timing. A scheme orchestrated between Institutions and Hedge Funds allowing Hedge Funds to trade in or out of their positions after the prices had been set. Wall Street Institutions and hedge funds have paid several billion dollars in fines associated with this act of fraud.

    Insider Trading in Private Investment Financing [PIPE]. Hedge Funds involved in the placement sell short ahead of the public announcements in order to lock in profits. Several regulatory enforcement actions in 2005 revealed a systemic industry involvement in this practice.

    Short and Distort. Hedge Funds and short sellers short heavily into stocks and then pressure regulators to go on a witch hunt against those companies in order to publicly discredit the companies. Investigations that ultimately yield little if anything from the regulatory front but have a significant impact on the trading value of companies under investigation.

    Naked shorting. A scheme of concentrated short selling in a security where trades cannot settle and sell side pressure from the excessive selling drives value out of the stocks. Institutions overlook the requirements of settlement in order to maintain the Hedge Fund business. SEC released Regulation SHO to correct the abuse but revealed a ‘grandfather clause’ in the reform to protect large pre-existing blocks of failures in the system.

    With a list of sins such as this, it is no wonder the Hedge Fund Industry has prospered these past few years. To be able to rig the markets to your favor and to sell at will, even to multiple levels of manipulation, to achieve profitability rarely has anything to do with a genius mindset. Any idiot can pass a test if given all the answers.

    Read the full atricle at:

    http://www.investigatethesec.com/DP20060102.htm

    Comment by Dave -

  25. Ahh King Midas with the Golden touch – he searches for something to turn into gold immediately but then turns himself mad and kicking himself for doing it so.

    I will buy buy buy, near poverty level I do not believe so. Someone with the last name Byrne owns more than 60% of OSTK, and their friends own most of the rest (that is why it will be fun to see all you shorts try to cover). The open market will reign.

    Push it to the low teens, I suppose I am a sucker but I will buy more. There are at least 5 million shares needing to be covered and estimates have ranged up into the mid 20 millions that need to be covered – cover at your 15, your 16, your 22, 26, 28, 35….what’s this? The price goes up as people have to buy back to cover shares?

    Go for it.

    For me, I buy shares that I feel I can’t sell for at least 5 years, what’s the fun of staring at stock screens and having an aneurism any time a price changes 1 or 2%? Go for it Midas with your golden touch, have fun. In 5 years, Overstock will be wiping the floor with doubters and waxing it with outstanding EPS, Rev and yes, still growth.

    Flock with the crowds and lose money with them too.

    Mark

    Comment by Mark -

  26. Naked shorting is the an unfortunate symptom of a bad company, not a cause. Byrne has the right to go on a crusade to stop it, however, he should step down as CEO and let someone with better company focus do the job of running Overstock.com.
    Overstock needs to investigate why they have had more complaints against them to the Better Business Bureau this year than both Amazon and Ebay. They nearly match Ebay and Amazon’s combined complaints!! This is a shocking number considering how many MORE orders Amazon and Ebay have compared to Overstock. If the focus is shifted back to getting the company on track and profitable, the shorts, naked or otherwise, will go away.

    Comment by The D -

  27. naked shorting – can you explain this if nothing “strange” is going on? this will make a good movie one day, but i doubt you will be the protagonist

    http://www.businessjive.com/nss2/darkside2.html

    Comment by i v -

  28. some soon-to-enter poverty fella opines:

    “Mr. Byrne has the brains, the ambition and the right people (and a willingness to bring in people when he needs them) to take OSTK through anything. Short them all you want, sell now to get your cap gains tax break – I’m long and will only continue to buy more.

    well, tell ya what — lets talk again in 6 months. OSTK will still be in the red, probably trading south of $20, and you’ll be sorry you bought more on the dips.

    Comment by king midas -

  29. Mark,

    Do not expect and answer out of Cuban on your questions. He is a coward. He fails to have the mental capacity to explain how EVERY TIME Byrne purchases shares they never seem to be able to be delivered. NEVER!

    As for Cuban, the latest lap dog for the short sellers, have him explain this;

    If short sellers are so intelligent, why is it they have to cheat to be successful?

    Examples;

    Late Trading/Market Timing was a scandal centered around increasing Hedge Fund Profits. It was the equivalent of getting the test answers from the professor before the test was given. Billionaire Izzy Englandar had to do this in a well orchestrated scheme just to make his wealthy clients happy. Smart Guys huh!!

    Illegal shorting ahead of a PIPE. Yea, naked short on non-public information, manipulate a stock, and take in the profits. There are too many examples of this to mention but..again, talent at work here.

    And then you have the whole naked short, settlement failure issue. Hire a market maker to use his exemption to sell naked for you when you can’t borrow shares, and at all cost, never cover on a trade that doesn’t settle. Short sellers will also whine to the Regulators after going short in order to create a false investigation to help with profitability (TZOO, TASR, ALD, NFI, etc…)

    Funny how all these short sellers are so intelligent that they can’t even trade failrly in teh markets to succeed. They are as insecure as knucklehead Cuban here. Funny hoe Cuban talks about teh character of Byrne – Has he looked in a mirror lately?

    Comment by Dave -

  30. Maybe someone can also inform us as to why the SEC and DTCC REFUSE to divulge the true number of shares that meet failure to deliver- we all know it is huge.

    Maybe at some point we can get the info when theSEC decides it isnt in buisness to protect the interests of criminal stock operators.

    Comment by Mark -

  31. Let me start of by saying I am in favor of being able to short a stock, just as I am in favor of purchasing shares in companies. You can’t really have one and not the other; this helps our capitalist society work (it’s logical that if you can make bets about a business succeeding – then you should also be able to make bets about a business failing).

    Now I think the short selling of overstock and Fairfax financial by you is interesting to say the least. You seem to share a lot of the same shorts as some wall street people that also make a business in investment media. When you combine short selling with manipulation of information and timing you get something I’m not in favor of. I would almost suggest that you steel money, but unlike Robin Hood you steal from common everyday folk – not the rich.

    Let me explain how manipulation of the stock can work. A friend of yours that runs a “stock research” firm calls up and talks to you about company A, you tell him all the negative things about company A and tell him not to release his negative report until you have had time to acquire your short position. After acquiring your short position the news is released and the stock goes down, you cover and make your money. Now did you make money because you were right or rather because you used illegal information? It should also be noted that the inverse works as well, buying shares of a company and then releasing a favorable opinion of it. This I am not in favor of because people end up manipulating the market for stocks and profiting on the short term reactions of people. It is after all human nature to buy on good news and sell on bad news and if you happen to own a hedge fund with ties to the media, you can predict to the minute when that good news and bad news will be released.

    Mark, it’s interesting to see that you seem to have a lot of the same shorts as people who are being accused of manipulating the media for personal gain (Fairfax financial, and Overstock). If this is a coincidence I apologize, but it does reek of something.

    I would expect you to be an exemplar when it comes to investing and steer clear of anything close to the line – but you haven’t and that costs you a lot of respect from people – not that you care because I suspect you don’t. If you are willing to go on record of stating that you won’t cover your position until the stocks reach $1 it would be different. If you truly believe these, two, businesses will fail than you should have little problem shorting them until they go out of business.

    People listen to you because you have money. It’s a shame you didn’t make that money investing in public companies because people then I would probably listen to you. You’d be wise to read about the people that make money from actually owning companies (not the wall street crowd that make money off encouraging massive amounts of transactions, taking exuberant fees).

    Eventually these businesses will either prosper or die. In 5 years we can revisit this and see who is right. Ohh another idea… if you are confident that you are right, and I mean confident, if in five years these businesses are still around you donate 10M to cancer research? Are you willing to take that wager?

    Cheers,
    IV

    Comment by blog this -

  32. Folks, regardless of what you think of Byrne, one thing never seems to be addresses:

    The guy’s stock has been ILLEGALLY shorted with millions of counterfeit shares. Overstock has been on the threshold list for over 130 days! Anyone care to discuss the issue of criminal short selling, I would love to hear you explain how this is OK.

    Comment by Mark -

  33. some misguided soul writes:

    “Mr. Byrnes is a classic example of our society’s long history of a “double standard” being applied to those who suffer from mental disorders when it comes to the prejudice and social stigma linked to them.

    If Mr. Byrnes came from working class family with no financial connections he would probably be fired, demoted, or be considered “a threat to workplace safety”. However, because Mr. Byrnes and his family have a certain amount of wealth or control of capital he is considered to be “extremely entertaining” or “a little eccentric” and given a position of high visibility and compensation.”

    what? where did you buy your crack?

    Where is the proof about Byrne’s mental disorder?

    If the stock tanks more, it’s because OSTK is losing money hand over fist. not because Byrne is sick.

    The problem is with OSTK is that you have a bunch of shorts on it and they don’t even know why they’re short — its called “short crowding.”

    I maintain my $20 target on OSTK, neverthless.

    Comment by CMG -

  34. So how many of you have sent a shoe to Cuban with a note saying “now that I have one foot in the door how about letting me bring in the other”. Who knows, maybe he pulls a Jeff Matthews and deletes any negative comments. Don’t worry Mr. Cuban, your Yes Men are here.

    Granted, Mr. Byrne has his eccentricities. So does Mr. Cuban (at least C didn’t bring back Fat Lever to the Mavs). OSTK only has about 600 employees, with those they generate $800 million plus in revenue, not too bad. They have had their problems and growing pains, but anyone would and everyone does. They will get there though. For example, they just signed a big deal with Ingram Micro which will boost up their tech offerings and their Ski West acquisition back in the summer is really gaining momentum.

    Mr. Byrne has the brains, the ambition and the right people (and a willingness to bring in people when he needs them) to take OSTK through anything. Short them all you want, sell now to get your cap gains tax break – I’m long and will only continue to buy more.

    The podcast on http://www.businessjive.com is great, there is also one on NSS from him.

    Keep blogging, you don’t shout your mouth of on TV as much anymore (probably the fines are too expensive) so its great to hear from you somewhere.

    Mark

    Comment by Mark -

  35. Mark,

    Maybe he is a schizophrenic who hired a consult that is paranoid, that is getting input from a sociopathic lawyer. I digress…In any case, the guy is no Warren Buffet. You will prevail. Modesty beats paranoia any day of the week.

    Best,

    Matt

    Comment by Matt -

  36. Dear Mark,

    Mr. Byrnes is a classic example of our society’s long history of a “double standard” being applied to those who suffer from mental disorders when it comes to the prejudice and social stigma linked to them.

    I have a parent (who lives with me) and who suffers form a very severe and debilitating mental illness called schizophrenia. (http://en.wikipedia.org/wiki/Schizophrenia) One of the biggest problems (next to the actual mental disorder itself) is the prejudice and social stigma that goes along with most mental disorders (even from those in the “enlightened” medical profession).

    If Mr. Byrnes came from working class family with no financial connections he would probably be fired, demoted, or be considered “a threat to workplace safety”. However, because Mr. Byrnes and his family have a certain amount of wealth or control of capital he is considered to be “extremely entertaining” or “a little eccentric” and given a position of high visibility and compensation.

    This is one of the reasons I have worked so hard at trying to become a successful entrepreneur. Because someday I want to earn enough money so that my parent can be considered “a little eccentric” rather than being labeled “just crazy”.

    -Daniel

    Comment by Daniel Thompson -

  37. Certainly the entire issue is getting a lot of publicity at present, not least with the coverage at the Register.

    Still, I’m sure someone once claimed that all publicity is good publicity – certainly there has to be a brand marketing element for Overstock.🙂

    Comment by Brian -

  38. Ive worked with Overstock on and off for some time and have met Patrick on several occassions. At first, I considered Patrick to be somewhat of a maverick in that he took different approaches to everything. In retrospect it is obvious that he’s been hearing voices for some time now, and I dont believe that the voices he’s hearing are coming from his management staff.

    Over the past year, he has made many decisions that are horrible. OSTK decided to implement Oracle. The whole world told him it would take 4 months to do, he said he would do it in 6 weeks. Guess what? It took 6 months, still isnt finished and is responsible for the loss of tens of millions of dollars in sales this year. He canned the VP of IT for the failure even though Byrne was responsible for the failure.

    Remember that press release back in October? It came late on a Friday afternoon and said that OSTK has great deals, that they just did a huge inventory upload? They knew for 4 months that there was a problem with uploading inventory (mainly, that they couldnt), but they told no one – not even the shareholders. Meanwhile, their buyers were frustrated at the fact that they couldnt buy any product – they couldnt issue POs or get inventory into their warehouse. And all of the overstock “partners” (the companies that drop ship product for overstock, which is 60% of overstocks sales) were unable to add product as well. This is the reason for poor sales this year – Byrne completely bungled an IT implementation, and while he half-assed took responsibility for it – that hardly solves the problem which is his incompetence.

    Another problem ostk is facing is that they have no veteran purchasers left. Mind you, this is a company that relies on buying “overstocked” product from manufacturers. Patrick is a sucker for bad deals, read back through the conference calls and see how many times ostk ahd to write off bad inventory. Its because he made bad buys but wouldnt let his veteran buyers do their jobs. All of their senior purchasers have left now – most of them sick of the Ivy League corporate attitude that Byrne has put in place.

    Patrick also feels that rather than having a seasoned marketing VP in place, he should have a blonde haired ski bunny (seriously, he picked her up after meeting her on the ski slopes a couple years ago). Granted, she has a degree in neuroscience or something like that, but hardly has the pedigree for marketing – and such is the reason for overstocks “tampon” commercials during college football games. She’s also the one behind the “binomial marketing experiment” which was responsible for a $2.6mm loss this year. He also has another of his VPs with whom he’s had on and off again affairs, she has no experience yet she somehow managed to become VP – everyone in the company knows whats going on, everytime he buys a new condo, she’s the one that picks out his furniture. The rest of the new hires at ostk are ivy league grads, no work experience, just a pretty little diploma. Its amusing to hear Byrne rattle on about how he’s taking on Wall Street to protect Main street – this is a man who has generations of wealth, who grew up with his “uncle” Warren Buffett, and he wants everyone to believe that he stands for the common man? That he would believe such nonsense shows that he simply isnt all there.

    None of this really matters, Patrick and his daddy own most of the stock and there are rumblings that they will take the company private in 2006, which is best. He’s a huckster and shoudlnt be allowed to play with other people’s money.

    Comment by Bob McMasterson -

  39. “I think a company should focus more on the product then tying to entertain the world with its commercials……”

    Don’t you get it?

    look behind the freudian veil (this is all about byrne jr and sr. anyways) — the STOCK is the product.

    OSTK is in the business of peddling mendacity.

    Alas, sunshine will disinfect their pernicious MO and leave the stock gutted on the internet highway………

    Comment by stock junkies -

  40. I think a company should focus more on the product then tying to entertain the world with its commercials.

    Comment by Jason -

  41. The comercials for OSTK, aired on ESPN, featuring an all white background, and a woman in white hawking housewares seemed terribly misplaced leading up to Christmas. Might have been better on Lifetime, or the Oprah show.

    I do agree with you Mark, that a company that focuses on stock traders rather than its business is probably doomed. All of those shorts have to cover at a loss, unless the company goes broke.

    Comment by TiVoLater -

  42. Patrick Byrne animated slideshow on naked shorting. Give it a chance, I’m glad I did.

    http://www.businessjive.com/nss/darkside.html

    Comment by Jimmy -

  43. hey, look – another day, another 8% OSTK is down.

    Cuban, I bet you’re making money hand over fist.

    word on the street is that Patty’s bout to delcare a tender and take that hemorrhaging Overstink.com private.

    Comment by stock junkies -

  44. OSTK is tanking again today, boys…

    see our forecast above.

    man, this guy’s really adept at destroying shareholder value!

    Comment by stock junkies -

  45. Patrick Byrne is unreal. I have to wonder if he is being geniune or if he thinks that “any press is good press” so he’s intentionally acting like an idiot… either way, it is entertaining.

    Comment by Preston Wily -

  46. I have heard the podcasts aswell and thaught they was pretty good.

    Comment by mark scott -

  47. I have heard the podcasts aswell and thaught they was pretty good.

    Comment by mark scott -

  48. I made my mind up on byrne a while ago but am taking another look since I found some podcast interviews about him. You see another side. anybody else hear them? http://www.businessjive.com

    -j

    Comment by Jenny Irazabal -

  49. Well, I guess if you are going to short a stock, the CEO is as good a reason as any. Thanks for the entertaining reading. That was great.

    Comment by Haake -

  50. Mark, I’m naked, she’s naked and I short stock indices at least 45hrs a week and once in awhile I also short the MAV”S😉 lol . Please don’t send your NBA home office friends after me.🙂

    I gave the OSTK pee wee H type the benefit of the doubt after watching CRAMMMMMER ( licey mad money) mouth him repeatedly. butt, I also give CRAMMMMMER some credit when he’s right even though it’s usually belated. LIKE NOW….. He’s still a stock front running creep.🙂

    NIce couple of MAV wins lately..this coming from a SPURS fan who may be including MAVS to the very *short* A-1 LIST.YOU’d already of made it if your stars played defense and FOLLOWED THEIR DAMN SHOTS..😉

    keep the humility…

    Comment by Ron D -

  51. On Saturday, the Wall Street Journal published a story on Rocker Partners, one of the firms that’s betting Overstock ‘s share price will continue to drop. Expect to see OSTK shares take yet another whacking on Monday, which is when institutional traders return to work.

    Some are comparing Overstock.com to a young Amazon (AMZN), which we deem utterly puerile. Amazon, in it’s hypergrowth phase, was led by an astute businessman. Byrne is no manager, although he’s one hell of a raconteur.

    Comment by catablast! research -

  52. Its time we hear from OSTK’s BoD . Let Patrick go to Hollywood with Phil and his brother

    Comment by Its strange -

  53. http://forums.christiantraders.com/viewthread.php?tid=5168

    Mark Cuban is afraid to debate the facts about naked shorting on air. Mark if you’re so right that naked shorting doesn’t exsist then step up the plate, or lose crediblity.

    Comment by My Blog -

  54. So next month the freak will be caught with a bunch of heroin and a dead body, and he’ll say, “I told you so!!!”

    Comment by Ken Geis -

  55. hehe

    Comment by Randy Charles Morin -

  56. OSTK is going to fail miserably starting in 2006.

    CEO Pat Byrne has spent the majority of 2005 in a catatonic state of corporate paranoia. He claims that there is a “conspiracy” against him and his company, an online retailer/liquidator mired in operational woes. When he’s not driving his company into the ground, he likes to jump on internet message boards, where he spews farfetched narratives that are better left for Hollywood, not Wall Street.

    Managerial eccentricity and oddball behavior should raise red flags. Pat Byrne seems to be better at scapegoating externalities and dressing his company’s shortcomings in convoluted tropes and pop culture innuendo than he is at addressing Overstock’s financial health, or lack thereof.

    So far this year, Overstock has burned through at least $80 million by our count. Meanwhile, shopper acquisition costs continue to rise; Overstock is hemorrhaging cash.

    The writing is on the wall: Overstock’s problem isn’t rampant short selling — it’s mismanagement. Everything from implementation problems to bloated marketing expenses points to management’s inefficacy. And that’s just the tip of the iceberg. OSTK’s receivables turnover ratio also leaves much to be desired. Overstock’s ratio is lower than it peers, meaning Overstock’s collection policy needs some fine-tuning. Even though Overstock’s revenues are climbing (but margins off their 2002 high), we are reiterating our sell rating on shares of Overstock.

    Our feeling is that OSTK will either plummet to the teens in early 2006 or be sold to a company that can liberate Byrne and his cohorts from years of misery.

    Comment by catablast! research -

  57. That’s hilarious. I love how bitter that dude is. Wish I was onboard the shorting gravy train.

    Comment by tim in tampa -

  58. Well looking at the 2006 earnings estimates it would appear the heroin business would be more profitable than the overstocks.

    Comment by Doug Fleener -

  59. LOL… Seriously… I thought it was funny. Please don’t send your friends after me.

    Comment by Duane Keys -

  60. that is simply hilarious!

    Who else are you shorting because they are run by inepts? How do these inept people get this far up the corporate ladder?

    Comment by Greg -

Comments are closed.