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SEC investigation. I don't pull any strings at the SEC. The SEC didn't need me to develop this case, and my sense is that this has to do with far more than Overstock.com. We're the tip of the iceberg.
Overstock doesn't have any profits. Isn't that a legitimate reason for someone to short the stock?
Byrne: Shorting is great. Shorting is absolutely legal.
You've shorted, right?
Byrne: I've shorted a couple of times. Shorting is perfectly legitimate and fine, but this isn't about shorting. This is about naked shorting. The intellectual bankruptcy of The Wall Street Journal and similar organs is to try to pretend that this is a fight about shorting. This is not a fight about shorting, as I will repeat for the nth time. The naked-shorting fight is a fight about failures to deliver. It's not the same as shorting.
(Editor's note: Click the following links for discussions of shorting and naked shorting.)
Your father said on Friday that he may quit as Overstock's chairman. Is there a family feud over this issue?
Byrne: No, there's no feud whatsoever. We remain quite close. You know, when you're 74, you feel differently every day, based on what you have for breakfast that morning. But no, we're quite close, and you know, he's 74 or 75, and he wants to step down. He's going to step down, and I've wanted him to be chairman. I had him as chairman for the first three years of the company. A year ago, I asked him to come back. He just came back six months ago. It took me nine months to get him to be chairman again, and now he is making noise about maybe stepping down.
It sounds like he disagrees with you on this fight. Is that true?
Byrne: I think he thinks just what he said, that this has been too much of a distraction for me.
Does that hurt? It's your father. Why would he go public with his feelings?
Byrne: It didn't even really occur to me that it should hurt. I never really expected him to get this fight. He is my best friend. We've had our rough patches, but he is my best friend. We're wired a bit differently. He brought me up teaching me about how bad Wall Street is, how Wall Street is so evil.
I remember he used to come in, discouraged after spending time on Wall Street about the caliber of men that he found. There were some exceptions, but in general, I remember how discouraged he would become (in my teenage years), as he really got to know how Wall Street operated. I think he thinks it's too big a dragon to slay.
What are Overstock's problems right now, and when will the company be profitable?
Byrne: I don't know. We have a plan this year that we should cross the billion-dollar mark. Put it this way: Amazon, at our stage, was losing $1.2 million a year in operations. It made up a phony accounting standard--pro forma. And when it reached pro forma breakeven, Wall Street set off fireworks.
When it reached EBITDA (earnings before interest, tax, depreciation and amortization) breakeven, Wall Street wanted to declare it a national holiday. I've never used pro forma in my life. We've had some GAAP (generally accepted accounting principles) profitable quarters, plenty of operating profit and EBITDA profitable quarters. This year, with a little luck, we should be an EBITDA-profitable year, so I'm kind of comfortable with that.
Is that why Wall Street doesn't like you?
Byrne: I was told that I would be a pariah forever on Wall Street, just for having gone with the Dutch auction. We're now exposing a really seamy underside of Wall Street. I'm not ever going to get any support on Wall Street, but that's OK. This is going to be so much bigger--what is being exposed is so much bigger even than what's being talked about in the public now that I'm sure Wall Street will--well, they won't be erecting any statues of me there.
The basic problem: Wall Street has a system for being parasitic on Main Street, and it's illegal and it's hidden, and there are some people who figured it out, and it's no longer a bunch of pajama heathens; it's economists, serious economists. You know, one was the undersecretary of commerce under Clinton, one was an economist of the Depository Trust & Clearing Corporation (DTCC). There are people who get in touch with me and say, "What you're saying is absolutely right."
I've become sort of the central point for people who believe that America is being handicapped by this system of miscreants. Once you understand it, it's like that movie "The Matrix." Once you've seen it, you start seeing the entire world this way. It becomes so clear what's happening, and then I just can't turn my back on it. The board of directors is welcome to remove me at any time, but until they do, this is just not about Overstock, this is about Main Street America and entrepreneurship, and somebody has to stand up to these people.
Do you think this fight has distracted you?
Byrne: It has been a distraction. They have many ways of going after small companies, and especially if anybody fights back, they have ways of making it difficult to fight back. One is, they just say, "(This person) is a lunatic. Anyone who believes in this stuff is a lunatic." It becomes such an enormous distraction that most companies can't put up with it, but fortunately, this is no longer my distraction.
This is moving into the realm of Washington, D.C. I'm not talking about the SEC; I'm talking about how a lot of other people in D.C. are getting their minds around this. And I think that there is, as of today, actually, a great big, U.S. government-grade, hot fudge high colonic getting whipped up for some fellows on Wall Street.
Why haven't you gotten more support? There must be other people who see this problem with Wall Street.
Byrne: Well, there are. Some of the things I say--everybody in Wall Street knows they're true. For example, the way an IPO really functions. Anybody who has worked on Wall Street a few years can tell you that that's how it works. Not a single one has ever said I was wrong about how an IPO works. They just don't like me explaining it to the world.
The Internet has let people combine at a grassroots level to gain an understanding of somebody's systems. In general, the mass media leaves financial matters to the Wall Street press, and it's not a conspiracy. It's more like the days of the Washington press corps, pre-Watergate. There was all kind of stuff going on in D.C.--with Johnson and Kennedy and Nixon--that basically everybody in the know knew about. And yet they were all poker-playing buddies, and it just didn't get written until two 20-year-old reporters, who weren't part of the system, got it and started writing about it. That's very much like the way the Wall Street press is with Wall Street.
I used to consider myself a Republican, but all these guys are not just pro-business, they're just pro-Wall Street. It doesn't matter what the issue is. They are just blindly and mechanically pro-Wall Street. So why don't more people know about it? Journalists sit there, waiting for years for the big break, for some huge scandal and so forth, and there is (a scandal) sitting there, and I'm just amazed more journalists don't pick up on it. I think the problem is, if they're nonfinancial journalists in general, they don't understand it.
Has this Wall Street fight slowed your pace?
Byrne: I developed a bit of a heart issue that has slowed me down. Really, for the last year-and a half, this fight has sucked up all my spare time. I spent 10 to 12 hours a day at Overstock, and I spent sometime each evening working on the "jihad"--that's what I call it.
I've been to Afghanistan and Iran and Saudi Arabia, and I also started Worldstock, and that's taken me around quite a few places. But I haven't traveled as much as I used to. I'm slowing down. This fight has been really all-consuming, though I really do think we have reached the breakthrough point. I think we have reached it quite recently, not just with the SEC subpoenas. When (the issues) erupt for all the world to see, I'll say this fight is in better hands than mine.
See more CNET content tagged:
Overstock.com Inc., hedge fund, controversy, Wall Street, prediction
I would like to see some "journalist": acknowledge that this case is about a lot more than just Overstock.
As a reporter I would be looking for the guts of the story not dancing around the side-lines. But then, maybe the managing editor has told him to stay away from too much dirt-digging.
I really hope that this is just the beginning of the exposé on just one of many rorts to be found flourishing on Wall Street. As someone who has worked in the financial industry I know first hand that it exists largely for its own purposes, its own greed, and actually serves little purpose apart from that. Most functions of the financial community could be handled in other ways, with far less cost, and significantly more benefit for the company and the man in the street.
Go Patrick. I just hope you survive it, because it is a big dragon to slay.
PS. I love what you're doing with Worldstock - I just hate the fact that your doing what I have wanted to for while.
How can you sell or "borrow" shares that don't exist?
Bud Burrell is a known penny stock tout with sleezy offshore dealings and CFRN uses Christianity for stock fraud and mind control just as the CMKX Diamond fraud has of Urban Cassavant et.al. has.Truly sick this gang is.
David Patch and his 'investigatethesec' naked short tout site is James Dale Davidson connected and that website appeared to replace NAANSS when Davidson was in SEC litigation although ex-SEC ATTORNEY NEVER CHARGED HIM FOR USING THE NAKED SHORT CLAIM TO DIVERT ATTENTION FROM HIS AND AGORA INC.S ILLEGAL PUMP AND DUMPS OF ENDOVASC AND GENEMAX.Brent Baker has since left the SEC AND HAS A CUSHY JOB WITH PATRICK BYRNE LYING ABOUT OVERSTOCK.COM BEING A VICTIM OF 'NAKED SHORT SELLING',COINCIDENTALLY - NOT !!.
Patch used to tout Genemax before moving over to the ragingbull jagh medai holdings board to tout that fraud for Gary Valinoti.
Byrne thinks he's a secret agent man.In truth he is a cheap petty penny stock con artist like the NCANS fraudsters he funds like he did Swift Boat Captains etc.James Dale Davidson's NAANSS OR NATONAL ASSOCIATION AGAINST NAKED SHORT SELLING WAS LOCATED IN THE SAME BLAINE,WASHINGTON OFFICE WHERE DAVIDSON'S GENEMAX FRAUD PUMP AND DUMP WAS LOCATED.SOME OF THE SHARES THEY DUMPED(WHILE FRAUDULENTLYY CRYING ABOUT BEING 'NAKED SHORTED)
WAS THROUGH LOM OF BERMUDA.
Probably Davidson's Beltway connections are why the SEC refuses to look at Davidson's LOM connections even though it is fact Genemax shares were dumped from there,probably through a Charles Schwab account among others.James DALE Davidson recommended LOM for offshore transactions in his scammy book,'The Sovereign Individual',written with the Lard William Rees-Mogg without disclosing his financial interests at the time.
Patrick Byrne and his daddy Jack funded a million dollar anti-John Edwards campaign and it appears allowing him to run stock scams is the Beltway's way of saying thanks.
Again Patrick Byrne is aiding and abetting massive penny stock fraud that extends to the UAE and Dubai where money laundering with unaudited penny stock shares is involved while the Bush administration erroneously claims money laundering no longer occurs.
James DALE Davidson has been involved with Amenni and Nannaco there and no doubt other scams.Bellador Group may be Davidson connected and they dumped unaudited Endovasc shares far and wide after Davidson did the first massive pump and dump through Agora Inc.'s 'Vantage Point',cyber and mail fraud tout publication. Both NAANSS and Agora and Davidson then claimed Endovasc was 'naked shorted'.After that Endovasc shares began being touted and dumped through Bellador Group of Kuala Lumpur and Dubai.
I have reason to suspect Bellador may have CIA connections and strangely they even promoted SRA International shares that the CIA's In-Q-Tel is invested in to Dubai clients although it is a national security stock with monopoly on 'IT' business in the Beltway.But nonetheless although the Hong Kong securities office warns its citizens about Bellador Group the U.S. SEC does nothing TO PROTECT ITS CITIZENS AND CONTINUES TO ALLOW THEM TO PUMP AND DUMP AND BOILER ROOM WORTHLESS U.S. PENNY STOCKS SCAMSTERS SUCH AS THE NCANS GANG PROMOTE AS VICTIMS OF 'NAKED SHORTING'.Sure.
Nearly every alias posting here is part of Byrne's NCANS fraud by he way.'Clogging' as they accuse others of doing is part of their modus operendi as well as getting critics removed from ragingbull and Yahoo message boards and or threatening their lives.
Check out Gary Weiss' blogspot that follows this fraudulent 'baloney' gang :
http://www.garyweiss.blogspot.com/
Also these indymedia links :
SEC Commissioner Christopher Cox vows to bring James Dale Guckert/Jeff Gannon to Justice ?
http://cvilleindymedia.org/newswire.php?story_id=1840
Senator Bennett :Is Patrick Byrne's NCANS a Fraud ?
http://cvilleindymedia.org/newswire.php?story_id=1840
Not saying you're wrong, but there's a lot of mud-slinging on these sites and not much actual dirt to be found.
If you are indeed a burnt investor in someone's phony penny stock scam then I feel for you, but I must admit anyone who acts upon an unsolicited piece of advice in a largely anonymous email about a penny stock really should take some of the blame for losing their money as it is all about playing on greed and it catches the greedy. And what if such a mail come out from Igora? They make money out of promoting stocks for other people (read their disclaimers at the bottom of the emails), but until you can show me the money trail that proves that they themselves were invoved it seems a big claim to say it is their felony). Also, there are plenty of stock-picking services whch lose money for their clients - hey I can do that without a stock letter - and you could claim that they ramp it for their own profit, but that's a risk that you'r going to run so once again you've got to
do due diligence on the newsletter publishers and the stock.
As a youngster I got caught up in a ramp up of a company which took in quite a number of the people within the Australian financial community, all based on heresay - but I realised I'd learnt my first major lesson in trading, and had suffered because I wasn't willing to due the due diligence that is required of any source of information).
So I guess what I'm saying is that for people reading your post, I'd suggest that before they jump to conclusions about what you've said they should actually verify some of the claims you have made. I couldn't find anything verifiable after digging around your sites.
I don't know Patrick Byrne from the next guy, and certainly therefore would not vouch for him, but I can't see how you can call a company turning over $439 million in revenue a penny stock that's been flogged, nor can I see why he would start making a whole lot of noise about scams to the world if he was conductinng them - it's the fastest way to attract attention to yourself. He may be a criminal mastermind, or he may just be diverting attention from his company's performance but it seems to be weird that he would do that if he was involved in those sort of deals.
He has made claims which are actually being investigated by the SEC, and not just for his company, and maked shorting does go on - so what if it isn't a massive occurrence - it is still illegal and should be stopped. He has made claims about his accounting, drawing attention to it, and that invites scrutiny and criticism, which is a strange thing to do if your a fraudster - and nor is running a profitless company a crime . Ther are other high-profile companies that have been going for similar lengths of time in this industry have failed to make any profits, so he's not exactly the poster boy for that.
And, another thing, doing a dutch auction instead of a standard IPO doesn't make any friends in Wall Street, and I can't see any major benefit in Byrne doing that other than for the reason he wanted to have a level playing field for the investors. On top of that, he may be conning us about Worldstock and maybe screwing the poor and whatever, but I can't see what major benefit he'd be getting out of spinning a story like that. Plenty of other US companies exploit workers around the world for profit, he could do so without inviting scrutiny by making those claims. He may actually be an idealist - you never know.
So if you do have a case, make it with a bit mor substance, and if you don't then get the juice before you do. Otherwise you put yourself in the same category as what you are acusing him of being.
Overstock has one of the lowest customer satisfaction scores. I only use them as a standard for what an item should cost. I suspect that when a problem arises it usually is because they don't have it anymore.
May I ask which type of item you purchased.
Clothes, furniture, cd's etc.?
- It's about time
- by cardinalbird2 March 7, 2006 11:23 AM PST
- I'm grateful for Patrick Byrne's courage to take on Wall Street. There is an insidious culture within the financial community that is every bit as tyrranical, secretive and paranoid as the Bush Administration. I wouldn't be surprised that, as the result of the impending lawsuit and SEC investigation, Congress creates legislation like the Sarbanes-Oxley Act of 2002 to address this problem. Afterall, it's always those folks who feel they're entitled to cross the line to enrich themselves at the expense of us honest chumps who inspire criminal laws.
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