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Overstock shares fade as CEO warns of 'drugs or dead body' caper
Mark Cuban now part of the fun
Away from the financial issues, Byrne has continued his pursuit of "a cabal" that he believes is out to destroy the Big O.
Byrne held an August conference call with financial analysts about this cabal that has since gone down in Wall Street history as perhaps the single most bizarre CEO moment of all time.
During the session, Byrne admitted to making up stories about being gay and a coke-head in the hopes of uncovering a mysterious group short-sellers led by a "Sith Lord." These individuals allegedly engineered an intricate conspiracy to cripple Overstock. Part of the conspiracy included tapping Byrne's phone calls and apparently some kind of spy ring. (You can read of the excerpts from the call here.)
During the more recent Bloomberg TV interview, Byrne again returned to these themes.
"I can tell you they are going to come after me in January," Byrne said. "They are trying to get the FCC (Federal Communications Commission) to launch an investigation. They are trying to get the DoJ (Department of Justice) to investigate me. Some of the officials are monsters. You'll probably read a headline that I was stopped with drugs or a dead body."
Part of this tirade included a jab at billionaire blogger Mark Cuban, who also owns the Dallas Mavericks basketball team. Cuban was mentioned during the interview as one person who has a short position on Overstock.
"Well, I - Mark's entitled to his opinion," Byrne said. "I think he lost money on that position since he put it on."
Bloomberg notified Cuban of these comments and asked for a response, which Cuban published on his blog in an entry titled, "This will make a good movie someday."
"Patrick byrne is a paranoid fool. I am short (Overstock.com) 20k shares," Cuban wrote. "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
"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."
Oddly, the Bloomberg transcript of Byrne's interview still has the Cuban comments and the references to dead bodies and drugs, but the actual video portion of the interview no longer contains the remarks. They have been replaced with frames of stock quotes.
For all his mistakes, Byrne comes off as an affable chap during interviews. His laidback approach and candid responses to questions are a refreshing change from the typical corporate babble. Byrne, however, doesn't seem to know when he's meant to be more serious.
For example, Sun's CEO Scott McNealy has made a career out of being controversial. McNealy throws out shocking quips, dresses in blue jeans and cracks jokes at every opportunity. In almost every case, McNealy's free-wheeling antics are aimed at a competitor. When talking about Sun's business or issues considered material to Sun's performance, McNealy takes on a much more serious tone.
Byrne keeps the antics going no matter what he's talking about, and this produces some very awkward situations.
The most recent example can be seen in the press release mentioned above that triggered a drop in Overstock's share price this week. Overstock admitted to slow sales, and Byrne justified higher than expected expenses as a long-term play. But he couldn't leave it there. Instead, the last paragraph of the press release again brings up the conspiracy theory stuff suggesting that Bloomberg cut away from Byrne's tirade against short-sellers as some kind of slight.
If you're an investor looking for a sign of hope that Byrne will change his behavior, don't hold your Big O too long. Given that Byrne's father John Byrne is the Chairman of Overstock, you can't expect much beyond a spanking and more of the same. ®