Deep Capture: exposing the crime of naked short selling » Take 5 With Patrick – Essays on Unrelated Subjects

Political Campaigns and Overstock

Patrick Byrne — Thu, 14 Feb 2008 03:48:33 +0000

We often receive political complaints at Overstock . I am posting this so that in the future, when customer service agents get harangued by people angry about statements they believe are being made by our decision to advertise certain places or carry certain products or sell certain books, music, or magazines, those agents can just send a link to this post.

During the 2004 election, we created a book page with books by Hillary and Bill Clinton on one side, and two books by Dick Morris criticizing them on the other side. On the left, another book by James Carvel (as I recall). On the right, one by Ann Coulter. All images were of the same size, and there were an equal number of them on each side.

We were inundated with complaints from the Left and the Right about featuring books from the other side. Go figure.

We hear from from Family Values folks about the movies and music we sell (even though we actually are quite conservative, selling, for example, Playboy, but not the steamy stuff).

When we advertised on AirAmerica, we got flack for it.

A few weeks ago we heard from the Ron Paul folks protesting our advertising on Fox, given his exclusion from a debate they covered. I wrote a letter to our customers about it, saying that while I happen to support Paul personally, I was not going to change our TV advertising to punish Fox. Then we heard from people angry that I had mentioned that I personally support Ron Paul.

Last week we heard from the Family Values folks protesting the TV shows on which we advertise.

This week we are hearing about the Hillary Clinton Nutcracker on our site.

I respectfully suggest that people should remember, Different strokes for different folks. It is not up to us to make statements with what products we do or do not carry or where we advertise them. Playboy is often our fastest selling magazine. The Hillary gadget was briefly one of our fastest selling items. We have about 1 million products, and I’m not going to police American tastes, beyond not selling hardcore or kiddie porn (like some other etailers), and firearms and ammunition and such.

There was one exception: when Rush made fun of Michael J. Fox, we yanked our advertising.

This is going to be a long and exciting campaign. I don’t recall anything like it since 1980. I hope the citizenry gets through it as friends.

Most respectfully,

Patrick

“On any other day, that might look strange.” – Nicholas Cage, Con Air

Patrick Byrne — Tue, 29 Jan 2008 18:45:10 +0000

From: Sam E. Antar [mailto:sam@whitecollarfraud.com]
Sent: Monday, January 28, 2008 7:22 PM
To: Patrick Byrne
Cc: israelk@sec.gov
Subject: Overstock.com Fourth Quarter Fiscal Year 2007 Earnings Call

Dear Mr. Byrne: This is in response to your email and post on the InvestorVillage Board (see below). At your third quarter fiscal year 2007 earnings conference call, you had asked if I was on the line and said that you would accept questions from me if I was on the conference call. If that statement at the last conference call was not intended to intentionally mislead your shareholders, I would expect that you would welcome my participation at Wednesday’s call on an equal footing with all other participants.It is highly irregular for a participant in a conference call to be singled out and limited to three questions posed in advance, each consisting of 25 words or less. I believe that such a condition would be at variance with the principles of free and full disclosure required by the securities laws at conference calls. You appear to be imposing conditions on me that are not imposed on other conference call participants. I will not accept special conditions that are not imposed on other participants in the conference call.Accordingly, I again request that I be permitted to participate in this conference call on an equal footing with all other participants.I await your response.Sincerly,

Sam Antar

Original email from Sam E. Antar to Patrick Byrne (CEO of Overstock.com): From: Sam E. Antar [mailto:sam@whitecollarfraud.com]
Sent: Monday, January 28, 2008 4:10 PM
To: ‘Patrick Byrne’
Cc: ‘Kevin Moon’; ‘Joseph Tabacco’; ‘Clay Corbus’
Subject: Overstock.com Earnings Call on 01/30/08Patrick Byrne:

Can I participate in Overstock.com’s earnings conference call scheduled for Wednesday, January 30, 2008 at 11:00 ET? Please let me know by tomorrow morning.

Regards,

Sam E. Antar

E-Mail: sam@whitecollarfraud.com

Web Site: www.whitecollarfraud.com

Blog: www.whitecollarfraud.blogspot.com

Patrick Byrne’s email response to Sam E. Antar

From: Patrick Byrne [mailto:PByrne@overstock.com]
Sent: Monday, January 28, 2008 7:21 PM
To: Sam E. Antar
Subject: RE: Overstock.com Earnings Call on 01/30/08

Sam,

http://www1.investorvillage.com/smbd.asp?mb=3532&mn=13943&pt=msg&mid=3984919

Peace baby.

Patrick

Patrick Byrne’s InvestorVillage message board post (under the alias Hannibal) linked to in Mr. Byrne’s email response above:

Dear Sam,

Sure, you are welcome to participate: please send me your top three questions (in the interest of avoinding your endless “Do you pick your toes in Poughkeepsie” rants, please limit them to 25 words each, and know that I will treat compound questions as multiple questions).You know my email (N.B. your email address for Clay is out-of-date).

Your friend,
Patrick

Integrity-Challenged Journalists Harm Children

Patrick Byrne — Thu, 10 Jan 2008 15:47:33 +0000

The Salt Lake Tribune again provides example of the harm being done to society by shoddy, agenda-ridden journalism.

In November, 2007 The Salt Lake Tribune published two articles by Lisa Schencker and Rebecca Walsh regarding education. Their work (especially Ms. Walsh’s) displayed such astonishing intellectual dishonesty that I, assuming the customary right to respond granted to those who figure prominently in such coverage, wrote a response. With characteristic integrity, The Salt Lake Tribune refused to publish it. Today, however, they published another article by Lisa Schenker which could have been titled, “Oops! We were wrong about everything we were fighting Byrne about.”

I will first provide easily verifiable data regarding Utah’s test scores by which we may substitute facts for their bromides and impressions. Then I will use this data to address Ms. Schencker’s misrepresentation of a recent education study (which was itself dubious). I will then turn to Ms. Walsh, who, when it comes to sheer intellectual duplicity, never lets us down. Last, I will return to today’s story, which thoroughly vitiates their earlier point of view.

First, the data. The United States and 29 other nations make up the 30 developed countries of the OECD, the set of countries that represent our competition in the global economy. How does the USA within the OECD? The Digest of Education Statistics, Table 399 , gives the answer: when tested in reading, math, science, and problem-solving skills, and where rank #1 = “the best,” our nation’s 15 year-olds rank #15, #24, #19, and #24, respectively, out of 30 countries. With an average rank of 20.5, the USA ranks in the bottom 1/3 of the 30 OECD countires.

How does Utah rank within the United States? The National Assessment of Education Progress (known as “The Nation’s Report Card” http://nces.ed.gov/nationsreportcard/nde/statecomp/ ) provides the tool by which one may judge. Here are Utah’s most recent test results in reading, writing, and math, ranked versus other states: #30, #34, and #31 (only in science do we show above-average #19). However, for historical and socio-economic reasons there are disparities in educational achievement by ethnicity, and one must control for that otherwise one ends up measuring ethnic composition more than achievement. When one does so, Utah slips substantially. For example, Utah’s white students rank 38th in math, 39th in writing and 41st in reading when compared with their peers in other states. That is, Utah’s white kids rank around the lowest 1/5 of their peers in this country, which is in the bottom 1/3 of the OECD. Unfortunately, Utah’s Latino and African-American children fare even worse: according to Utah State Office of Education, 42% drop-out without finishing a basic education.

With such data at hand, let us turn to the Tribune’s work.

Lisa Schencker’s November 18 piece (“Utah in Top 10 in Math and Science”) explored a then-recent American Institutes for Research study comparing the educational achievement of states within the US with the achievement of other countries. The study is flawed in that the set of countries to which it compares the United States omits 17 of 30 OECD countries, all of which score higher than we do. (Arguably it is also flawed in that it looks only to math and science scores, the latter of which is Utah’s one above-average score, but omits reading and writing, subjects in which Utah fares worse, and does nothing to control for ethnicity when ranking US state results.) What is shockingly disingenuous, however, is the Tribune’s claim that Utah is “top 10 in math and science”: it is only top 10 on a list of 46 countries which includes such educational luminaries as Saudi Arabia, Botswana, Tunisia, and Serbia, but which omits essentially all of our true international competition.

That is, yes, Utah is in the top #10, if we don’t count 17 out of 20 OECD countries and don’t count 40 out of 50 states and don’t consider subjects in which Utah has low scores. Ms. Schencker blithely buys this Procrustean Bed, but by this logic, I could claim to be a top 10 skier, as long as I am allowed to eliminate from consideration the tens of millions of people who ski better than I do, and eliminate the events in which I ski slowest.

When it comes to just not getting the joke, however, all honors are due Ms. Rebecca Walsh. She writes: “If Byrne had really put his money where his mouth was – with low-income and minority families frustrated with public schools – he could have paid for thousands of private school scholarships.” If Ms. Walsh were capable of performing that modicum of research one would expect of a sophomore journalism student she would learn that I do, in fact, support precisely such causes, paying for hundreds of scholarships for minority children in Utah as well as building 19 schools educating about 6,000 kids in Africa and Asia (and funded the DC voucher movement, which is now serving thousands of children). Why it is wrong to seek to provide choices for, not hundreds, but hundreds of thousands, Ms. Walsh leaves unaddressed.

Ms. Walsh notes the demands for apology that were spawned by a deceptively-edited statement of mine that appeared on You Tube: she neglects to mention that the demands for apology disappeared as soon as the complete statement was posted. In fact, I received numerous apologies from some who had previously demanded them, again, a fact Ms. Walsh could have discovered had she tried “research.”

Ms. Walsh notes that I feel so let down by our governor that I said I would back an opponent of Huntsman (“even a communist”) while neglecting to note that I also said, “That’s not going to happen. There is not going to be anybody who seriously threatens him… I like the guy, he’s a decent, he’s a lovely intelligent guy, I like him” but I could not support him again myself, given his abdication of what he led me to believe was a core principle.

http://www.kutv.com/content/news/politics/default.aspx?articleID=30196

Most significantly, Ms. Walsh apparently misunderstood my Tribune editorial asserting that Referendum #1 was not an IQ test but a sanity test (following Einstein’s dictum that insanity is doing the same thing over and over while expecting different results, which is what Utah committed itself to do by rejecting Referendum #1). It was not a retraction, it was an escalation. So that Ms. Walsh not waste any more ink on poorly aimed rejoinders, I’ll state it with total clarity: I wish neither to disrespect nor scold my adopted state, but I believe that Utah’s elimination of choice for low-income and minority kids was an utterly shameful act. Utahns who voted against Referendum #1 can save their breath criticisng my bluntness: I think they are the ones who should be ashamed of themselves. In fairness to Ms. Walsh, however, she may have been misled here by the Tribune’s decision to headline my editorial, “What I mistakenly called a statewide IQ test was actually an insanity test”: the insertion of the word “mistake” was a fabrication on the part of the Tribune, one that seems to have confused Ms. Walsh regarding the tone of my piece.

Curiously, Ms. Walsh made no discernible attempt to grapple with my arguments. Her one nod in that direction is her statement that I “gussied up [my] argument with statistics comparing Utah students’ test scores to those in other states, minority graduation rates and surging enrollment (sic).” Beyond its grammatical infelicities, it is hard to know what to make of this complaint. If including data in argument bothers Ms. Walsh perhaps she should have suggested an approach which avoids the minimal commitments to rational discourse and intellectual integrity she and the Salt Lake Tribune clearly find distasteful.

That was the set-up. Here is the punchline. Today, January 9, 2008, The Salt Lake Tribune ran a story whose headline read, Utah’s overall school quality grades put it near bottom nationally. The story accurately describes precisely what Ms. Schenker could have herself ascertained months ago.

What damage is done to society by journalists so supercilious they can rationalize distorting the news as heavily as these folks did in November? Do they simply think that they they can obfuscate the public discourse to steer the polity to decisions about which they, the anointed, know best? What damage did it do when they misled a state that “ranks among the bottom eight states in the nation when it comes to education” (in a nation that ranks near the bottom of industrial countries) into thinking that it was “Top 10 in Math and Science”?

I am given to understand that many Utah got angry at me for my comments about “a statewide IQ/insanity test.” I am indifferent to it, but I do think their anger is misplaced.

Another leaf turns over: the Wikipedia connection

Patrick Byrne — Tue, 04 Dec 2007 02:03:58 +0000

Posted: Mon Dec 03, 2007 7:03 pm
Post subject: Another leaf turns over: the Wikipedia connection

http://www.theregister.co.uk/2007/12/04/wikipedia_secret_mailing/

Did something just hit a fan?

Voucher Webcast Information

Patrick Byrne — Tue, 06 Nov 2007 00:38:02 +0000

Posted: Mon Nov 05, 2007 5:38 pm
Post subject: Voucher webcast tonight – call in!

Hey Sports Fans,

Utah has passed a pro-freedom law providing vouchers for kids to attend schools of their choice. It is heavily slanted towards poor kids, who get $3,000 (versus the $500 that children of families earning over $100k will receive). ( http://www.youtube.com/watch?v=4tpVnenIpSU )Even in Utah there are, regrettably, people who are against freedom. They have a referendum on tomorrow’s ballot to prevent this law from going into effect. I have been going around the state debating the anti-freedom teams. Tonight I am doing a conference call at 9 PM Mountain Time. Please feel free to call in and listen or ask questions. Even more importantly, find the phone numbers of 5-10 folks you know and call them tomorrow and persuade them to go out and vote for Utah’s Referendum #1 tomorrow.Even the miscreants must understand the situation with education in this country. Those guys are venal, but not stupid. So I invite even them to show some class and help out here.

Patrick

Q&A regarding Referendum 1

Dr. Patrick M. Byrne
Chairman & CEO, Overstock.com

To ask a question, dial (800) 510-9661
The passcode is 910 38 485

Deep Capture: The Movie

Patrick Byrne — Fri, 02 Nov 2007 20:19:32 +0000

Posted: Fri Nov 02, 2007 1:19 pm
Post subject: DEEP CAPTURE: THE MOVIE

Hey Friends.Two years ago I began a campaign to expose a massive circle of corruption on Wall Street involving something called “naked short selling.” The financial press, which had previously been quite generous towards me, immediately began devoting a tremendous amount of energy to misrepresenting, dismissing, and downplaying my allegations. It began to seem as though they were taking part in a cover-up, especially given that I simultaneously became persona non gratis on Wall Street, so that the entire discourse about whether or not I was right went forward with precisely one person precluded from taking part: me. The lengths to which this cover-up was prosecuted astonished even me: for example, last year a large conference (”Value Investors’ Congress”) invited me to speak, but some powerful hedge funds threatened to boycott if I were allowed to tell me side of the story, and the invitation was rescinded.Times are changing, however, and a few weeks ago I was invited to speak to an even bigger conference of hedge funds. I did so, and was finally able to connect the dots for the public. Please view this by clicking the red button above, and, if you like it, send the link to a dozen friends (or better yet, post links elsewhere on the Internet to this page and www.deepcapturethemovie.com).

Respect,
Patrick M. Byrne
Concerned Citizen

Education, Teachers’ Unions, and the NAACP

Patrick Byrne — Sun, 28 Oct 2007 22:17:00 +0000

Posted: Sun Oct 28, 2007 3:17 pm Post subject: Education, Minorities, Teachers’ Unions, and the NAACP

SEE THE CLIP ON YOU TUBE: http://www.youtube.com/watch?v=4tpVnenIpSU Dear Customer, The NAACP is demanding an apology from me. I must respectfully refuse. Since this is making national headlines, I write to explain what is going on.Overstock is based in Utah, where 42% of minority children fail to graduate from high school: this is a calamity of epic proportions. In the last few years I have sought to use such resources as Overstock’s success provide me to pay for the education of hundreds of low-income and minority children in Utah, where many private schools have tuitions ranging from $2,500 to $3,800. (I also built 19 schools and orphanages in Afghanistan, Nepal, and in Africa and South America, schools that now educate 6,000 kids, mostly female: all these schools are named after my Mom). Recently I appeared on TV to criticize the Utah system for failing 42% of minority kids. My argument is that in a global economy people compete on the skill sets they acquire in school. Accepting the current situation is like saying that we as a society are OK with discarding 42% of minority kids, wasting their lives like one would burn a pile of leaves (incidentally, I purposefully choose such horrific images in order to cut through the polite euphemisms by which some assuage their guilt over the current situation). Indeed, I have been supporting a new Utah law that will allow such low-income children to receive grants of $3,000 towards tuition in private schools (the law, which provides grants of only $500 to children of higher-income families, is designed to serve the interests of lower income children). Nationally, between 57% and 77% of Hispanic and African-Americans support such programs: the numbers are even higher when considering just those minority families with children of school age years. http://www.friedmanfoundation.org/friedman/schoolchoice/ShowFaq.do#faq_14 Teachers’ unions are against letting poor children get a better education outside of the current system. They are defending their guild, which is to say, the status quo, which is to say, in this case, a system that currently destroys the prospects of 42% of Utah’s minority kids. In a fine display of the intellectual integrity that marks their arguments, they are attacking an excerpt from that recent appearance I made, carefully edited to make it seem like I was endorsing the act of throwing such kids away rather than decrying the system which permits it. It apparently is convincing to no one, as 100% of the dozens of letters I have received (many from people who identify themselves as minorities) make clear they support and understand what I said, even through the deceptive editing. Even journalists writing about it are exposing the mendacity of this campaign. http://www.sltrib.com/ci_7292445 Unfortunately, this is an issue where the NAACP’s ties with the teachers’ union leaves it at odds with the wishes of the great majority of African American and Hispanic families. Last Friday the Utah Chapter of the NAACP held a joint press conference with the teachers’ union, which apparently had misled the NAACP by not even providing them my statement, unedited. Based on a review of this, the NAACP has demanded an apology from me. I refuse. I have long respected the NAACP, but their moral authority is their brand, and I believe they are squandering that moral authority by staking out a position based on so deceptive a tactic as the one to which this union has resorted, and more generally, by being so joined-at-the-hip to this union that they would oppose a law which is supported by a strong majority of Black and Hispanic families and whose benefits are overwhelmingly directed to their children. The statistics we read about drop-out rates are, in fact, statistics about lives shredded: if my language be gruff, it is because I want Americans to see what is at the tip of their newspaper spoon. In my view, the ones who owe an apology are those who accept and defend a status quo which is squandering the prospects of 42% of Utah’s minority kids. Respectfully, Patrick M. Byrne CEO, Overstock.com

Our Corrupt Federal Regulator the SEC

Patrick Byrne — Fri, 10 Aug 2007 18:25:30 +0000

Posted: Fri Aug 10, 2007 11:25 am Post subject: Our Corrupt Federal Regulator the SEC

Dear Reader,Two years ago I became convinced we were standing at the edge of an economic crisis perhaps comparable to the 1929 market collapse, due primarily to the SEC having become a “captured regulator” which turned a blind eye to the fraud it was created to suppress. The proximate cause of systemic failure, I argued, was that our financial system was building up latent derivative risk (in the form of unsettled trades in our settlement system) among a vast network of hedge funds and their prime brokers. But the conditions for collapse were created, I argued, by an indolent SEC.In an attempt to force action before there was a systemic crisis, I tried to open the eyes of the financial media to these conditions, and drew nothing but vilification that was, in the words of one professional media observer, “like nothing we’ve seen in America since the 19th century.” They uniformly refused to report on the substance of my claims, instead stretching (often quite ridiculously) to portray it all as just a CEO ticked about his own stock price. I organized a fairly extensive effort to bring relevant information to those senators who provide political oversight to the SEC, but was stymied in these efforts by Senator Richard Shelby of Alabama, a politician known in DC for his penchant for milking maximal dollars from all sides of every issue, then voting for whatever serves the interests of Wall Street (even at the obvious and profound expense of the citizenry). In a somewhat desperate measure, I encouraged legislation at the state level: reformist legislation passed the Utah legislature almost unanimously, but was then blocked by Wall Street through a series of threats, legal action, and (I am informed) cash dispensed to some state legislators who obediently flip-flopped.Through these efforts the SEC was not only 0 help, they actually aided those whom I was hoping to expose before a systemic meltdown became inevitable. SEC Commission Annette Nazareth, who has a vested interest (through marriage) in continuing the cover-up, was quoted as being dismissive of my claims (though they were already supported by hard, uncontestable data, much of it in published economic research). SEC Commission Campos also personally opposed me, telling an associate of mine in a public forum, “Imperfect regulation does not justify vigilantism by Patrick Byrne or Overstock.com” (actually it does, when the stakes are as high as they are proving to be, the form of the “imperfection” is corruption, and the “vigilantism” is simply exposure). I pushed hard on the SEC, even writing and narrating a presentation that explains the situation in fair detail, and which has been downloaded 500,000 times, but drew no response from the SEC beyond becoming the target of their federal investigation.One man came forward to support my claims: former SEC investigator Gary Aguirre. Recognizing that the Senate’s oversight of the SEC was fundamentally broken, he went to the Senate Judiciary Committee, sending letters that supported my view of rampant fraud within Wall Street protected by a co-opted regulator (and, it turns out, delivering boxes of evidence in support of these contentions). Naturally, the same journalists who had obediently clogged, cluttered, distorted and dismissed my claims, also went to work on Aguirre. Both The New York Times and The Wall Street Journal published articles and editorials so derogatory, inaccurate, and insulting about Mr. Aguirre, that when the smoke clears they will stand for ages as examples of yellow journalism at its worst, and the costs it can impose on our society. However, in the Senate Judiciary Committee the irresistible forces of fraud and money met the immovable objects of Senators Grassley and Specter. They held hearings and dug into Aguirre’s claims. In an unbelievable display of hubris, the SEC had the gall to subpoena the United States Senate Judiciary Committee, which told them to get stuffed: Senator Grassley’s two letters (since made public) lecturing the SEC on the meaning of “congressional oversight” within the framework of the US Constitution are remarkable both in content and in the simple fact of their necessity. Senators Grassley (from Iowa) and Specter (a former prosecutor) refused to be bullied, and instigated an investigation by the Government Accounting Office.

Seven months ago the wig began to slip. The GAO issued a preliminary report that confirmed “the whiff of a cover-up,” as Senator Specter summarized it in January. Last Friday, the Senate Judiciary Committee and General Accounting Office released their final report thoroughly vindicating Gary Aguirre (and in the process, my own long-standing criticisms of the SEC). It makes it clear that those on Wall Street with “juice” (as one higher-up called it while killing an investigtion) are considered untouchable by our regulators, who turn out to be negotiating for $1 million jobs with the same firms for whom they are derailing investigations. The report excoriates the SEC’s Office of the Inspector General (OIG) in particular as having taken part in the corruption and cover-up.

This week, SEC Inspector General Walter Stachnik (who has held that position since the SEC OIG was created in 1989), announced his retirement. Commissioner Roel Campos followed suit and, according to today’s newspapers, Commission Annette Nazareth is leaving soon as well.

When a corrupt Sheriff turns a blind eye to thuggery from his patrons, self-defense is justified but not obligatory. However, when that sheriff’s indolence leaves not just oneself but also innocent strangers to be mugged by the bullies, a civilized person takes it as his duty to get up in their grills. The corrupt sheriff will naturally denounce as “vigilantism” this decision by another to do that job for which he, the sheriff, is paid, but at which he is so abjectly failing.

When the Securities and Exchange Commission was created in 1934, it was given the daunting mandate of restoring investor confidence in what was left of America’s battered capital markets. In recent years they and the New York financial media have degenerated into cronies of Wall Street. As a result, our global financial system is now teetering on precisely the kind of systemic event of which I have been warning, brought about by precisely the kind of deep, latent derivative risk we were told could not exist, but which came to exist under the noses of the See-No-Evil Twins of the SEC and the New York Financial Media. Sadly, I predict that in the weeks and months to come we’ll learn that Aguirre was just the footnote to what has been covered up. And, regrettably, our nation will suffer deeply for it.

Most respectfully,

Patrick M. Byrne

PS Regarding the federal investigation: I have no beef with it, actually. Everything I have done has always been legal and ethical, but I do recognize that my actions have been somewhat irregular and, coloring outside the lines as far as I have, I do not begrudge the attention I have received from the Federals. In addition, I have no desire to express disrespect for, nor hurt the feelings of, those hundreds of honest, hard-working government employees who come to work each day wanting to do a good job regulating the capital markets. I simply think that a fair share of their bosses, the brass at the SEC, have been corrupted in one way or another. The departure of the OIG, and especially Annette Nazareth, is a first step in fixing this most vital of regulatory bodies.

PPS In all fairness I should exclude a small number of the Wall Street financial media from the charge of being hand-puppets for financial elites. Barron’s is nothing but marketing literature for about 8 hedge funds, the Wall Street Journal is to Wall Street as Sports Illustrated is to sports, Fortune is People Magazine for capitalists, and The New York Post is for folks who move their lips when they read People Magazine. But the same New York Times which employs Establishment-defending hacks like Floyd Norris and Joe Nocera also employs Gretchen Morgenson, who has integrity. Forbes reporters doing highly-credible jobs on these and related issues include Liz Moyer and Nathan Vardi, while Bloomberg has explored it through the superb investigative stories of Bob Drummond, and broadcast a shocking 25 minute Bloomberg Special Report by Gary Matsumoto. In addition, PBS gave fair treatment to Aguirre. In the same vein, I believe there are honest SEC Commissions (e.g., Cox and Atkins), and that the rank-and-file of the SEC are straight-shooters as well: it is the upper echelons that have lost track of for whom they work. In short, these systems are not monolithic.

PPPS TO GET YOUR COUPON please click here. It will take you to Overstock. When you checkout you will find the coupon deducted from your order. The coupon expires on Monday, August 13, 2007. It will take 10% off (not applicable to Entertainment products, and limited to $250 of benefit, so do not buy more than $2,500 with it!) If you have more than one coupon in your account, our checkout process will apply the one that gives you the biggest discount on the order.Last edited by patrickbyrne on Tue Sep 18, 2007 11:14 am; edited 33 times in total

Posted: Fri Aug 10, 2007 12:25 pm Post subject:

patrick, didja really write this letter ripping the SEC & then give em an overstock coupon? ROFL! i gotta admire yer gumption! wonder if any of em used it? btw, the SEC couldn’t deserve it more. (the ripping, not the coupon.)

Posted: Fri Aug 10, 2007 1:52 pm Post subject:

Yes, ’twas I.

Posted: Sat Aug 11, 2007 7:19 am Post subject:

Hello Patrick,I admire your persistence in the fight against this corruption. I think I have an idea what this is costing you, and the dangers you are facing. Wickedness in high places….I have a question for you:Have you considered hiring a weekend auction employee to man a fraud hot line? I usually don’t go looking for it but report it when I happen to see it.I spent a few minutes this morning and found 2 persons that keep coming back here with new user names. One of them has used the same name over and over and just adds a couple of numbers to the end of the name to change it. Another usually “sells” computers and in his listing he asks people to email him for off-site transactions. Yesterday I saw about 30 counterfeit handbags by a new user that have been listed for over 3 days already.I think the Content Review team does a wonderful job. I can only imagine how busy they must be.Thanks for your time, Silvia

Posted: Sat Aug 11, 2007 5:11 pm Post subject:

I’m so impressed! The counterfeit handbag auctions are still up but the other 2 have been disabled.Way to go, Content Review team!

Posted: Sat Aug 11, 2007 8:08 pm Post subject:

Quote:

Yesterday I saw about 30 counterfeit handbags by a new user that have been listed for over 3 days already.

Quote:

I’m so impressed! The counterfeit handbag auctions are still up but the other 2 have been disabled.

Yes they are and I am fairly certain that they will run till the end of their auction time. What a shame!!

Posted: Mon Aug 13, 2007 7:46 am Post subject:

Great article – I’ve thought something was fishy for some time now – thanks for expressing it so well!

Posted: Mon Aug 13, 2007 8:17 am Post subject:

Nandupuy,Thanks for reading it.Best,Patrick

Posted: Mon Aug 13, 2007 9:39 am Post subject: Thanks!!

First time reader - So glad the opportunity to read this was posted on my e-mail “flyer”. Otherwise I’d have never gotten this article and opportunity to learn the details of this. Have sent it to about everyone I know who is actively watching/working investments . . . thanks for educating an amateur!

Posted: Mon Aug 13, 2007 12:21 pm Post subject:

I want to thank you for a eye opening, thought provoking article! I am going to forward this to everyone I know. Wish it could be on the home page of every internet provider for more people to read!!

Posted: Mon Aug 13, 2007 7:52 pm Post subject: THANKS!!!!!!!!!!!!!

Thank you Patrick. You’re a very intelligent man. I’m glad somebody is keeping an eye on those thugs and thieves.

Posted: Mon Aug 13, 2007 8:27 pm Post subject: Wow

Thank you for this information. I got a finance degree back in 1988 but went straight on to law school and never used it… now I wish I had kept up with the markets over the years so I would know more of the background information. I am shocked and appalled by all of this. The corruption is real, isn’t it?? How long until our culture falls into abject decay?

Posted: Mon Aug 13, 2007 10:14 pm Post subject:

Valerie,I am afraid we may be reaching that point already.Thanks to all of you for taking the time to read this.Patrick

Posted: Mon Aug 13, 2007 10:14 pm Post subject:

PS Stay tuned. More to come.

A $10 coupon for my friends

Patrick Byrne — Sat, 28 Jul 2007 21:04:14 +0000

Posted: Sat Jul 28, 2007 2:04 pm Post subject: A $10 coupon for my friends

Hi Folks.It occurs to me that I have asked much of those who come here: to provide me feedback on business ideas, to understand patiently as we work through different business problems, to provide witness to the perfidy of various journalists, and ultimately, to get involved in comprehending a complex financial crime on Wall Street.That is a lot for me to ask of thousands of folks whom I have never met. As Don Corleone put it, “Let’s just say, ‘I owe you.’”As a small token of my appreciation, I have created a discount coupon that takes $10 off any purchase > $100 on our shopping site. Just in case it gets out of hand (as happened to me when I posted an offer on someone else’s blog a month ago), I have set the coupon to expire on Monday evening, July 30, to limit the damage I can do to Overstock’s budget for such promotions. By the way, I am not imagining myself a munificent Santa Claus here: I am just trying to do a nice thing for folks who visit. Feel free to post a link to this page anywhere else around the Internet (I know there are sites and blogs devoted to searching for shopping specials and various deals). However, if you folks seem to like this, I will make a habit if including these coupons in my blogs. In any case, here goes nothing: If you want the $10 off $100 coupon, good until Monday night, please click here. Your most humble servant, Patrick UPDATE: For those to whom this is new, to use the coupon you just click on the link above. It takes you to Overstock, you shop, and then when you checkout you will find the coupon deducted from your order. If you have more than one coupon in your account, our checkout process will apply the one that gives you the biggest discount on the order. So for example, if you are a Club O member you receive a 5% discount. If you order $105 worth of stuff, this coupon will drop it to $95. If you order $300 worth of stuff, you will get a $300 X 5% = $15 discount.Last edited by patrickbyrne on Sat Jul 28, 2007 8:05 pm; edited 3 times in total

Posted: Mon Aug 27, 2007 7:42 am Post subject: Signatures and delays

Wings,Yes, I did forget to sign it. You’re right.”Somebody call somebody!” – Panicking helicopter cop’s line at the end of the movie, “7″. By the way, I put that notice up of the show about my friend because the producer called that day to say it was going to be on. Evidently it got bumped. She wrote me this weekend: “There was a scheduling change at ESPN because of a WNBA game so the new air date is Friday the 31st at 7:30pm (ET) on ESPN2.” So I hope you tune in this Friday. Patrick PS There is a profound irony in the fact of its being bumped for a WNBA game. Somewhere, good-naturedly, Brian is laughing until tears roll down his face. As was his style.

Carol Remond

Patrick Byrne — Wed, 25 Jul 2007 18:55:33 +0000

Posted: Wed Jul 25, 2007 11:55 am Post subject: Hello Carol Remond!

Dear Carol,

We have not heard back from you, so I am writing to make clear that I would be most happy to provide comment or answer any questions that you have. Given our history, I think it best that you provide them to me in email form. I will respond within 60 minutes. Anything that is on the record for me must be on the record for you as well, but I will accommodate any reasonable request regarding delaying my publication, so please indicate to me your preference regarding the timing of my release of the article. Respectfully,

Patrick M. Byrne

Question for Brad Stone of the New York Times

Patrick Byrne — Mon, 23 Jul 2007 05:12:35 +0000

Posted: Sun Jul 22, 2007 10:12 pm Post subject: Question for Brad Stone of the New York Times

Hello Brad,Your recent article stated, “Patrick M. Byrne, founder and chief executive of the beleaguered online retailer Overstock.com, has for years been accused of anonymously resorting to the Internet to do battle with his company’s critics. In an interview, Mr. Byrne said that he never hides his true identity and always signs his name when he posts under his online handle, ‘Hannibal’ (the Carthaginian conqueror, not the celluloid serial killer).”Please tell me on what basis you make the claims:1)”Patrick M. Byrne, founder and chief executive of the beleaguered online retailer Overstock.com, has for years been accused of anonymously resorting to the Internet to do battle with his company’s critics.” That is, I understand many have criticized my appearance on the Internet, but I am not aware of having been “for years …accused of anonymously resorting to the Internet to do battle with [my] critics.” Please provide a citation for such accusations.2) Please provide a citation for this claim: “Mr. Byrne said that he never hides his true identity and always signs his name when he posts under his online handle, ‘Hannibal’”. Is it your claim that I used the words “always” and “never” in some message board post (and if so, please cite that post), or is it your claim that I stated this in our interview? I know for a fact that the claim is false as regards our interview, and believe it to be false with regard to any online posting, but I stand ready to be corrected.Respectfully, Patrick M. Byrne

Posted: Sun Jul 22, 2007 10:24 pm Post subject: Sent to public@nytimes.com

Dear Sir or Madam,In your July 16 article, “July 16, 2007 – The Hand That Controls the Sock Puppet Could Get Slapped” your reporter made a claim that was false. In addition, he had to go way out of his way to make it.Since you have not previously even responded to my requests for citation, I decided simply to make this one public.Explanation welcome.Patrick Byrne, CEO, Overstock.comHello Brad,

Your recent article stated, “Patrick M. Byrne, founder and chief executive of the beleaguered online retailer Overstock.com, has for years been accused of anonymously resorting to the Internet to do battle with his company’s critics. In an interview, Mr. Byrne said that he never hides his true identity and always signs his name when he posts under his online handle, ‘Hannibal’ (the Carthaginian conqueror, not the celluloid serial killer).”

Please tell me on what basis you make the claims:

1)”Patrick M. Byrne, founder and chief executive of the beleaguered online retailer Overstock.com, has for years been accused of anonymously resorting to the Internet to do battle with his company’s critics.” That is, I understand many have criticized my appearance on the Internet, but I am not aware of having been “for years …accused of anonymously resorting to the Internet to do battle with [my] critics.” Please provide a citation for such accusations.

2) Please provide a citation for this claim: “Mr. Byrne said that he never hides his true identity and always signs his name when he posts under his online handle, ‘Hannibal’”. Is it your claim that I used the words “always” and “never” in some message board post (and if so, please cite that post), or is it your claim that I stated this in our interview? I know for a fact that the claim is false as regards our interview, and believe it to be false with regard to any online posting, but I stand ready to be corrected.

Respectfully,
Patrick M. Byrne

Posted: Tue Jul 24, 2007 12:07 pm Post subject: Parsing The New York Times

Mr. Wings,I applaud your comment, in that your use of language is more crisp and precise than is Mr. Stone’s….”it is essentially saying that you don’t hide your true identity when posting online.”"…your postings are made in such a way that people will always know it was you in particular who made the posting and that your ‘handle’ is usually ‘Hannibal’…”Both of these are precise and accurate statements about what I do and how I describe what I do. I feel Mr. Stone stretched this to suggest that I made a further claim about “always sign[ing]” as “Hannibal”, a claim that (had I made it) would false and easily demonstrated as false, if I made it, which I didn’t. Mr. Stone’s inexactitude did, however, open the floodgates of pettifoggery, obfuscation, anf falsification so enjoyed by the shills.I have a modest history with The New York Times. I have, with their permission, taped conversations with their reporters which other nationally known journalists later listened to and said things like, “This makes me ashamed to be a journalist”). Mr. Stone’s decision to push this quote (or since it’s not even a quote, to push his description of my position) on precisely the issue that is the focus of attention, to create precisely the opening that blackguards were seeking, is hard to consider a coincidence, for if it is, it is one of those “coincidences” that happens over and over with clockwork-like regularity and complete predictability.Thank you for your helpful comment, Wings. I trust you understand why, given the situation, it was best not, in fact, to leave this alone, but to parse these claims as carefully as I have, and I thank you for your contribution to this effort.

Respect,

Patrick

PS You also wrote, “I may be mistaken on this part, you may of said your handle was always Hannibal…” That is correct: to the extent I have ever used a handle, it was always “Hannibal” or some cognate thereof (”Hannibal100″ on Fool, I think).

Posted: Tue Jul 24, 2007 6:01 pm Post subject:

I’m sorry but I am having trouble equating this text from the article

Quote:

In an interview, Mr. Byrne said that he never hides his true identity and always signs his name when he posts under his online handle, ‘Hannibal’ (the Carthaginian conqueror, not the celluloid serial killer).

with your responce to me here of

Quote:

stretched this to suggest that I made a further claim about “always sign[ing]” as “Hannibal”,

To me, the article is not implying that you always sign as Hannibal but just that you always sign your “name” and that your handle (bulletin board ID, etc) is always Hannibal. Yes, I remember now that you had mentioned the Hannibal100. Ofcourse you may have found yourself unable to get Hannibal as a user ID at various boards in the past and are just as likely to not be able to get it in the future (Hannibal is a significant historical figure and unfortunately the screen persona is popular for reasons that probably should be left unsaid). I’m not sure anyone would find a problem in seeing you sign a posting somewhere as Patrick Bryne (Mr. Bryne, P. Bryne, etc.) of Overstock with a user ID of Hannibal2000.Perhaps here the problem should be considered to be what was left open? Whereas you always sign your postings when using the ID of Hannibal, possibly you don’t let anyone know who you are when you use an ID that is not Hannibal? This leads back to the earlier (false?) statement of

Quote:

has for years been accused of anonymously resorting to the Internet to do battle with his company’s critics.

It’s a pretty sneaky way of implying that you have been posting anonymously but one that is not too likely to be picked up on by most people.The English language certainly has some problems with it at times and can be used to distort most anything. Having gone through a divorce I certainly know how hard it is to answer a question that has been phrased in the manor of “So, when did you stop beating your wife?” The implied statement is that you beat your wife and there is nearly no way to answer this question and be believed that you have never beat your wife. Apparently journalist are not the only professionals to distort things in a statement. Unfortunately, I feel that your specific response to this editor may have left in the realm of having failed on this one by going after the wrong problem. In essence, you may of answered that you stopped beating your wife, not have never beat your wife.

Posted: Mon Jul 23, 2007 7:03 pm Post subject:

Mr. Byrne,

Quote:

Mr. Byrne said that he never hides his true identity and always signs his name when he posts under his online handle, ‘Hannibal’”

I’m sorry but I’m having trouble understanding the problem you are having with this particular part of the article. Yes, it probably isn’t the best use of the English language in a sentence but it is essentially saying that you don’t hide your true identity when posting online. My thought would be that you would be complaining about it’s specific of saying you always sign your name and always use the same “handle” Hannibal (although I’m not even sure if is to your advantage to bother to correct this). Seems to me that I read here somewhere what it was that you sent to this person and it was along the lines of saying your postings are made in such a way that people will always know it was you in particular who made the posting and that your “handle” is usually “Hannibal” (I may be mistaken on this part, you may of said your handle was always Hannibal).I’m fully in favor of what you are doing concerning the stock market and applaud you for it. But I am wondering if I am missing some nuance here or if maybe this should not of been something for you to complain about? Sometimes, some things are just best left alone.

Posted: Tue Jul 24, 2007 10:19 pm Post subject: Philadelphia Lawyers and Child Threateners

Hi Wings,Thanks for taking the time to write such thoughtful analysis. I think we are close to agreement. I will reply by starting with something you wrote:”Yes, it probably isn’t the best use of the English language in a sentence but it is essentially saying that you don’t hide your true identity when posting online.”I will say three things about this, at least two of which we agree on.1) I agree Mr. Stone’s English on this key point was not terribly precise. No worries, no blood no foul, Mr. Stone.2) I agree that your reading is, in fact the natural reading. And, for the record, I will go further and confirm the truth of the assertion as you read it: I do not hide and have never hidden my true identify when posting online.3) Where we differ is in how we view the importance of Mr. Stone’s lack of precision. The miscreants jumped on it and immediately began counting times I had signed “Patrick” versus “Patrick Byrne” versus “Hannibal” in some weird (and to me still inexplicable) attempt to find an inconsistency. I thus insisted on clarifying the Stone’s imprecise statement. Tonight one of the knuckleheads is back taking my effort to restate precisely what Stone said, and falsely claiming that it was an “admission” (”Byrne admits that he posted on the Internet under anonymous pseudonyms”): I doubt anyone will fall for it, since he neither actually cites such an admission nor gives an example of it, though it be the main claim of his blog. Which is pretty funny and wholly typical. So in short, Wings, your reading is correct. Stone’s English does have only a small imprecision in it. Because the blackguards think they’re Philadelphia lawyers they jumped up and down in the space Stone’s imprecision created, and when I went to seal it up, they used that as an opportunity simply to reverse their allegation. So for the record, for any stranger, or reporter, who wanders in here: I have, in fact, never hid my identify when posting online. I have always posted as myself, or as Hannibal. I have only used the name “Hannibal” at Fool, InvestorVillage, and Overstock itself, after extensively making it clear that Hannibal was I. I have posted on other people’s blogs a few times, generally consumer information and shopping blogs, but always identifying myself. The only possible exception to the preceding statements is this: in 1999-2000, I posted as Hannibal a few times on F—-ed company.com, looking for inventory to liquidate, and while I think I did reveal my identity there, it hardly mattered anyway because we were a tiny upstart of whom almost no one had ever heard, and I do not have a record of those posts. One would think that would be as simple and clear an assertion no one could misread it. Let’s watch. By the way, thank you for taking the time to tease this analysis out, Wings. Send me an email and I’ll hook you up with a coupon. Respectfully, Patrick PS As long as we are talking about these guys, I’ll give you a taste of who they really are. The other day one of the blackguards threatened me and a friend by posting our personal information on the Internet (and in the case of my friend, that of his wife and children as well). Personally I am indifferent because I am 10 feet tall, bulletproof and invisible, but I don’t think blackguards should be threatening children. Who did the threatening? A fellow named Sam Antar, a convicted felon who reduced his own time in jail by ratting on family members. Some guy. What does he do when he is not threatening children? He goes on CNBC to be fetted by the likes of Herb Greenberg. This may seem strange until you start to get what is going on down the rabbit hole: CNBC (and much of our financial news industry, for that matter) is more or less a 24 hour infomercial where Herb & Cronies hawk whatever cookware sets, Total Gyms, or stock and bonds they are instructed to hawk by a few hedge funds. But the cronies are growing silent because they are starting to realize the game is up. Herb is in too deep to stop, so he has been tasked with creating another crony with whom he can then quote back-and-forth. They cannot even find a Chanos to make denials (given how shifty Chanos looked in the recent Bloomberg expose on naked shorting http://images.overstock.com/f/102/3117/8h/www.overstock.com/07-0313Bloom_PhantomShares_NSS.wmv). So they are having to dig pretty deep, and the best they could do is come up with a convicted felon, relative-ratting, and now, child-threatening, Sam Antar.

Posted: Tue Jul 24, 2007 11:04 pm Post subject:

Patrick,I don’t mean to interrupt this thread, but, there is a serious situation on the message forums right now. A user, mistuff4yu, has been posting ALL day with the worst kind of filth and foul language you can imagine. He has been reported over and over again, all day, and is still on the boards with more of the same filth! Any customers that may come to the message forums would be horrified. It’s bad enough for the sellers to have to deal with it, but, where is the moderator for the forums? Back when Byron was handling it, it would have been dealt with swiftly. Please contact your people and tell them to get the user totally banned and wipe those posts out. It’s an abomination for anyone to see them. Thank you and again, sorry for interrupting your thread but no response from the techs in charge.Myra

Posted: Tue Jul 24, 2007 11:47 pm Post subject: Myra

Myra,On it. Will be taken care of tonight or first thing in morning.So sorry.Patrick

Posted: Wed Jul 25, 2007 4:55 pm Post subject:

Quote:

The miscreants jumped on it and immediately began counting times I had signed “Patrick” versus “Patrick Byrne” versus “Hannibal” in some weird (and to me still inexplicable) attempt to find an inconsistency.

Sounds like some people need to “get a life”. But ofcourse this seems to be the life they decided to get.I guess I now have a better understanding of the particular aspect that you chose to address. Who in their right mind would really care if in one post you signed Patrick Byrne CEO of Overstock and in a different post you signed Mr. Byrne of the Overstock Corporation? Obviously you have more problems with these people then I had thought.You may still wish to consider addressing on a more specific basis the point I had made

Quote:

Perhaps here the problem should be considered to be what was left open? Whereas you always sign your postings when using the ID of Hannibal, possibly you don’t let anyone know who you are when you use an ID that is not Hannibal? This leads back to the earlier (false?) statement of

Quote:

has for years been accused of anonymously resorting to the Internet to do battle with his company’s critics.

Quote:

It’s a pretty sneaky way of implying that you have been posting anonymously but one that is not too likely to be picked up on by most people.

Ofcourse with them saying that you have ‘admited’ having made postings on the Internet under anonymous pseudonyms which is not even implied in the original article, you have to wonder if sneaky implecations are beyond their mental capabilities to grasp.Just a thought.

Quote:

By the way, thank you for taking the time to tease this analysis out, Wings. Send me an email and I’ll hook you up with a coupon.

I’ve found this discourse interesting enough to be it’s own reward and have not been looking for any compensation. So, as the offer is appreciated, I will decline it with hopes of not offending the offerer.Regards
Lee McGuire
wings3
I don’t normally bother to actually sign my name on the board as it generally doesn’t matter to anyone but what with the current discussion felt it would be best.

Posted: Wed Jul 25, 2007 9:24 pm Post subject: Wings

Wings,Thanks for the generosity of your reply. I will accept your invitation to address one last specific point:”Whereas you always sign your postings when using the ID of Hannibal, possibly you don’t let anyone know who you are when you use an ID that is not Hannibal? This leads back to the earlier (false?) statement of… has for years been accused of anonymously resorting to the Internet to do battle with his company’s critics…. It’s a pretty sneaky way of implying that you have been posting anonymously but one that is not too likely to be picked up on by most people.”You got it exactly: it is a sneaky way of implying just that, and while this could be coincidence, but since this is the nth time a reporter has done precisely this, it is hard not to see a pattern. So, again for the record:”Whereas you always sign your postings when using the ID of Hannibal, possibly you don’t let anyone know who you are when you use an ID that is not Hannibal?” Answer: I do not “use an ID that is not Hannibal” (unless it is “Patrick Byrne”).”has for years been accused of anonymously resorting to the Internet to do battle with his company’s critics” Answer: This is just a flat lie on Mr. Stone’s part. No on “has for years been accus[ing me] of anonymously resorting to the Internet to do battle with [my] company’s critics”. Just a lie. I asked Mr. Stone to produce some examples of these years of accusations, but received no reply.Lastly, you are right about the rest. “Who in their right mind would really care if in one post you signed Patrick Byrne CEO of Overstock and in a different post you signed Mr. Byrne of the Overstock Corporation? ” Because you are new to this battle, you may not know that underneath essentially all the press accounts you read of me there lies precisely this kind of pettifoggery, over and over. That is because the Establishment press is itself engaged in a cover-up. By the way, we are going to win. We are building a great company, we are getting discovery in our two lawsuits, the information dam is cracking and this scandal is moving into the mainstream (I get more and more calls each week, do radio interviews, etc). If the NYT thought that Jason Blair episode was a problem, I cannot wait until real reporters start looking into these cozy relationships. “Of course with them saying that you have ‘admitted’ having made postings on the Internet under anonymous pseudonyms which is not even implied in the original article, you have to wonder if sneaky imprecations are beyond their mental capabilities to grasp.” Not beyond their mental capabilities. They are just practitioners of the Big Lie. Lie over and over and over about something like that, and readers get disoriented, confusing hard facts with balderdash. It is nice to meet a gentleman such as yourself here. Take care. PatrickLast edited by patrickbyrne on Sat Jul 28, 2007 2:22 pm; edited 1 time in total

Posted: Thu Jul 26, 2007 9:08 am Post subject:

Quote:

“Whereas you always sign your postings when using the ID of Hannibal, possibly you don’t let anyone know who you are when you use an ID that is not Hannibal?” Answer: I do not “use an ID that is not Hannibal” (unless it is “Patrick Byrne”).

Apparently, Brad hasn’t done his research. I hear they offer a great research class at the local community college.This is the problem with journalism. If the guy had spent 2 weeks on this site analyzing the posts made by you.. he wouldn’t have made those statements. How hard is it for a journalist to pick up the phone and ask before making it public?What he has posted is no big secret, its no surprise.. in fact it’s outrageous that he even took to the time to write it. How many people are registered on Overstock Auctions? He couldn’t take the time to ask anyone?You see, they say when you assume you make an @$$ out of you & me.. Unfortunately Patrick, you’ll be the one to clear it up.

It amazes me really. Every post made by Hannibal has always been replied by buyers & sellers on this site that call you ‘Patrick’. We’re not morons, and we know who we’re talking to.

I have good news and bad news

Patrick Byrne — Fri, 20 Jul 2007 03:46:07 +0000

Posted: Thu Jul 19, 2007 8:46 pm Post subject: I have good news and bad news

As readers of this blog know, I have been arguing that our nation is on the brink of a massive financial scandal as a result of unsettled trades in our financial system (it colloquially goes by the name, “naked short selling” though this is in fact just one of the origins of these trades). For two years I have struggled to bring this to the publics attention, but the low-rent of the financial media have not just ignored it, they (to this untutored eye) seem to have done everything they could to cover up the problem. At first a cone of silence descended around the issue, but then, when that was no longer possible, they tried to spin it as just about an eccentric CEO (that would be I) mad that his own stock went down (though I started this when it was going up, and did everything I could to divorce it from Overstock and show the systemic consequences of this crime). Someday someone smarter than I will kick through the rubble and draw the connections between those who benefited from the crime, and those who hijacked the discourse, but that is beyond this Bear of Little Brain.Strange dynamics seem to have been set in play on this subject. On July 5 the WSJ, who for months barely let a week slide by without denouncing, misquoting, or fabricating something about me, wrote a story that described this whole issue pretty fairly. Kara Scannell did not dig too hard, but it was a moderate, fair piece (the target of her investigation squealed like a stuck pig in a follow-on press release, but so it is with bullies who see their control slipping). What was odd about the piece is that it did not mention Overstock, or myself, in any place: it is not as though my feelings are hurt (I have had more press than I ever wanted in this lifetime), but given that I had a pretty fair role in bringing the issue into the mainstream, and given the number of times the WSJ has denounced me for leading this fight, the omission could not have been stranger.I have good news and bad news to report.The good news is that word has just been released that tomorrow night a news channel is going to discuss the issue of naked shorting. The bad news is that that station is going to be CNBC, a group that has been at the heart of the spinning of this story in what appears to have been a deliberate attempt to prevent word of it from reaching the public. But who knows, maybe tomorrow night they will redeem themselves. I have an idea. I volunteer to go on CNBC Fast Money tomorrow night and make sure it is not a whitewash. CNBC has had me on a dozen times or more, so they cannot have objections to it in principle. Yet even though I represent one side of the debate, I bet they will refuse to have me on to discuss it, because it will interfere with their plans to spin it. If they do have me on (without doing the normal shout-him-down routine), I will give them credit for it (and not even bring any signs or affidavits). If, even though I have become synonymous with this issue, they refuse, it will make my larger point for me. In any case, they know where to reach me. Patrick

Professor Christine Hurt

Patrick Byrne — Thu, 19 Jul 2007 03:58:25 +0000

Posted: Wed Jul 18, 2007 8:58 am Post subject: Professor Christine Hurt

Ruh-roh.They are losing control of the narrative. An Illinois law professor named “Christine Hurt” apparently decided to take an independent look into the Mitzvah and discovered… that things are not quite as they are being portrayed in the financial media. She has to make the obligatory swipes about my “tilting at windmills” (that’s OK, I’m used to it, and besides, where I come from we believe in Quixotic quests). And she succumbs to the normal tendency to assume that this is all about Overstock, (after all, what CEO ever does anything out of patriotism or an internal moral code?) That’s OK though. Expect one of two things to happen: Professor Hurt will continue following and writing about these developments with independent eye, in which case she will be widely denounced as a lunatic fringe academic, crazy crazy crazy, etc. Or some hedge fund (linked to a notorious, now banned-from-the-markets-for-life short-biased financier) will show up and make a huge donation to her college of law (as happened with one other group that began digging into this story from outside the confines of the Party Line). And she will be asked to go silent. I have suddenly come to appreciate the value of tenure in our society. Your humble servant, Patrick http://www.theconglomerate.org/2007/07/overstockcom-v-.html Overstock.com v. Gradient (and the Rest of the World) Posted by Christine Hurt While the blogosphere (even here) has been debating the propriety (and legality) of the CEO of a publicly-held corporation to anonymously tout his company and denigrate a potential acquisition target, I’ve been following a story that sounds different, but has some commonalities. Overstock.com (and several shareholders) sued Gradient Analytics, Inc. and Rocker Partners for shorting Overstock shares, publishing false negative analyst reports, then profiting as the share price drops. The actual causes of action are libel, intentional interference with prospective economic advantage and various other California statutes. Many in the financial community pooh-poohed this as another example of CEO Patrick Byrne’s tilting at windmills, but so far a California court says there is something to it. Yes, Byrne seems to be paranoid about Wall Street, but that doesn’t mean someone isn’t out to get him! In the lawsuit, Overstock alleges (and has affidavits from Gradient employees supporting the allegations) that Rocker Partners approached Gradient Analytics about creating reports about Overstock.com. Apparently, much of Gradient’s business model centered around customers subscribing for tens of thousands of dollars a year and getting the opportunity to request negative reports on companies of their choice. Gradient even touted to potential customers how much a negative report on Gradient could cause the share price of a company to drop. At the request of Rocker Partners, Gradient published no fewer than 24 reports in a six-month period, and Gradient was able to approve and request changes to those reports before their release. Neither Rocker Partners nor Gradient deny the reports or the fact that Rocker was short selling Overstock shares. Their defense is that the reports are free speech. Under California law, they moved to dismiss the suit under California’s anti-SLAPP law. This motion was denied by the trial court and upheld by the appellate court (2007 WL 1545611, May 30, 2007). (I will discuss the “free speech” aspects of the case in a different post.) In the opinion, the court stated that the plaintiffs in all probability would prevail on the merits, given what was in the pleadings, and stated “The malice is in the very business model and practices that preordain negative reports and provides probative evidence that Gradient acted in reckless disregard of the truth in making the false statements and implications that it did.” All of the legal documents are collected at Overstock.com’s investor relations hub here. And yes, Byrne has been railing against short sellers for years as the share price of Overstock.com has declined, and most of written off those (somewhat bizarre) rants. Indeed, Byrne has also filed a lawsuit against major Wall Street investment banks for being part of a vast short-selling conspiracy against his company. The short-selling conspiracy story does make one shake one’s head, though; Overstock.com has been on the naked short-selling watch list for over 500 days. For some reason, this company is not only sold short more than any other company, it is sold short for pure speculation, with the bettors skirting the law not to actually borrow the shares they are shorting. In any given day, more shares of Overstock.com are shorted than are in the public float. Whether that mystery will ever be resolved to uncover illegal machinations remains to be seen; however, this very discrete and particular case against Gradient and Rocker Partners seems to have some teeth. Securities Regulation TrackBacks (0) TrackBack URL for this entry: http://www.typepad.com/t/trackback/38673/20075268 Links to weblogs that reference Overstock.com v. Gradient (and the Rest of the World): Comments (4) 1. Posted by anonymous on July 17, 2007 @ 11:12 \| Permalink Ms. Hunt, Judging by your blog post, it looks like you read only one court document. That’s problematic for the following reason. The law requires that the court assume that the overstock claims are true at this point so that they can assess whether or not the Anti-SLAPP law applies. The court has not yet examined the veracity of those claims. In fact, the overstock claims are based entirely on the declaration of one disgruntled, fired ex-Gradient employee. That same ex-employee has been completely discredited by several journalists. He will be discredited at trial too, if the case ever goes to trial. You should read some of the other court documents to get a more balanced view of the issue. 2. Posted by Patrick Byrne on July 17, 2007 @ 19:45 \| Permalink Professor Hurt, Congratulations on a cohesive summary of the situation. I respectfully warn you, though, if you keep at it you will see articles appearing about “paranoid rants” being written by a UICL law professor. One aspect of this affair that has been eye-opening for me has been the realization of how “captured” are various social institutions. First and foremost of these is, of course, the SEC. For example, the practices described in our lawsuit have long been widely known on Wall Street, and our allegations seem to be widely regarded to be true by the “smart money”. Years and years ago, long before Overstock existed, this type of behavior was explained to me in a “this is how the game is played” kind of way. Several of the most prominent figures on Wall Street today have encouraged me in this fight, saying things like, “I’ve watched these jerks do this for years, it is about time someone stood up to them.” It is not a tough problem to solve. It is, however, a tough problem to solve without seeing about two dozen rich guys get their heads handed to them in court. The SEC lacks the will to do that. They can take on Martha Stewart over a few tens of thousands of dollars, but they cannot stand up to the toughest hedge funds on Wall Street. Regulatory capture is nothing to be surprised about, I know, but the capture of the industry of financial journalism is especially disheartening. I have dealt with dozens of journalists over the years, and have generally found them to be honest, intelligent, and fair. In fact, for years I told people that the common perception of journalists was way off the mark in that way. However, when it comes to reporters on the Wall Street beat, what I have found has amazed me, in that they will not even consider data that is coming out of academia, based on Freedom of Information Act requests of our government, that indicate the problems in our settlement system are deep. The hedge fund friends who feed them their stories tell them to ignore it, so they dutifully ignore it, even though there are now some serious, heavyweight economists who are saying, “Houston, we have a problem.” I should make clear that I do not think my claim about financial journalists is a universal truth. There are several good ones, notably Gretchen Morgenson at NYT, who has written compellingly of an SEC whistleblower named Aguirre who has given compelling testimony about the SEC’s capture by Wall Street figures with “juice”, as his superior once described someone Aguirre was investigating. Gary Matsumoto and Bob Drummond at Bloomberg have done explosive articles on the naked shorting controversy, as has Liz Moyers at Forbes, while her colleague there, Nathan Vardi, has written of the involvement of Russian OC in these matters. But by and large, the financial press has shown itself the lapdog of the financial industry. The Wall Street Journal is to Wall Street as Sports Illustrated is to sports, Fortune is People Magazine for capitalists, and The New York Post financial columns are for folks who move their lips when they read People. This explains the anonymous post that precedes mine. What has actually happened is that certain miscreants committed acts A, and we filed a lawsuit alleging that A occurred. Their Motion to Demur had to state not-A, but because they did not even want A out there in the public mind, their pet reporters have written about the case as being about something else entirely, X, to the point that they would not even describe the contents of the affidavits at issue. That the 5 or 6 reporters who have so studiously insisted that is is about X are the same small crew of 5 or 6 who have spent their careers writing hatchet jobs on the same companies that those miscreants have shorted, is, I am sure, entirely coincidental. It just one of those coincidences that happens over and over with complete predictability. The problem for them all is that the wig is beginning to slip. The trial judge in Marin decided on all counts, 8-0, that this suit is not about X, it is about A. The California AG weighed in with an amicus agreeing that this case is not about X, it is about A. The California Court of Appeals decided 3-0 that it is not about X, it is about A, and denied their motion to reconsider the question. So the problem for them has become, how do they keep the wig in place? A slew of hedge fund choagies from the NYT, NYP, Fortune, and WSJ (Nocera, Roddy Boyd, and the Minions of Kansas) wrote stories about how crazy and paranoid were my rants, but unfortunately for them, a small subset of the evidence from which I drew my beliefs has been examined by a trial judge, an AG, and three jurists of an appellate court, who have all said, “Yep, they’re probably going to win.” The anonymous post on your site is a fine example of what I mean. Returning from it to the real world for a moment, what we have is a series of people who worked for a company who realized it was crooked. Three of them came forward and said to their boss, “We cannot do this anymore. This business model is completely illegal. This has to stop.” A few days later they were fired. They brought their information to me, I investigated and found more employees with the same story, and I started a lawsuit. Of course, Roddy Boyd and the other cronies dutifully play their role by saying that they are all just disgruntled ex-employees: that is the stuff about, “That same ex-employee has been completely discredited by several journalists” (the insistence that “the overstock claims are based entirely on the declaration of one disgruntled, fired ex-Gradient employee” is just another of those false claims they numbly repeat with mantra-fervor in the hope that will make it true, but a quick check of the documents you linked to on our site will dispel their claim). Believe it or not, someday soon the Law & Economics, Public Choice, and CLS folks are all going to find a huge area of agreement: behind the scenes, powerful interests have jacked the controls of our society to a degree that only the most paranoid imagined. This case against Gradient, Rocker et. al, and our other against the prime brokers, are going to provide windows into that world. So when in your writings you notice simple, obvious things like the CA Court of Appeals rejects their arguments 3-0, please expect to find yourself denounced as a paranoid as well, with great energy, by the same handful of reporters (Herb, Roddy, Bethany, etc.) who write story after story on every other company (e.g., CROX shoes, Taser, Take-Two, etc.) that David Rocker and his friends short. Always, I am sure, coincidentally. Regards, Patrick Byrne

The Empire Whines Back

Patrick Byrne — Mon, 16 Jul 2007 18:44:52 +0000

Posted: Mon Jul 16, 2007 11:44 am Post subject: The Empire Whines Back

It should come as no surprise that the corporate media would object to a 2.0 world of citizens communicating outside the well-worn channels of mass media: monopolies always go down whining. However, the way in which the story of Whole Foods CEO John Mackey is being used in a broadside against those who have stepped outside the Establishment’s rules of discourse, and who attempt to shine light on the way that discourse has been hijacked, is particularly bald.From the facts as reported, what Mackey did was wrong. He never identified himself while he dissed a competitor and pumped his own company, its stock price, and his own haircut. Bad form all around, lad. Especially on the haircut.

The similarity between those acts, and my practice of writing on message boards posts that steer clear of Overstock’s stock price (and explicitly disclaim any opinion on this subject), and instead discuss a massive criminal conspiracy to defraud our nation’s capital markets that may end in 1929-style systemic failure, would be a similarity that may be lost on you. It was lost on me, too, especially given that I post in a way that is anything but anonymous (signing most of them “Patrick Byrne”, “Patrick”, “Patrick Byrne, CEO”, using either a user-name “Hannibal” which I initially forewarned and frequently reiterate is myself, or else, simply posting as “Patrick Byrne” on a message board called, “Take 5 With Patrick”). In short, given that Mackey’s posts touted his own stock anonymously, while my posts which avoid mention of the subject, discuss social issues beyond Overstock, and can only with great selective effort be read without understanding the identify of their author, one would think that any attempt at equating the two would be a superficiality too extreme even for the mass media to maintain.

Yet once again, The New York Times has not let me down.

New York Times reporter Brad Stone contacted me late last week for comment on the Mackey affair. The questions he emailed to me included,

Quote:

Talk about the temptation chief executives feel, when they see their companies getting disparaged online, to participate in the discussion?Is there something about today’s participatory Internet culture – the fact that anyone can express their views – that makes that temptation so extreme?

In conversation with me Mr. Stone attempted the same gambit, trying to draw me out on the “extreme temptation” to which I was, apparently, succumbing, in daring to step outside the mass corporate media to raise public awareness of any issue that threatens our country. I requested (and he indicated acceptance) that he should not put words in my mouth, that I do not see exercising my duty as a citizen as an example of a “temptation” whose allure was too strong to withstand. As I wrote to him:

“You became a journalist: would you have characterized this as having caved in to some ‘temptation’ that was too ‘extreme’ to withstand? Then why describe in such terms another’s decision to take part in the public discourse? ”

On the general history of my postings and my identification therein, this is what I wrote him:

Quote:

In the very early days of the company (1999-2000?, well before we went public) I used to go to a website called F—-d company, seeking information on businesses that might be looking to liquidate their inventory. Eventually I posted a couple-few times under the name “Hannibal” suggesting that if anyone had inventory to liquidate to please contact me.
Incidentally, I chose “Hannibal” as an allusion to the Carthaginian general (one of history’s great underdogs, in my view), and not to the cannibal of modern fiction. However, given that our business model at the time was liquidating the inventories of failing dot-coms, the irony was not lost. I believe I did reveal my real name, but I am not sure.
I have not been back in 5 or 6 years.I have read some bashers claim that my posts are hard to find there, and that I must have caused them to be removed. I have no idea if my posts are hard to find (as I said, I think there were just a few), but I have had nothing to do with it either way: the assertion is pure fabrication.

A couple years ago I started posting on Fool.com. I continued using “Hannibal” (and added “100” because of some requirement of Fool) but revealed who I was right away, signed my postings, and generally made sure that it was common knowledge to everyone on the board that Hannibal100 = Patrick Byrne. Of course, I disclaimed any attempt to encourage anyone to buy our stock, any opinion on our stock, etc. I was there for other reasons than to discuss our stock.

In time, the discourse on Fool was hijacked by the same people who hijacked Yahoo, using the same methods (clogging, non sequitors, sock-puppeting, etc.) A site called “InvestorVillage” started up. Some people there asked openly if I would switch. So I did.

Somewhere in there Overstock created an auction site, and in it, an auction message board. My original name on auctions was “Hannibal” but anyone who checked my user page would see that Hannibal was Patrick Byrne, and in addition, it was widely known (that is, everyone who communicated with me on the auction message board knew they were communicating with the CEO).
In time, however, I created an area on our auction message board called “Take 5 With Patrick”. I noticed that I could post there and others would repost them in the other places, so I gradually narrowed my posting to our own site. Also, most of my posts there generally started as small columns added to our marketing emails that go out to 10 million people, with my name on them (again, I was doing anything but trying to be anonymous).
In recent weeks, we have created a small blog area as well within Omuse, a nascent social networking area of our site, but so far all I have done is move my posts over from the other places.

See upper right hand corner (that’s my picture): http://forums.auctions.overstock.com/

Other than that, I have twice, I think, posted on some shopping blogs, using my real name to answer some question about our site, or customer service (I offered free Club O memberships to anyone who wrote me within a few days: I got 1,000 requests). On both of these shopping/customer service blogs I used my real name.

I have not posted anywhere else under any other name.

I continued with a number of posts representing a fair sample of my posts. Some were signed, “Patrick Byrne, CEO, Overstock.com”, some were signed just, “Patrick”.

One would have thought that this answer was comprehensive and well-documented enough to be incapable of misrepresentation. But, once again, the New York Times reminds us once again of their agenda. Note this from today’s story:

Quote:

Mr. Mackey and Mr. Black are only the latest examples of high-profile figures who tried to exploit the anonymity of the Internet to promote their companies and combat enemies under false pretenses.Patrick M. Byrne, founder and chief executive of the beleaguered online retailer Overstock.com, has for years been accused of anonymously resorting to the Internet to do battle with his company’s critics. In an interview, Mr. Byrne said that he never hides his true identity and always signs his name when he posts under his online handle, “Hannibal” (the Carthaginian conqueror, not the celluloid serial killer).

Mr. Byrne said he uses online forums to convey what he has learned about the hidden agendas of his critics. “Nothing about being a public figure compels one to surrender one’s First Amendment rights,” he said.

While the New York Times asserts that I am “a high-profile figure[] who tried to exploit the anonymity of the Internet to promote their companies and combat enemies under false pretenses,” they have not done anything so tacky as adduce evidence to support this claim.

They adduce no evidence that I have “tried to exploit the anonymity of the Internet” (which is right and appropriate, because it is a lie).

Their attempt to characterize my efforts to bring public attention to a financial crime that may someday cause our nation’s capital markets to implode as an example of “promote their companies and combat enemies under false pretenses.” Again, they have done nothign so tacky as adducing evidence to support such these claims, no evidence that I have tried to “promote” Overstock, and no evidence of false pretenses. In fact, I would say that these are the most content-less allegations I have seen in awhile, going beyond what the normal hedge fund choagies do on their blogs (they at least have the grace to try to spin and lie about what I say, rather than simply fabricating allegations and hoping their brand carries the day, as the New York Times appears to be doing).

Of course, they have a special problem to deal with: my claim, that our country is facing a financial scandal of epic proportions, is a claim that is being confirmed in reports and statements by Bloomberg, Forbes, SEC Chairman Cox, Commissioner Atkins, and numerous economists and analysts. How do they handle that one? They resort to a play right out of Choagie Playbook – 1st edition, which insists that no coverage be given to this scandal I am trying to expose, and instead characterize it only as an effort of mine to “combat enemies.”

How long do they think they can keep the wig from slipping by just piling up misstatement upon lie upon fabrication?

Here is the funny part: I don’t think Mr. Stone (whom I dealt with in his previous incarnation as a Newsweek reporter) is a bad reporter. But The New York Times has published a bad story. Myself, I see a strong editorial hand in this story. In fact, what is really going on is that the newspaper industry, which once had a monopoly on setting the Party Line, is now a buggy whip business. The average age of a newspaper reader is in his 50’s, and essentially no one under 30 subscribes to newspapers. New forms of journalism are fresher, more accurate, and waste less of the reader’s time kowtowing to the Establishment and its various corruptions, than does the mass media. Like all monopolies before it, it will fight to hold onto its monopoly. The naked shorting issue has developed under their noses with their full awareness, and in deference to the masters they serve they have kept quiet about it. With the facts finally and clearly lining up against them they have no resort but simply to stack their credibility chips as high as they can in an effort to steal the pot. This effort of The New York Times is noteworthy in that regard for its shamelessness, if not its originality.

Incidentally, I love that they are doing this. I love putting my credibility on the line against The New York Times (and Wall Street Journal for that matter). Time and the facts are on my side.

Your humble servant,
Patrick

PS Note that Mr. Stone summarized the above lengthy exposition with these words, “Byrne said that he never hides his true identity and always signs his name when he posts under his online handle, ‘Hannibal’”. As you can see from the email above, this is a flat misstatement. It has not, however, kept one of the hedge fund choagies from writing today, counting up the times I did not sign things “Hannibal,” but instead, “Patrick,” “Patrick Byrne,” and so on. The beat goes on: lie about what is said, and then disappear down a rat hole of “analysis” of those stretched and fabricated statements. it’s just another of the things I love about this story: it is a compendium of the flailing that occurs when the wig begins to slip on a degenerate Establishment.

A Small Thing Called, “The First Amendment”

Patrick Byrne — Thu, 12 Jul 2007 21:30:13 +0000

Posted: Thu Jul 12, 2007 2:30 pm Post subject: A thing called, “the 1st Amendment”

Hi.If the WSJ is to be believed, it appears that the CEO of Whole Foods, Inc. has been going on message boards anonymously for years bashing a competitor’s stock and pumping his own. A number of journalists have contacted me today to discuss the subject of a CEO going on message boards. All have been professional, two even noted quickly at the outset the vast gulf that separates what Mackey did and what I have done, and I heard nothing in their questions that suggested an inappropriate agenda. That said, as is my wont, I am going to post here the answers I am giving, so there can be no mistake about it later, and also, for ease of reference for other journalists who have the same questions.1) What is the limit of what is appropriate when it comes to executives going online?Some obvious points first: I think the Achilles heel of the Internet is anonymity. People behave in an uncivilized fashion when they are anonymous, but when they are stripped of anonymity, those same people begin behaving politely. So in general, I tend to discount the thoughts of anyone who insists upon anonymity (unless there is a real security concern). This applies to everyone, whether they be executives or not.Second, no executive (or for that matter, any employee) should ever go online to talk up her own company’s stock or try to bash a competitor’s stock price. It is almost a tautological truth to note that an executive of a public company is in some sense a public figure (more accurately, the company is a public figure and the executive is a component of that). Anonymous posting by public figures is especially distasteful to me: put differently, I think that when a person decides to become a public figure he is relinquishing his ability to take part in public discourse without identifying himself, simply as a matter of etiquette, not law. The only exception I would suggest to this principle is if it concerned a subject well divorced from that area in which he is a public figure (e.g., if Henry Kissinger were into model airplanes, then I think there would be nothing wrong with him being on message boards about model airplanes without identifying himself). All that said, there is nothing about being a public figure compels one to surrender one’s 1st amendment rights. 2) What do I think of Mackey? From what has been reported, he sounds pretty crummy: he bashed a competitor, their stock and management, and touted his own, all anonymously. That violates every principle I articulated below. Incidentally, it may be neither here nor there for your story, but in case you are interested, there is a Yahoo poster who uses the names “netmargin15” and “can_i_use_this_alias” who both pumps Amazon and bashes Overstock. The first is the smart sock-puppet, the second is the basher. I know: • He or she is an Amazon employee. • He or she is of a rank high enough to have access to Amazon’s VPN service. • He or she displays a very high level of business knowledge, commensurate in my experience with a senior executive. As a journalist, I cannot reveal my source for this information. But you can also ping this person through Yahoo. 3) When it comes to my online activities: a. What have I done? b. Where? c. What names? d. Why? In the very early days of the company (1999-2000?, well before we went public) I used to go to a website called F___ckedcompany.com, seeking information on businesses that might be looking to liquidate their inventory. Eventually I posted a couple-few times under the name “Hannibal” suggesting that if anyone had inventory to liquidate to please contact me. Incidentally, I chose “Hannibal” as an allusion to the Carthaginian general (one of history’s great underdogs, in my view), and not to the cannibal of modern fiction. However, given that our business model at the time was liquidating the inventories of failing dot-coms, the irony was not lost. I believe I did reveal my real name, but I am not sure. I have not been back in 5 or 6 years. I have read some bashers claim that my posts are hard to find there, and that I must have caused them to be removed. I have no idea if my posts are hard to find (as I said, I think there were just a few), but I have had nothing to do with it either way: the assertion is pure fabrication. A couple years ago I started posting on Fool.com. I continued using “Hannibal” (and added “100” because of some requirement of Fool) but revealed who I was right away, signed my postings, and generally made sure that it was common knowledge to everyone on the board that Hannibal100 = Patrick Byrne. I was there for other reasons than to discuss our stock. Of course, I disclaimed any attempt to encourage anyone to buy our stock, any opinion on our stock, etc. In time, the discourse on Fool was hijacked by the same people who hijacked Yahoo, using the same methods (clogging, non sequitors, sock-puppeting, etc.) A site called “InvestorVillage” started up. Some people there asked openly if I would switch. So I did. Somewhere in there Overstock created an auction site, and in it, an auction message board. My original name on auctions was “Hannibal” but anyone who checked my user page would see that Hannibal was Patrick Byrne, and in addition, it was widely known (that is, everyone who communicated with me on the auction message board knew they were communicating with the CEO). In time, however, I created an area on our auction message board called “Take 5 With Patrick”. I noticed that I could post there and others would repost them in the other places, so I gradually narrowed my posting to our own site. Also, most of my posts there generally started as small columns added to our marketing emails that go out to 10 million people, with my name on them (again, I was doing anything but trying to be anonymous). In recent weeks, we have created a small blog area as well within Omuse, a nascent social networking area of our site, but so far all I have done is move my posts over from the other places. Other than that, I have twice, I think, posted on some shopping blogs, using my real name to answer some question about our site, or customer service (I offered free Club O memberships to anyone who wrote me within a few days: I got 1,000 requests). On both of these shopping/customer service blogs I used my real name. I have not posted anywhere else under any other name. Here are some examples: http://boards.fool.com/Message.asp?mid=23887352&sort=whole&vstest=search_042607_linkdefault Author: Hannibal100 Number: of 13190 Subject: Watch 60 Minutes Tonight Please! Date: 3/26/06 1:16 PM Post New \| Post Reply \| Reply Later \| Create Poll Report this Post \| Recommend it! Recommendations: 23 Dear Fools, For all who have not gotten the word, please watch 60 Minutes tonight. I believe that it does not even mention “Overstock.com.” However, the facts it presents and the story it tells are well known to me, as are the witnesses who will appear on camera. I expect the piece will tell precisely the story of which I became aware in the autumn of 2004. If my behavior has seemed a little strange since then, perhaps it will appear a bit more explicable if you watch this and reflect on the wider market ramifications of the behavior described. Ask yourself as you watch it, “These guys are making money from someone: whose money is being siphoned off? Yours, Patrick PS Remember the story you see tonight is itself just a chunk of the issue of the looting of the savings of Americans. But how do you get someone to eat an elephant? One bite at a time. http://www.investorvillage.com/smbd.asp?mb=3532&mn=155&pt=msg&mid=146514 Msg: 155 of 8668 7/22/2006 2:47:31 PM Recs: 26 Sentiment: Not Disclosed By: Hannibal Send PM Profile Ignore Recommend Add To Favorites Posted as a reply to msg 77 by ostkprtnr Re: Any chance Patrick will start posting here? Hi. This is Patrick. Probably not a great idea for me to post often. I want to respond substantively to folks’ points (both good and bad), but the more substantive it is, the more there is a Reg FD issue. That is a shame, because I sure would like to level the playing field for you guys. I try to keep it as level as possible by being scrupulous about FD. As much as I wish I could answer some of the questions you post here, I am pretty sure that this would not count as fair and public disclosure. Still, I will be watching: folks always email me the best posts, so I’ll be reading those. And maybe I will answer the occasional question that presents no Reg FD issue. I may have to do that on my auctions board. Or else, I might occasionally post a link to something public that answers a question someone raises. Good luck. Your humble servant, Patrick PS It is nice to see that a certain Guy With much time on his hands and who could not Get With the program over here at investorvillage has now Gone Wholly mad. Hours go by without anyone posting on Yahoo. He tries a couple of his old tricks, but there is no one to clog, all sane people having fled to investorvillage. After silence, silence, silence, he suddenly goes back and posts half-a-dozen clogs, and then when there is still no response, he writes: Much better since the scam artists left (Not rated) 7 minutes ago Too many people were getting suckered by low life, scum sucking, penny stock pumping grifters and it’s good to see that Yahoo has forced them all to leave. They were unable to continue to clog the boards and stifle discussion under the new message board formats and as a result engaged in a hasty retreat to Guyana. Rate it: 1 star + unrated 5 stars &&& http://www.investorvillage.com/smbd.asp?mb=3532&mn=171&pt=msg&mid=148713 By: Hannibal Send PM Profile Ignore Recommend Add To Favorites Posted as a reply to msg 164 by Biopharmer Re: Any chance Patrick will start posting here? Actually, I have always used as my nom de guerre “Hannibal” after Hannibal of Carthage. The Romans were 10 and 0 until they went and screwed with the wrong guy, who through a series of brilliant tactical and strategic moves took them 2 falls for 3. He didn’t just think outside the box, he didn’t care where the box was (end-running the Romans by crossing the Alps on elephants? I bet that was not one the Romans had anticipated.) Yes, he lost in the end to Scipio Africanus, fled to Syria and when the Romans caught up with him 10 years later, drank poison. But he fought the good fight. I am also aware of the George Peppard and Anthony Hopkins versions. Nothing wrong with those. One has to set one’s sights high. Patrick < EOM > Joined: 24 Sep 2004 Posts: 62 Posted: Mon Jun 26, 2006 9:34 am Post subject: My Favorite Zen Story ________________________________________ Dear Honored Guest, In a remote village in Japan there lived a Zen master named Hakuin. He was known for his devotion to the pure and simple life of a monk. One day, a beautiful, unmarried girl in the village fish market was found to be with child. As it was a conservative village, the family was furious. The girl refused to say who the father was, but after much pressure, she finally admitted that the father was the master Hakuin. In great anger the family confronted the master, criticizing him for taking advantage of the trust he had been shown. They asked him, “How could you have betrayed our trust so badly?” Hakuin’s only response was to say calmly, “Is that so?” Hakuin’s reputation was destroyed, but he did not appear to mind. When the baby was born it was brought to Hakuin. He took great care of the child, though he now had to beg to survive. The villagers would scorn him, saying, “We will never forget that you betrayed our trust, you miserable monk.” Each time, Hakuin would reply calmly, “Is that so?” Several years later, the young mother finally confessed the truth: the baby’s father was not Hakuin, but another young man from the village who had not been willing to accept his obligation, so she had accused the monk knowing that he would do the right thing. The villagers went to Hakuin to request the return of the child, saying, “We are so sorry, how could we ever have believed this of you?” Relinquishing back to the family the child who had become his own, Hakuin said gently, “Is that so?” Respectfully submitted, Patrick M. Byrne Overstock.com http://forums.auctions.overstock.com/viewtopic.php?t=13594&sid=470ff7669d1b065c059828614c4c689e Dear Honored Guest, Worldstock is special in a way that can best be explained with a few stories. Worldstock launched in September, 2001. In Peru, we found a small co-op of artisans making leather-and-wood furniture, and asked them to make ten Ottomans for us: we sold out in a day. Then they half-filled a container: again, we quickly sold out. When we wrote about placing larger orders, we received this reply: “The artisans literally wept tears of joy and danced in the streets yesterday when queried about their ability to produce these orders. They promised to do what was necessary — work night and day — to make all that was ordered as soon as possible, and more if things continued to sell for you. While many had expressed their sadness at the events of September 11, and to say they were united in solidarity with the USA against terrorism (which many of them have faced years before us), no one had mentioned work. Silently, they had feared that the repercussions of the terrorist attack would harm our economy, and that since they were producing ‘gift’ items, no one would be thinking of buying them. How would they feed their children? they worried. How would they pay tuition for their schools? How would they pay the rent? Could they pay their workers? Or should they fire them now? Should they wait to visit the doctor or buy medicine, not knowing if they’d have any income to pay for it next week? I just wanted you to know that your success with our products means food, schooling, medicine and hope for dozens of families in Peru. On behalf of a lot of happy artisans, thank you.” Now we get one container every two months from them, and their small co-op has mushroomed into a federation of hundreds of wood-and leather-workers earning good livings. Similarly, in Nepal Worldstock has been able employ metal working artisans who would otherwise be out of work have lost business due to a Maoist insurgency. In a village near Chiang Mai, Thailand, a small family business employs artisans to make us handmade furniture. In total, thousands of artisans in 35 countries are working to offer you their quality handicrafts in our Worldstock department. We abide by principles of fair trade. A detailed explanation of the history and principles of Worldstock can be found here, but the short version is, we are trying to double or triple the income of less fortunate people around the world, while offering you exotic products at a fraction of the price at which you would find them in expensive boutiques. Respectfully submitted, Patrick M. Byrne Overstock.com In one post I even reposted all my posts from the past: http://forums.auctions.overstock.com/viewtopic.php?t=15460&sid=470ff7669d1b065c059828614c4c689e 3. Why do I post? I assume these are of less interest to you, but there are simple cases where I am just giving my take on things, or discussing a new program at Overstock (auctions, Worldstock, etc.), or in one case, mourning the passing of a friend, Milton Friedman: http://forums.auctions.overstock.com/viewtopic.php?t=15908&sid=470ff7669d1b065c059828614c4c689e However, for the more controversial posts, I give two explanations: 1) I am a big admirer of Reg FD. From my time on Wall Street (years ago as an analyst, now as a CEO), I can tell you that the gestalt of Wall Street is that corporate executives get behind closed doors and are expected to cough up information that gives Wall Street elites an information asymmetry versus the ordinary investor. I think that is wrong, and think FD is one of the best regs to come along in decades. Because of this, I think that executives going into a public forum that really is open to the public, and communicating with the public directly, could be healthy for the capital markets. That said, while I go on message boards to discuss what I see as a financial scandal of enourmous consequences for our cotunry, I have made it a point not to discuss anything material about Overstock (and in general, I stay away from discussing Overstock qua Overstock, though I may discuss the scandal in ways that touch upon Overstock). 2) The second reason for why I do it is this: I have for two years thought that we are approaching a calamity in our capital markets caused by unsettled trades: these have accumulated to the point that they represent a massive latent derivative risk to which no one wants to admit. I think that if it is not addressed it will become a national disaster (the Economist noted late last year that new capital formation, the best measure of the health of an economy, has dropped in this country from 57% of global IPO capital formation to 16% over 7 years, as I recall). I have tried to stop this before it is too late. The Establishment has elements which have reaped billions by exploiting this crack, and they do not want to see it sealed. Those same deep financial interests have captured the regulatory body that oversees our capital markets (the SEC), and much of our financial press as well: CNBC, Barron’s, and the Wall Street Journal. Barron’s is nothing but marketing literature for a few hedge funds. They meet any attempt to expose this scandal by saying, “Oh, that is just some CEO who is mad about his stock” (though I started this nwhile the stock was going up, and have done everything I can to divorce it from me, Overstock our share price, etc.) Thus, I turned to the Web. If Rathergate (i.e., Dan Rather versus the bloggers) was the Concord of the 2.0 Revolution, then I believe this scandal is going to be its Yorktown, for the financial press will be shown to have not simply ignored a scandal, not simply turned a bling eye to it, but to have actively taken part in the cover-up. This post from a couple months ago says it all. Respectfully, Patrick http://forums.auctions.overstock.com/viewtopic.php?t=17296&sid=470ff7669d1b065c059828614c4c689e Posted: Sat May 12, 2007 1:03 am Post subject: Gotterdammerung of the American mainstream media ________________________________________ Ha ha – this is a great one. An all-time classic from Joe Nocera, New York Times. Below you will find an email Joe Nocera sent me asking for my “reaction” to some odd claims he wanted to include in his weekly column. Alas, he sent the email Friday afternoon at 12:11 PM his time (note the “10:11 AM” time stamp of our email system, which is in Salt Lake City, that is to say, Rocky Mountain Time) and, as I was in Texas this afternoon in a meeting, I missed the window of a few hours that I theoretically had been offered to respond before Joe’s deadline for his weekly column. Congratulations are due Joe, who has crossed a line never previously crossed (not even by Carol!) by those engaged in their desperate efforts to keep the wig in place. ======================================================= —–Original Message—– From: Joe Nocera [mailto:XXXXX] Sent: Friday, May 11, 2007 10:11 AM To: Patrick Byrne Subject: david rocker patrick– David Rocker made a speech a couple of weeks ago in which he said, among other things, that your lawsuit was nothing mroe (sic) than an effort to silence critics. He also said that Gradient did its first report about Overstock a year before Rocker Partners even became a client. And he said that Mr. Anafantis (sp?) has been discredited with the SEC’s “no action” letter. Your reaction? – Joe Nocera XXXX YYYY nocera@nytimes.com ================================================== Had Joe actually abided by the principles of Ethics in Journalism 101, I would pointed out the numerous flaws in his attempt to whitewash the criminal activity of his friend Rocker with a “Free speech in America is very important” spin. Remember, from the start Rocker’s lawyers have tried to spin his illegal activity as being about free speech, and this is how the argument has been met by the adults who have examined it: 1) On 8 counts versus 0, the trial judge in Marin Country sided with us and against Rocker’s claim that this suit was about free speech. In fact, the judge said in the courtroom that after his initial review of the evidence there was a “high likelihood” that we would win the suit. Rocker appealed. 2) The California Attorney General appeared out of nowhere and filed an amicus with the appellate court supporting our side and against Rocker’s attempt to spin this as about free speech. 3) The appellate court recently heard Rocker’s arguments. This Law.com article gives a good sense of how the appellate court responded to the hysterical attempts by Rocker’s lawyers to spin his illegal conduct as being about free speech. www.law.com/jsp/article.jsp?id=1176282246984 The Law.com article captures one judge’s reaction nicely: “Justice Ignazio Ruvolo indicated there was evidence even ‘at this stage of the proceedings’ that could substantiate Overstock.com’s claims.” Somehow Joe missed that. I’d also have pointed out that Rocker does not seem to think “Free speech in America is very important” when someone criticizes Rocker: Rocker famously sued some message board posters a few years back for daring to criticize him and his unethical behavior (incidentally, that case got laughed out of town). Free speech doesn’t seem to be that important to Rocker, Joe. In the face of these facts, Joe blithely asserts that “The facts are not on Mr. Byrne’s side” without mentioning that the trial court, the California attorney general, and the appellate judge have indicated exactly the opposite, even at this extremely early stage. Joe notes without question that, “Mr. Rocker wasn’t even a client of Gradient when it began writing its tough-minded reports on Overstock,” neglecting to mention that ex-employees of Gradient assert that the firm had a relationship with Rocker even before he formally became a client. Joe writes about his friend Rocker “But you know how lawsuits are: a year and a half later, the thing has barely gotten started” without mentioning that we have been most eager to move forward, but that his friend Rocker has stalled and delayed at every opportunity, rejecting the appellate court’s offer to rule without delay for a hearing: there was even one article where an attorney for the miscreants promised to appeal the appellate court ruling. That is, Joe bemoans the fact that “the thing has barely gotten started” while conveniently neglecting to mention that it is his friend Rocker who is doing everything he can to keep it from getting started. And so on and so forth. Is anyone else noticing that something seems to be going on this week? 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 on the miscreants that a fair bit of the material being requested by the SEC concerns them, not me or Overstock. What would have made them so angry this week? Perhaps they are mad that last Sunday, at an event hosted by The Economist (a publication with infinitely more credibility than Joe, Roddy, Herb, Gary etc. could ever aspire to), the bad guys lost control of the narrative? http://www.cultureproject.org/index.php?option=com_content&task=view&id=49 http://cultureproject.org/video2/archivepages/hedge2.html I think these fellows better hope that the scandal whose lid they are trying so desperately to secure never blows off, because if it does, in the aftermath not only with their journalism come under examination, but more importantly, the publications which have blithely published it will be seen to have been part of the cover-up. Which is entirely right and approrpiate. And then that will be the end of it. Can anyone doubt at this point that we are witnessing the Gotterdammerung of the American mainstream media? Patrick

Posted: Fri Jul 13, 2007 8:05 pm Post subject: Auction marketing

Some people are wriiting onto these boards to discuss auction marketing.It would be better if you wrote Meghan about that directly, but since you asked: we have not found it wise to market auctions separately from the general website. What we are having some luck with is the Omuse tab. Partners of our B2C tab are going into Omuse and writing guides to their products, then linking to them from their guides.I hope that helps.Best all.Patrick

Crazy Sam Writes the Most Ironic Email in History

Patrick Byrne — Sun, 08 Jul 2007 07:18:41 +0000

Posted: Sun Jul 08, 2007 12:18 am Post subject: Crazy Sam writes the most ironic email in history

Hey folks.There is a fellow named Sam who, as he proudly points out, is a convicted felon (he is less proudly open about the fact that he ratted out some family members in order to save his own skin). He is not in prison now, and makes a “hobby” out of clogging message boards with deposition-style questions for and non sequitors about me, posted round-the-clock (see example below). The miscreants are running low on new cronies willing to join their group (the sane journalists have woken up to what is going on, and even let me know that they see it), so Sam is being promoted to the rarified ranks of Crony-in-Training (Herb had Sam on a few nights ago – now we see Herb quoting Sam in his stories, Sam quoting Herb, etc. etc.) Sam has been blasting me, our board, our lawyers etc. with more of the same, and, as he makes clear, government officials as well. He asked (at the bottom of the enclosed letter) that the following not be made public, but I think that his letter tonight, exhibiting as it does the highest ratio of claims to evidence, the purest falsehoods, and the least supported assumptions, that I can recall being packed into one of his missives, is too sweet to be kept private.Enjoy. ============================================= Hi Sam, Thanks for demonstrating your sanity with that lucid, cogent analysis. Tell me, why is it “reporting” when the New York Times does it, but “stalking” if I do it? I missed that part of the first amendment. Patrick ——————————————————————————– From: Sam E. Antar [mailto:sam@whitecollarfraud.com] Sent: Sunday, July 08, 2007 12:23 AM To: Board – Jonathan Johnson; Clay Corbus; Joseph Tabacco; Patrick Byrne Cc: RicciardiW@SEC.gov; mckeanw@SEC.gov; camposr@SEC.gov; IsraelK@SEC.gov; korbn@SEC.gov; new-york@adl.org; san-francisco@adl.org; simpsonr@SEC.gov; mckeanw@SEC.gov Subject: White Collar Fraud Blog: Patrick Byrne, CEO of Overstock.com, Continues his Ugly Campaign of Menace To the Board of Directors, Audit Committee, and CEO of Overstock.com You are on notice as to the CEO Patrick Byrne’s continued violations of Overstock.com’s Code of Business Conduct and Ethics. http://www.whitecollarfraud.com/files/26805346.pdf You are respectfully reminded of your duties regarding Overstock.com’s Code of Business Conduct and Ethics. Please refer to my blog for additional information. Title: Patrick Byrne, CEO of Overstock.com, Continues his Ugly Campaign of Menace Link here: http://whitecollarfraud.blogspot.com/2007/07/patrick-byrne-ceo-of-overstockcom.html Respectfully, Sam E. Antar (former Crazy Eddie CFO & convicted felon) Cc: Walter G. Ricciardi (Securities and Exchange Commission) Cc: Roel C. Campos (Securities and Exchange Commission) Cc: Kenneth Israel (Securities and Exchange Commission) Cc: William McKean (Securities and Exchange Commission) Cc: Norman Korb (Securities and Exchange Commission) Cc: Richard Simpson (Securities and Exchange Commission) Cc: New York Anti-Defamation League Cc: San Francisco Anti-Defamation League E-Mail: sam@whitecollarfraud.com Web Site: www.whitecollarfraud.com Blog: www.whitecollarfraud.blogspot.com Confidentiality Notice: The information contained in this electronic mail is confidential information intended only for the use of the entity or individual to whom it is addressed. If the reader of this message is not the intended recipient, you are hereby notified that any dissemination, distribution, retransmission, or copying of this message is strictly prohibited. If you have received the message in error, please notify me immediately by reply transmission. Thank you. Sunday, July 08, 2007 Patrick Byrne, CEO of Overstock.com, Continues his Ugly Campaign of Menace Patrick Byrne has been carrying out his personal vendettas through a smear campaign of lies, distortions, false accusations, innuendos, threats, blackmail, and anti-Semitism on his antsocialmedia.net smear web site, internet message boards, blogs, and Overstock.com’s web site. In particular, Patrick Byrne has used his antisocialmedia.net smear web site, administered by his henchman, Judd Bagley, Director of Communications at Overstock.com, and the InvestorVillage Overstock.com message board to carry out his campaign to silence and discredit his critics by continual harassment, intimidation, and smears. Judd Bagley has colluded with other persons such as Evren Karpak (a contributor to antisocialmedia.net and Overstock.com shareholder) to intimidate critics with threats, blackmail, and smears. In addition, Judd Bagley has colluded with the delusional Edward Manfredonia (an overt anti-Semite and Judd Bagley’s admitted advisor), to use anti-Semitism, false accusations, innuendo and smears to harass critics of Patrick Byrne. Judd Bagley’s, Evren Karpak’s, and Edward Manfredonia’s efforts have received the encouragement, endorsement, and support of Overstock.com CEO Patrick Byrne. Many journalists and bloggers have followed Patrick Byrne’s self styled “Jihad” of harassment, intimidation, threats, blackmail, and smears against his critics on the internet and else where. I have written extensively about about Patrick Byrne’s “Jihad” against critics in this blog. I have pursued Patrick Byrne and his cronies with “deposition style questions” on InvestorVillage only to get kicked off as Patrick Byrne orchestrated a campaign to silence me. Other journalists, bloggers, independent financial analysts, and I have documented Patrick Byrne’s vendettas against his critics and deceptive statements regarding Overstock.com’s financial disclosures. These efforts have resulted in a combination of intimidation, harassment, threats, blackmail, litigation, smears, anti-Semitic comments, false accusations, and innuendos directed at people who dare to expose Patrick Byrne’s activities. The Securities and Exchange Commission is investigating Overstock.com, Patrick Byrne, and others for possible violations of securities laws. Patrick Byrne’s vile and malicious smear campaign against his critics is a violation of Overstock.com’s Code of Business Conduct and Ethics. Patrick Byrne’s vile and malicious actions are in effect waivers or implicit waivers from Overstock.com’s Code of Business Conduct and Ethics and are required by the company to be disclosed in Form 8-K to the Securities and Exchange Commission. Apparently, Overstock.com has not complied with that requirement. Baby steps have been taken by Overstock.com’s Board to reign in Patrick Byrne, since the appointment of Joseph J. Tabacco to Overstock.com’s Board of Directors on June 6, 2007. However, make no mistake about it, Patrick Byrne is a tyrant and a bully CEO unable to handle exposure of his deceptions and smears. His vile efforts in concert with others to deflect from his evil actions still continue. I call on the following independent members of Overstock.com’s Board of Directors, Allison H. Abraham, Clay Corbus, and Joseph J. Tabacco to take steps to fire Patrick Byrne and his Director of Communications, Judd Bagley. Overstock.com General Counsel Jonathan Johnson who has apparently stood idly by as Patrick Byrne and Judd Bagley have engaged in rampant acts in violation of Overstock.com’s Code of Business Conduct and Ethics should be fired, too. Do the independent Board members wish to be associated with the vile and malicious smears and anti-Semitism used by Patrick Byrne, Judd Bagley and their cronies to silence critics? Do they approve of the actions of their evil CEO, Patrick Byrne? So far, their efforts have been piece meal and inadequate to rein him in. If Overstock.com, Patrick Byrne, Judd Bagley believe that my actions constitute libel, then sue me. I welcome the subpoena power that comes from discovery that goes both ways. Truth is always a defense. Under pressure as a result of the fallout from his activities Patrick Byrne is now consolidating his smear campaign against critics on Overstock.com’s web site Retreating from the fallout he has received resulting from his posts on internet message boards in furtherance of his vendettas against critics, Patrick Byrne will no longer be posting any new messages on them. However, he apparently will continue to smear his critics by posting on his home turf, Overstock.com’s web site. On July 6, 2007, in a bitter and rambling response (message number 8555) to a post on InvestorVillage by his antisocialmedia.net smear web site contributor and Overstock.com shareholder, Evren Karpak, a defiant Patrick Byrne sounded somewhat delusional about the inquiries that he received from his own Board of Directors and the Securities and Exchange Commission into his activities and the activities of his cronies acting in concert with him on stock message boards. For example, Patrick Byrne wrote: Re: Hannibal has left the building ….And no, this decision was completely my own. As always, the bad guys display their total misunderstanding of reality: no one has brought the least pressure on me about my posting here (well, other than by a certain polite and proper government official, who politely and properly asked me why I post on message boards: I politely noted that the first amendment applies to me, too). And no, no one on this end cares a whit about the lengthy posts and laughable emails sent over and over to the board of directors in a fashion so laughable they dispel any doubt as to the clownishness of their author. They are serious people, they know the system is corrupt, and the incessant deposition-style posts and emails from a “hobbyist” (coupled with the cronyism from guys like Herb) are just additional proof of what I have been saying. As if further proof were needed at this point…. Note: Bold print and italics added by me. However, Patrick Byrne has minimized and belittled the impact my activities and other persons to stop his ugly actions by our alerting his Board of Directors and the Securities and Exchange Commission. Patrick Byrne claims that “no one on this end cares a whit about the lengthy posts and laughable emails sent over and over to the board of directors in a fashion so laughable they dispel any doubt as to the clownishness of their author.” We must ask, is Patrick Byrne lying or does Overstock.com’s Board of Directors consider his vendettas against his critics a joke? In his post, Patrick Byrne claimed that he was in San Francisco. Two outside directors, Joseph J. Tabacco Jr, and Clay Corbus have their offices there. Did Patrick Byrne meet Mr. Tabacco and Mr. Corbus in San Francisco? Patrick Byrne claims that Overstock.com’s Board of Directors does not care about information related to his open violation of the company’s Code of Business Conduct and Ethics. Apparently either Patrick Byrne is a liar or Overstock.com’s Board of Directors believes that his violations of Overstock.com’s Code of Business Conduct and ethics is a joke. Examine the timeline below, for evidence that Overstock.com’s Board of Director and management, once confronted with the vile and malicious acts of Patrick Byrne and his cronies, took certain minimal actions to contain some of the damage to Overstock.com. May 15, 2007: Acting on a suggestion by an anonymous reader known to me as Philosifur, about potential Sarbanes-Oxley issues, I obtained a copy of Overstock.com’s Code of Business Conduct and Ethics and made it available for download in my blog post entitled, “Overstock.com: A Copy of its Code of Business Conduct and Ethics.” Note: Overstock.com’s Code of Business Conduct and Ethics is not published on Overstock.com’s web site and can only be obtained by writing a letter to the company. It’s a wonder that Patrick Byrne uses Overstock.com’s web site to smear his critics while his company does not post its Code of Business Conduct and Ethics there. May 16, 2007: I questioned Patrick Byrne about his failure to comply with Overstock.com’s Code of Business Conduct and Ethics in a blog post entitled, “To Patrick Byrne, CEO of Overstock.com – Did you comply with the Company’s Code of Business Conduct and Ethics.” May 17, 2007: I asked additional questions to Patrick Byrne about his failure to comply with Overstock.com’s Code of Business Conduct and Ethics in a blog post entitled, “To Patrick Byrne, CEO of Overstock.com: More Questions about the Company’s Code of Business Conduct and Ethics.” Around May 28, 2007: The delusional Edward Manfredonia’s posts containing anti-Semitic remarks, false accusations, and smears are deleted from antisocialmedia.net. See my blog post from June 8, 2007, entitled, “Open Letter to the Audit Committee of Overstock.com: About how Patrick Byrne’s vindictive smear campaign uses threats and anti-Semitism,” and June 18, 2007, entitled, “Who is Judd Bagley trying to fool about the use of anti-Semitism to attack critics of his boss, Overstock.com CEO Patrick Byrne?” To download a copy of the delusional Edward Manfredonia’s anti-Semitic comments, false accusations, and smears on antisocialmedia.net, click here. May 28, 2007: After creating an account using the alias Hannibal on Overstock.com’s Omuse web site, Patrick Byrne copies his posts on InvestorVillage to Overstock.com’s web site. His comments contain threats, smears, and links to antisocialmedia.net May 30, 2007: My blog post entitled, “Open Letter to the Audit Committee of Overstock.com: The Company’s Code of Business Conduct and Ethics and actions of Patrick Byrne and others,” discussed the responsibilities and duties of Overstock.com’s Audit Committee regarding violations of Overstock.com’s Code of Business Conduct and Ethics. I sent an e-mail containing a link to my blog post to Overstock.com’s Board of Directors. June 3, 2007: My blog post entitled, “Memo to Judd Bagley: Director of Communications at Overstock.com – About Threats on AntiSocialMedia.net,” asked Judd Bagley why he has permitted a threat to “hurt” investigative reporter, blogger, and Byrne critic Gary Weiss by a reader identified as alpineanalytics to continue to remain posted on antisocialmedia.net from September 10, 2006. The comment said: alpineanalytics wrote: “Gary Weiss is PATHETIC…his books suck …he is a weasel. In fact, there are quite a few people out there that are going to make an example out of him. He should be looking over his shoulders more carefully when he wants to engage in disrespectful behavior with people that will hurt him…economically, emotionally, and probably physically. Hey Gary…Louie P and Benny S. say hi…you $cumbag.” Posted 10 Sep 2006 at 8:36 am Note: Bold print and italics added by me. I sent an e-mail containing a link to my blog post to Overstock.com’s Board of Directors. June 4, 2007: In a blog item entitled, “Open Letter to the Audit Committee of Overstock.com: Patrick Byrne denies using private eyes,” I discussed certain deceptive statements by Patrick Byrne relating to his denial of using private investigators. June 6, 2007: Joseph J. Tabacco joined Overstock.com’s Board of Directors. June 6, 2007: In an apparent act of retaliation by Patrick Byrne and Judd Bagley, new anti-Semitic remarks and smears are posted on antisocialmedia.net by Edward Manfredonia. According to Judd Bagley, Edward Manfredonia’s comments which were time stamped and submitted on June 6, 2006 at 5:25 AM were not posted until June 7, 2007 which indicates that Judd Bagley had his moderation feature for comments enabled. Therefore, Judd Bagley apparently reviewed Edward Manfredonia’s new anti-Semitic remarks and smears before publishing them. June 7, 2007: I alerted attorney Howard Sirota about Edward Manfredonia’s anti-Semitic remarks and smears on antisocialmedia.net. June 8, 2007: Howard Sirota wrote an e-mail to new board member, Joseph J. Tabacco Jr: Dear Joe, While I think you’ll end up regretting your decision to join the Board of Overstock.com, that’s really your own business. I’m sure that you are unaware that someone named Edward Manfredonia is posting anti-semitic comments on www.antisocialmedia.net run by Judd Bagley, who works for Overstock.com. Now you are on actual notice of the anti-semitic website run by an employee of the public company of which you are a Director. I expect you to make inquiry and take immediate corrective action. If not, the ADL and I will do it for you. This is NOT about any short-selling controversy. I have no position in OSTK. This is about anti-semitism, which I won’t countenance. Neither would the Joe Tabacco I knew. Make it stop! Regards, Howard Note: Bold print and italics added by me. June 8, 2007 (next): Joseph J. Tabacco Jr. replied to Howard Sirota’s e-mail: Thanks Howard, I will look into this, you are correct this is not something obviously that I had been aware of. Note: Bold print and italics added by me. June 8, 2007 (next): Edward Manfredonia’s latest anti-Semitic comments and smears are removed from antisocialmedia.net. June 8, 2007 (next): I post a blog item entitled, “Open Letter to the Audit Committee of Overstock.com: About how Patrick Byrne’s vindictive smear campaign uses threats and anti-Semitism,” I discussed the publishing of physical threats, anti-Semitic comments and smears on antisocialmedia.net. June 8, 2007 (next): Howard Sirota posted a comment on the Yahoo Overstock.com message board deploring anti-Semitic comments on that board. June 8, 2007 (next): I forward a link to my blog post entitled, “Open Letter to the Audit Committee of Overstock.com: About how Patrick Byrne’s vindictive smear campaign uses threats and anti-Semitism,” in an e-mail addressed to: Howard Sirota and Cc’d to Joseph J. Tabacco Jr, Michael Callahan (Yahoo General Counsel), the New York Anti-Defamation League, and the San Francisco Anti-Defamation League. That e-mail discussed the use of anti-Semitism by Patrick Byrne. June 11, 2007: In a blog post entitled, “Piling absurdity upon absurdity,” Judd Bagley posted poor lies, excuses, and deflection about the publishing of Edward Manfredonia’s anti-Semitic comments on antisocialmedia.net. He belittled Howard Sirota for posting a message on Yahoo deploring anti-Semitism. June 12, 2007: Evren Karpak, a contributor to antisocialmedia.net and an Overstock.com shareholder, carries out part of the threat in a comment published on antisocialmedia.net by alias alpineanalytics to “hurt” Gary Weiss “economically.” In a post (message number 8042) on InvestorVillage, Evren Karpak stated that he had written letters to three of Gary Weiss’s publishers: Forbes, SeekingAlpha.com, and Salon.com in an effort to have them discontinue business ties with Mr. Weiss. June 12, 2007 (next): Judd Bagley had posted a recommendation to Evren Karpak’s post on InvestorVillage where he carries out a threat to “hurt” Gary Weiss economically by contacting his publishers. That post on InvestorVillage still remains published. June 14, 2007: Judd Bagley attempts to silence blogger and antisocialmedia.net critic Scipio Africanus through blackmail. Judd Bagley sent the following e-mail to blogger, Scipio Africanus: From: Judd Bagley To: scipioafricanus_iv@yahoo.com Sent: Thursday, June 14, 2007 11:51:26 PM Subject: just thought I’d ask… I thought I should tell you that I’ve have known your real identity for a while now. Up until last week, it appeared that you’d grown tired of o-smear and all the games (which would make “outting” you unnecessary) but lately it appears that’s not the case. I don’t want to cause anybody unnecessary harm, but I’m beyond tired of the lies. If you choose to continue as you have been, I will write about you on AntiSocialMedia.net. In doing so, my goal is not to intimidate, but to let you own your words; under those circumstances, I think the lies will take care of themselves. Having said that, I’m also very much aware of the impact this could have on your reputation, especially where you live, and I feel obligated to offer you a way out. So, if you’re ready to set things right, I’ll keep your name to myself and figure we’ll both be karmically better off for it. I look forward to your response (and will be PMing this to your IV account, as well). Judd Bagley Note: Bold print and italics added by me. June 16, 2007: Judd Bagley posts Scipio Africanus’ real identity on antisocialmedia.net a post entitled, “Hoosier daddy? ScipioAfricanus uncovered in Indiana,” on antisocialmedia.net. According to Judd Bagley, Scipio Africanus is identified as Albert Kidd. He includes the following warning to Albert Kidd: However, if in responding, ScipioAfricanus or any of his allies should question the veracity of these claims, the evidence will be presented, and Albert can deal with the consequences. Note: Bold print and italics added by me. June 17, 2007: Blogger and internet sleuth, Scipio Africanus refuses to back down. Scipio Africanus posts Judd Bagley’s threat (above) on his O-Smear blog and responds: Since the only way to damage my reputation would be to make up a bunch of stories about me, I’ll assume that’s what he means. Duly noted and recorded. As far as pointing out all the deception, spyware, etc. I’d put that stuff on my resume. The SEC and the Overstock Board of Directors (so they can’t play dumb) got a copy of that one. Note: Bold print and italics added by me. June 17, 2007 (next): Later, Evren Karpak, an Overstock.com shareholder and antisocialmedia.net contributor, threatens Scipio Africanus with blackmail on InvestorVillage. Evren Karpak chimes in by posting the following message (number 8205) on InvestorVillage: Scipio / Al Kidd still has one chance. He missed a few others, culminating in his mug being featured on ASM. I hope he does the right thing. I really do because what will come down on him if he chooses not to is not a fate I’d wish on anyone. Okay, maybe Gary Weiss. Evren Note: Bold print and italics added by me. June 17, 2007 (next): Judd Bagley posts a recommendation to Evren Karpak’s blackmail attempt, above, on InvestorVillage. June 17, 2007 (next): In a post (message number 8223) on InvestorVillage, using his alias De Daumier-Smith, Judd Bagley bids farewell to InvestorVillage: As it is, this will likely be my farewell post on this board. June 18, 2007: I respond to Judd Bagley’s lies and deflection on antisocialmedia.net concerning his relationship and collusion with Edward Manfredonia in a blog post entitled, “Who is Judd Bagley trying to fool about the use of anti-Semitism to attack critics of his boss, Overstock.com CEO Patrick Byrne?.” In that blog post, I outline Patrick Byrne’s use of threats, anti-Semitism, and smears to harass his critics. June 24, 2007: Antisocialmedia.net smear web site contributor, Evren Karpak, who has been posting messages on Yahoo under his alias evren60615, pursues Scipio Africanus on the Yahoo Overstock.com message board: You call? Very simple, then. Respond to this message and violate the condition ASM has set on not revealing what he has. Make your denial. Note: Bold print and italics added by me. June 24, 2007 (next): Shortly afterwards, I notified Overstock.com’s Board of Directors and its Audit Committee about the Bagley – Karpak collaboration. I wrote the following e-mail to the Board of Directors on Overstock.com and its Audit Committee: To the Board of Directors of Overstock.com and its Audit Committee: Are you aware that Judd Bagley (Director of Communications at Overstock.com) is colluding with Evren Karpak (Overstock.com shareholder and antisocialmedia.net contributor) to black mail the person known as Scipio Africanus? The use of blackmail by Judd Bagley and others working in collusion with him violates Overstock.com’s Code of Business Conduct and Ethics. You are now on notice. Respectfully, Sam E. Antar (former Crazy Eddie CFO & convicted felon) Cc: Kenneth Israel (Securities and Exchange Commission – Utah) William McKean (Securities and Exchange Commission – Utah) Note: Bold print and italics added by me. June 24, 2007 (next): About a couple of hours later, Evren Karpak’s threat to Scipio Africanus disappears from Yahoo. However, his threat on InvestorVillage remains published. June 24, 2007 (next): All of a sudden a mysterious denial of service attack is claimed by Judd Bagley on antisocialmedia.net. Later that evening, Judd Bagley claimed on antisocialmedia.net: AntiSocialMedia.net currently under a denial of service attack, which may account for inconsistency in page-load times. Sorry. I noticed no denial of service attack as I visited antisocialmedia.net many times. Other false accusations, threats, and smears published in comments posted by other persons to Judd Bagley’s posts on antisocialmedia.net disappear including the threat to Gary Weiss disappear and remain unpublished today. June 26, 2007: I sent another e-mail to Overstock.com’s Board of Directors and its Audit Committee: To the Board of Directors of Overstock.com and its Audit Committee: Posting personal information of critics of Patrick Byrne on antisocialmedia.net You are alerted that antisocialmedia.net continues to post certain personal information of individuals (critics of Patrick Byrne) including the home addresses. http://antisocialmedia.net/pmwiki/pmwiki.php?n=Main.JohnLichtenstein I had previously alerted Judd Bagley about this issue in an exchange on the Yahoo message board while he posted under the anonymous alias antsaresocialinsects….. Such activities violate Overstock.com’s Code of Business Conduct and Ethics. Respectfully, Sam E. Antar Cc: Kenneth Israel (Securities and Exchange Commission – Utah) Cc: William McKean (Securities and Exchange Commission – Utah) Note: Bold print and italics added by me. June 26, 2007: A few hours later, the personal information of two Byrne critics that was posted antisocialmedia.net disappeared. June 28, 2007: I sent the following e-mail: To the Board of Directors of Overstock.com and its Audit Committee: Patrick Byrne, the CEO of Overstock.com, is now copying his InvestorVillage.com posts to Overstock.com’s web site. Link here: http://omuse.overstock.com/wiki/User:Hannibal Certain messages encourage people to read antisocialmedia.net and contain links to that web site. It is very apparent that Patrick Byrne has encouraged and approved of Judd Bagley’s activities on antisocialmedia.net and is now using the Overstock.com’s web site to direct traffic to antisocialmedia.net…. Note: Bold print and italics added by me. Since, that information can still be found on Overstock.com’s web site, I guess they decided that it is alright for Overstock.com to support antisocialmedia.net. July 1, 2007: Patrick Byrne sets up a new blog on Overstock.com’s Omuse web site. Patrick Byrne copies his posts on InvestorVillage to Overstock.com’s web site. His comments contain threats, smears, and links to antisocialmedia.net. July 6, 2007: Patrick Byrne announces on InvestorVillage that he will not be posting on internet message boards and will consolidate his smear campaign against critics on Overstock.com. Patrick Byrne praises his antisocialmedia.net contributor, Evren Karpak, who has used threats, smears, and blackmail in various messages posted over the internet against Byrne critics in his farewell post on InvestorVillage: Evren – Ditto. You are a deep guy, and write beautifully. It is hard to believe that English is a second language for you, as you write better than 99.99% of those to whom it is a first…. Note: Bold print and italics added by me. Previously, Patrick Byrne had expressed disappointment that his smear campaign on internet message boards might be perceived as separated from his role as CEO of Overstock.com On April 1, 2006, on Overstock.com’s web site, Patrick Byrne had discussed his reasons for taking his “act” to the Motley Fool message board for Overstock.com: Dear O-Auctions Community, It has been a year since I wrote here. I apologize. I have been busy, but that was not the real reason I stayed away. I decided to take my act to a more public forum, and also, to distance my crusade from my role as president of Overstock. So I left here and moved over to Fool.com. I have been in and out of Fool.com, sometimes taking a month or two off, but pretty much sticking there. Also, I have been doing a lot of behind-the-scenes writing that you occasionally see pop up in other blogs. That was all a mistake. I wish I had just stayed here, if for no other reason than nobody separates my role as president of Overstock.com from my attempt to reform the market. Note: Bold print, italics, and underlining added by me. Patrick Byrne consolidates his smear campaign to Overstock.com’s web site In his bitter, defiant, and ranting farewell post on InvestorVillage, on July 6, 2007, Patrick Byrne writes: For all of these reasons I decided to create my own blog on Omuse and funnel into it all the previous work that I could find from these various forums. I’ll come back here from time to time, reading, when I get a chance, but intend to write mostly on my blog, hoping that what I write gets reposted here. When it is up and running smoothly, those that want can even migrate there, where there will be a 0 Tolerance rule for miscreants. Evren had it right: not much will change in practice, and of course, I will come back on occasion, if only to dispel rumor mongering of miscreants. Note: Bold print and italics added by me. Patrick Byrne and his various cronies acting in collusion have used anti-Semitism on the internet to harass and intimidate critics In two previous posts on this blog, entitled, “Open Letter to the Audit Committee of Overstock.com: About how Patrick Byrne’s vindictive smear campaign uses threats and anti-Semitism,” and “Who is Judd Bagley trying to fool about the use of anti-Semitism to attack critics of his boss, Overstock.com CEO Patrick Byrne?,” I described the use of anti-Semitism by Patrick Byrne and Judd Bagley sometimes acting in concert with Edward Manfredonia on antisocialmedia.net, InvestorVillage, and Motley Fool as tool of Byrne’s smear campaign against critics and others. Patrick Byrne (CEO of Overstock.com) compares InvestorVillage to the British Parliament In another blog post here, entitled, “InvestorVillage is the place for Overstock.com CEO Patrick Byrne, his henchman Judd Bagley, and their cronies,” I described how InvestorVillage is a place that permits penny stock promoting, cyber stalking, anti-Semitic comments, threats and/or blackmail by either Patrick Byrne (CEO of Overstock.com), Judd Bagley (Director of Communications at Overstock.com) Evren Karpak (contributor to Overstock.com’s antisocialmedia.net smear web site, and the delusional Edward Manfredonia (an advisor to Judd Bagley). Patrick Byrne compares InvestorVillage, which continues to stubbornly refuse to delete anti-Semitic comments by its participants, with the British Parliament. InvestorVillage, in an act of defiance, still has not deleted anti-Semitic comments and smears posted on its web site by the delusional Edward Manfredonia (an advisor to Judd Bagley, Director of Communications at Overstock.com) since I notified them several times via e-mail on Thursday, May 31, 2007 and Friday, June 1, 2007. On June 1, 2007, Patrick Byrne (CEO of Overstock.com) endorsed InvestorVillage in his new blog on Overstock.com’s web site. He wrote: Because Fool.com went the way of Yahoo (that is, massive clogging with gibberish of shills), I (as you will have read below) switched from Fool to investorVillage (for those interested in stock message boards regarding any company, I recommend InvestorVillage: as civilization-scores go, Yahoo is a jungle, Fool is now the Wild West, but the InvestorVillage board is the British parliament). Note: Bold print and italics added by me. To download a copy of the delusional Edward Manfredonia’s anti-Semitic comments, false accusations, and smears on InvestorVillage, click here. Patrick Byrne has used InvestorVillage to encourage readers to post smears on his antisocialmedia.net smear web site that is administered by Judd Bagley (Director of Communications at Overstock.com) For example, on March 4, 2007, in a post (message number 5236) on InvestorVillage Patrick Byrne had encouraged other message board participants to comment on his antisocialmedia.net smear web site that is administered by Judd Bagley (Director of communications at Overstock.com): About AntiSocialMedia.net The unique strength of social media (another term for peer-generated, web-distributed content) is also its unique weakness: the fact that anybody can get involved. AntiSocialMedia.Net seeks to hold accountable those who abuse the power of social media for personal gain. Our mandate is broad but our scope, as you’ll read, is less so: focusing primarily on the use of social media as a tool in support of illegal stock manipulation efforts. The principal editor of this website is employed by one of the many companies mentioned in these pages, but is not a shareholder and receives no support whatsoever from his employer. Please use the comment feature or email to submit tips or additional information. Note: Bold print and italics added by me. Blogger and antisocialmedia.net critic known as, Scipio Africanus, who Judd Bagley and his associate Evren Karpak, attempted to silence to a blackmail attempt responded to Patrick Byrne A day later, in a post (message number 5291) on InvestorVillage, Scipio Africanus wrote: A mandate generally implies acting upon instructions or orders given by others. Who issued the mandate? Is there any significance that this “mandate” was not revealed until January 13, 2007? (Note that is the same day this ASM article was published and the paragraph above was originally part of that article.) Note: Bold print and italics added by me. Judd Bagley, in his attempt to blackmail Scipio Africanus in collusion with antisocialmedia.net contributor Evren Karpak, Bagley makes it clear that antisocialmedia.net’s mandate is from Patrick Byrne On May 13, 2007, in a post (message number 7306) on InvestorVillage, under his alias De Daumier-Smith, Judd Bagley wrote: This is going to get very interesting, very quickly, folks. To quote Patrick, I’m going to do Scipio “slow.” Note: Bold print and italics added. Other actions by Judd Bagley make it clear that he takes instructions from Patrick Byrne and Overstock.com Investigative reporter, blogger, and Byrne critic, Gary Weiss who is a target of Patrick Byrne’s vendetta against the financial media, wrote in a blog item entitled, “Is the Overstock.com Board Rousing From its Slumber?,” wrote: Sam, you see, has been in touch by email with the Overstock board of directors concerning ASM. And as you can see from the post, one of Sam’s emails quite obviously led to the deletion of some particularly vile reader comments from ASM, including a physical threat against myself from operators of Alpine Analytics that I have previously written about. Note: Bold print and italics added by me. My blog post that Gary Weiss was referring to above was entitled, “InvestorVillage is the place for Overstock.com CEO Patrick Byrne, his henchman Judd Bagley, and their cronies.” I have written extensively about the flimsy wall of separation that Patrick Byrne has concocted between Overstock.com and antisocialmedia.net in my blog posts here entitled, “Don’t Mess with Overstock.com CEO Patrick Byrne” and “The Deceptions of Patrick Byrne (CEO of Overstock.com) and Judd Bagley (Director of Social Media at Overstock.com).” Apparently Patrick Byrne has no issue with anti-Semitic comments, delusional Jewish conspiracy theories, and smears being posted on his antisocialmedia.net web site On March 8, 2007, four days after Patrick Byrne solicited smears for antisocialmedia.net in his post on InvestorVillage; Edward Manfredonia had posted the following anti-Semitic comments, smears, and delusions in a long winded rant antisocialmedia.net: Several years ago I began to write that Gary Weiss had lied about the murders of Al Chalem and Maier Lehmann. Weiss attributed these murders to the Italian Mafia. Weiss knew that Chalem and Lehmann had been murdered by the Russian Mob. What is important to note that after I had posted that Weiss had lied about the murders of Chalem and Lehmann, Floyd Schneider, under the psuedonym The Truthseeker, posted on a message board, I believe that it was Silicaon Investor, a long article. This article delineated Chalem’s Mafia contacts. But Floyd Schneider did not write the article. This article was written in the turgid, constipated style of Gary Weiss. This is important for several reasons. The first is that it is painfully obvious that Floyd Schneider does not author his own scribblings- except for short moronic messages that he posts on message boards. The second is that Floyd Schneider is obviously fronting for individuals, who have a specific agenda. In this instance it was Gary Weiss, who lied about the murders of Chalem and Lehmann. In other instances Schneider is fronting for short sellers. While Al Chalem had previously had connections with the Italian Mafia, Lehmann refused to have anything to do wth the Italian Mafia. Lehmann’s partners in his stock frauds were Orthodox Jews, many of whom, such as Feivel Gottlieb, were members of his synagogue. This was known to Gary Weiss, a great defender of Israel, and to Weiss’ editor, Seymour Zucker. Seymour Zucker and Feivel Gottlieb belonged to the same Talmud study group. Seymour Zucker knew that Feivel Gottlieb was involved in the stock frauds of Maier Lehmann. Zucker knew that Gottlieb had earned millions in the stock frauds of Maier Lehmann, who was descended from a long line of Rabbis. Weiss knew of the involvement of Orthodox Jews in the stock frauds of Maier Lehmann, but Weiss refused to expose the stock frauds of Maier Lehmann because Weiss would have been compelled to expose the involvment of an entire Orthodox synagogue in the stock frauds of Maier Lehmann. Better to attribute the murders of Chalem and Lehmann to the Italian Mafia- and obtain a book contract. (Even though the book bombed.) 60 Minutes would never have Weiss appear if Weiss were to attribute the murders of Chalem and Lehmann to the Russian Mob, which was created by the Jackson-Vanick Act. Every parent, whose child uses ecstasy, can thank the Russian and Israeli Mobs for their child’s drug abuse. And this was stated by the State Department several weeks ago. Respectfully submitted, Edward Manfredonia Note: Bold print and italics added by me. Additional vile anti-Semitic comments, false accusations, and smears were posted by the delusional Edward Manfredonia over the next few months on antisocialmedia.net, InvestorVillage, and Yahoo. At least, Yahoo has taken action to delete anti-Semitic comments without making up excuses. InvestorVillage stubbornly refuses to delete Edward Manfredonia’s anti-Semitic comments and smears despite repeated requests. To download examples of the delusional Edward Manfredonia’s anti-Semitic comments, false accusations, and smears on antisocialmedia.net, click here. Judd Bagley has defended Edward Manfredonia anti-Semitic comments, false accusations, and smears and praised him as a knowledgeable advisor The delusional Edward Manfredonia had posted vile and malicious anti-Semitic comments, false accusations, and smears in an orgy of posts on antisocialmedia.net and InvestorVillage directed at Manhattan District Attorney Robert Morganthau, Judge Michael D. Stallman, Gary Weiss, me and others. On April 2, 2007, in a post (message number 6052) on InvestorVillage.com using his alias De Daumier-Smith, Judd Bagley defended the delusional Edward Manfredonia’s anti-Semitic comments, false accusations, and smears: …Ed may have a quirky way of communicating in writing, but I can assure you he’s one of the more knowledgeable people I know. Ed has been enormously generous in sharing his knowledge of how Planet Wall Street works (both in theory and in practice) with me. Note: Bold print and italics added by me. A supporter of Patrick Byrne had boasted in a post (message number 5943) on InvestorVillage that Judd Bagley had “many lengthy conversations” with Edward Manfredonia: This was Judd’s reply to me when I asked him about Mr. Manfredonia. Judd, sorry about posting a PM, but I felt in this case it was warranted. “I have had MANY lengthy conversations with Ed. He is a very good and principled man. But he seriously lacks the ability to communicate effectively. ” Note: Bold print and italics added by me. Patrick Byrne says he is an avid reader and raving fan of antisocialmedia.net On January 31, 2007, in a post (message number 4287) on InvestorVillage.com, using his alias Hannibal, Patrick Byrne wrote that he is “an avid reader and raving fan” of antisocialmedia.net. Note: Bold print and italics added by me. Patrick Byrne shares the same delusional theories as Edward Manfredonia Jeff Matthews, in a blog item entitled, “Conspiracy of the Jews?-Part II,” wrote: The interview took place on Friday December 16th, and it lasted for an hour and a half. (You can listen to it at a speeded-up rate in far less time on the CFRN web site). In the midst of the usual paranoid-sounding diatribe against the so-called naked short-selling scandal, Byrne is encouraged to get specific about the root causes of the problem. The host asks: “Are we dealing with the traditional old-boy network or has organized crime gotten involved?” To this, Patrick Byrne says the following, and I quote him: “Every rabbit hole you go down leads to either [sic] the Italian mob, the Russian mob or the Israeli mob, and nobody’s ever asked about that, and I haven’t pressed the issue…but every rabbit hole you go down you end up in one of those three places…. “The Israeli mob and the Russian mob are the two ones [sic] who scare me.” Those are the words of Patrick M. Byrne, CEO of Overstock.com. I am not making them up. Byrne goes on to discuss, briefly, the “Russian mob” as a kind of band of marauders who perpetrate scams and then retreat to their “dachas” on the Caspian Sea for a break before the next scam. He elaborates in far greater detail on the nefariousness of the so-called “Israeli mob”: “If you Google ‘ecstasy Israeli mafia’ you’ll find articles that basically the Israeli mob…is thought to control 75% of the ecstasy trade in the United States.” Now, as with Byrne’s bringing up Thomas Friedman’s supposed pro-Israel tendencies in a Motley Fool rant, I find it hard to understand how Israel’s supposed domination of the ecstasy trade in the United States relates to naked short-selling on the U.S. stock exchanges. But let’s assume, for a minute, that it does. And let’s do exactly what Patrick Byrne says: let’s Google ‘ecstasy Israeli mafia’ and see what we come up with. Okay, I Googled the phrase and I got 30,600 results in 0.16 seconds. Hmmm. Patrick Byrne appears to be right: when you type in those three words, you get articles that-this is incredible-accuse Israel of controlling the U.S. ecstasy trade! Let’s look at the first page, one link at a time. The first two links are to the web site of an author touting a book he wrote about the rise and fall of an Israeli kingpin in the ecstasy trade, but he doesn’t particularly focus on the Israelis-as-uber-mobsters angles that Patrick says “scare me.” The third listed link resulting from this Google search recommended by Patrick Byrne-and I am not making this up-is to the web site of Al Jazeera. Yes, you have it right: that Al Jazeera. Note: Bold print and italics added by me. After all, Patrick Byrne has termed his so-called campaign against naked short-selling as a “Jihad.” Recently, he has now mockingly called his so-called campaign against naked short selling a “mitzvah” On June 24, 2007 after the fall out resulting from new anti-Semitic comments posted on antisocialmedia.net that were deleted at Board member Joseph J. Tabacco’s request, Patrick Byrne commented on Overstock.com’s web site: I know from your emails that many of you are following my Mitzvah…. “Mitzvah” is a Hebrew word meaning (as I was taught, anyway) “obligatory good deed”. For example, the “Ten Commandments” of the Old Testament are actually the ten Mitzvahs in the original (the word shows up in “Bar Mitzvah” and “Bat Mitzvah” as well). While at times my battle against Wall Street has been termed a “Jihad” (though I honestly do not remember who used that first, myself or my opponents), and later I called it a “Crusade,” more recently I have settled on “Mitzvah” as the best term, as my actions pring less from any fervor, passion, or desire than they do from a sense of obligation. Normal humans, when they see ordinary people getting kicked by powerful bullies, feel an obligation to intervene. Doing so seems to be the Mitzvah that has been thrust upon me of late. Note: Bold print and italics added by me. A “friend” and business associate of Patrick Byrne, claiming to be a Rabbi, attempts to defend him on InvestorVillage On June 26, 2007, in a post (message number 8411) on InvestorVillage, using the alias mayerrice, Mayer Gniwisch wrote: Well, to be honest, I am not a writer, however I will try and express my thoughts to you on this issue. I will put my Rabbi hat on, and speak now as a Rabbi… My job is not to look for Patrick’s fault. I am a friend of his who saw people talk of him as an anti-Semite and felt responsible to speak up. What I’ve learnt as a Rabbi is, never judge your fellow man until you are in his shoes and you know all the details. Which in short means never, because what we see in others is a mere reflection of ourselves. Note: Bold print and italics added by me. In that same post, he went on to describe his business relationship with Patrick Byrne. Now I will put on my www.ice.com diamond maven’s hat. The diamond deal had all the potential to be a grand slam home run. Other issues at the company, issues that affected all of the company caused the deal to be only a bunt. Note: Bold print and italics added by me. While his job was “not to look for Patrick’s fault,” Mayer Gniwisch had no problem looking at the fault of others and judging them by calling them names On June 28, 2007, in a post (message number 13025) on Motley Fool, Mr. Rice wrote: I will say it again. I am not here to judge people. If Patrick does it, that is his issue to deal with. I must say that you guys are a bunch of “Yentas”. Note: Bold print and italics added by me. On July 3, 2007, in a post (message number 13103) on Motley Fool, Mr. Rice wrote: You are right I was judging you, Sorry! Shalom to you all. In his next post (message number 13104) on Motley Fool, Mr. Rice writes: Yes, Spreading Lashon Hara that someone is an anti Semite is worse than being a Yenta. The beat goes on Less than 24 hours after his farewell post on InvestorVillage, Patrick Byrne was back posting a new message (number 8588) smearing New York Times columnist, Joe Nocera. Shortly, Overstock.com’s Board of Directors and its Audit Committee should be meeting to approve the release of the company’s second quarter numbers. Let’s see if they sign off on Overstock.com’s disclosures to the Securities and Exchange Commission and take appropriate action against Patrick Byrne and his cronies. Written by, Sam E. Antar (former Crazy Eddie CFO & convicted felon) Posted by Sam E. Antar at 1:22 AM Labels: Anti-Semitism, Edward Manfredonia, Evren Karpak, Judd Bagley, Overstock.com, Patrick Byrne, Securities and Exchange Commission

Posted: Sun Jul 08, 2007 9:09 am Post subject:

Sam writes now to suggest that I withheld some key component of his argument. No doubt it is that one piece that would have made it all fit together into one tight, cohesive package: I would not know as I really do nothing more than glance at his emails for title, length, and rant-factor. Just to give him the benefit of the doubt, though, I have inserted a link to it in the posting above, and reproduce that link here:http://www.whitecollarfraud.com/files/26805346.pdfPatrick PS I would not normally repost something from another message board, but these two responses on investorvillage are priceless. Msg: 8596 of 8597 7/8/2007 9:26:12 AM Recs: 0 Sentiment: Not Disclosed By: evren Send PM Profile Ignore Recommend Add To Favorites Posted as a reply to msg 8595 by Hannibal Re: Crazy Sam Struts His Stuff Crazy Eddie’s prices may be insane but his cousin, apparently, is certifiable. I read every third sentence and laughed as hard as I have in a long time. All I can think of is, Borat is making a sequel and we all just got punked. Okay, where are the cameras? Msg: 8597 of 8597 7/8/2007 10:02:02 AM Recs: 0 Sentiment: Not Disclosed By: HANGMAN COMING Send PM Profile Ignore Recommend Add To Favorites Posted as a reply to msg 8595 by Hannibal Re: Crazy Sam Struts His Stuff Oh how desperate is he getting? Sam,you used to rant about the accounting practice,nothing there,now you rage about free speech trying to quell others,you protest way to much,of course we know you have absolutly nothing to lose here,right?and we know your just a concerned overstock investor,right?

iVillage appearance

Patrick Byrne — Sat, 07 Jul 2007 06:46:11 +0000

Posted: Fri Jul 06, 2007 11:46 pm
Post subject: ivillage appearance

Hi. I just did an appearance on NBC’s ivillage show from Orlando. I hope you enjoy.

http://video.ivillagelive.com/player/?id=0#videoid=123961

Best,
Patrick

Mitzvahs and A News Story You Must Read at MN1.com

Patrick Byrne — Sun, 24 Jun 2007 19:38:37 +0000

Posted: Sun Jun 24, 2007 12:38 pm
Post subject: Mitzvahs and A News Story You Must Read at MN1.com

Short version: visit these two links.

http://feeds.mn1.com/brookstreet_flabbergasted_after_liquidation_news.htm http://75.126.3.206/mp3/John_gittle_062207.mp3

Long version: Dear readers.

I know from your emails that many of you are following my Mitzvah*. To bring new readers up to speed: I believe there is a crack in our financial system (”naked short selling”) that has been manipulated by powerful financial elites in order to drain countless billions out of the savings of Americans; that the regulators charged with protecting Main Street from Wall Street have been captured by the interests they were supposed to be policing; and that the mainstream financial press are such lapdogs of the financial industry that they have not only failed to cover this scandal, some journalists have actually taken part in the cover-up. As a result, I think this country is at serious risk of seeing its financial system implode. As this situation becomes apparent to the public, either through the few honest investigative journalists (e.g., Bloomberg, Forbes.com) who are figuring it out, or through a financial collapse, then it will be the Yorktown of the 2.0 Revolution. (To learn more background, click here: http://www.overstock.com/cgi-bin/d2.cgi?SEC_IID=25194&PAGE=staticpopupfull&sta_id=11150&TRACK=FOOT_OI_L9 )

Events of potentially seismic significance occured this week. The chain of events has three links:

1) Bear Stearns, one of the so-called “Bulge Bracket” Wall Street banks (which, I have alleged in a lawsuit, stands at the center of this activity), has two hedge funds with deep exposure in a type of investment called a “CMO”. The details of CMO’s can be learned elsewhere, but the main event is, they are investments that track the nation’s housing industry. That industry is in a horrific downturn, and the CMO’s are losing their value. Thus, Bear Stearns’ hedge funds gushed losses to the point that other Wall Street firms with which they do business began pulling their credit and threatening to dump their collateral (personally, I suspect that most of Wall Street has exposure to the same problem, so this threat was like a bunch of bullies standing in a garage in an inch of gasoline threatening to throw lighted matches at each other). Technically Bear Stearns could walk away from its own hedge fund and let it collapse, but that would ruin them in the industry. So they have promised to inject $3.2 billion of their own money, or about 1/3 of the net worth of the mighty Bear Stearns, to keep their own hedge fund afloat and stop a run on the bank. Incidentally, that was all to save the smaller of their two disressed hedge funds.

2) This situation created a bit of a death spiral in CMO’s (if someone who owns millions of bushels of corn looks like he is about to go under, then others know that those bushels of corn may soon be liquidated on the market, and hence, the current value of a bushel of corn will drop as well). Another broker-dealer named Brookstreet was heavily invested in CMO’s. As their value declined, Brookstreet’s net worth declined below $0, and they collapsed on Friday. In other words, Bear Stearns sneezed and Brookstreet caught pneumonia.

3) The collapse of Brookstreet is nothing to celebrate: 650 folks lose their jobs, for example. But Brookstreet is widely believed to be implicated in the issue that is at the heart of my Mitzvah (that is, widespread naked short selling). If this is true, it sets in motion a chain reaction: the firm through which Brookstreet “cleared” (that is, “did their buying and selling”) becomes liable for the financial toxic waste Brookstreet leaves behind. That firm is Fidelity, which would either have to cover those losses (it is big enough to do so), or else, take over the cover-up of those losses. If it does the former, however, the very act of covering the losses will create losses for others (through a dynamic called a “short squeeze”), and the effects could ricochet around the system.

Of course, this is all conjecture, as no one on the outside knows the degree to which Brookstreet is, in fact, implicated in naked shorting. Even if they are, the chain reaction I describe could be slowed or halted by the regulators (and the SEC staff would probbly do so, as they are in-the-pocket of the people who would want them to stop this chain reaction). However, in my view, the SEC leadership (in particular, Chairman Cox and Commissioner Atkins) are smart guys who lately have shown spine in standing up for Main Street, even at the expense of Wall Street.

Lastly (and going back to my theme that the bloggers and non-mainstream media have connnected the dots better than the mainstream media), there is an online news site called “mn1.com” (it is a kind of online CNBC). They connected the dots first.

http://feeds.mn1.com/brookstreet_flabbergasted_after_liquidation_news.htm
http://75.126.3.206/mp3/John_gittle_062207.mp3

A friend of mine likes to say, “No one knows who has been swimming naked until the tide goes out.” The tide has started its run.

Patrick

* “Mitzvah” is a Hebrew word meaning (as I was taught, anyway) “obligatory good deed”. For example, the “Ten Commandments” of the Old Testament are actually the ten Mitzvahs in the original (the word shows up in “Bar Mitzvah” and “Bat Mitzvah” as well). While at times my battle against Wall Street has been termed a “Jihad” (though I honestly do not remember who used that first, myself or my opponents), and later I called it a “Crusade,” more recently I have settled on “Mitzvah” as the best term, as my actions sprring less from any fervor, passion, or desire than they do from a sense of obligation. Normal humans, when they see ordinary people getting kicked by powerful bullies, feel an obligation to intervene. Doing so seems to be the Mitzvah that has been thrust upon me of late.

“Baghdad Bob pales in comparison to this guy” (i.e., Herb Greenberg)

Patrick Byrne — Mon, 04 Jun 2007 04:58:04 +0000

Posted: Sun Jun 03, 2007 9:58 pm
Post subject: “RE: Baghdad Bob pales in comparison to this guy

Hi Herb. One of your many admirers (as you can tell from his subject line) sent me this link.

You sound angry.

http://blogs.marketwatch.com/greenberg/2007/05/underwhelmed_by.html

I am curious: if you were underwhelmed by the appelate court’s 3-0 decision, then I must ask: what could the appelate court have done that would have whelmed you?If you are looking for something, I’d suggest reading that 36 page decision they signed: it was arguably harsher towards your patrons than was our own brief. All the best,

Patrick

Culture Project

Patrick Byrne — Thu, 24 May 2007 20:25:45 +0000

Posted: Thu May 24, 2007 1:25 pm
Post subject: Don’t Miss This Special Engagement

Dear Overstock.com Customer – I would like to extend an invitation to you for the encore special engagement of My Trip to Al-Qaeda, presented by Culture Project.

Lawrence Wright – arguably the man who knows more about Al-Qaeda than any other American – uses facts, figures, and PowerPoint to bring his Pulitzer-Prize winning The Looming Tower: Al-Qaeda and the Road to 9/11 (a personal favorite, a national best seller and one of the The New York Times Book Review’s “Top 10 Books of 2006″) to the stage in My Trip to Al-Qaeda.

I have arranged a special offer for Overstock.com customers:

20% off

This limited engagement is 2 nights, June 5th and 6th only, at Town Hall (123 West 43rd Street, New York, NY). To take advantage of this offer, enter the Special Offer Code OStwenty when you reserve tickets through Ticketmaster online or by calling 212-307-4100.

Tue, Jun 5, 2007 08:00 PM

Wed, Jun 6, 2007 08:00 PM

OStwenty

For premium, patron, and VIP seats, call 212-925-1806 or write willow@cultureproject.org.

The seating is limited, and tickets are sure to sell out fast. I hope to see you there.

Your Humble Servant,

Patrick

Click Here

My Trip to Al-Qaeda

Click Here

Götterdamerung of the American Mainstream Media

Patrick Byrne — Sat, 12 May 2007 08:03:55 +0000

Posted: Sat May 12, 2007 1:03 am
Post subject: Gotterdammerung of the American mainstream media

Ha ha – this is a great one. An all-time classic from Joe Nocera. Below you will find an email Joe Nocera sent me asking for my “reaction” to some odd claims he wanted to include in his weekly column. Alas, he sent the email Friday afternoon at 12:11 PM his time (note the “10:11 AM” time stamp of our email system, which is in Salt Lake City, that is to say, Rocky Mountain Time) and, as I was in Texas this afternoon in a meeting, I missed the window of a few hours that I theoretically had been offered to respond before Joe’s deadline for his weekly column. Congratulations are due Joe, who has crossed a line never previously crossed (not even by Carol!) by those engaged in their desperate efforts to keep the wig in place.

—–Original Message—–
From: Joe Nocera [mailto:XXXXX]
Sent: Friday, May 11, 2007 10:11 AM
To: Patrick Byrne
Subject: david rocker

patrick– David Rocker made a speech a couple of weeks ago in which he said, among other things, that your lawsuit was nothing mroe (sic) than an effort to silence critics. He also said that Gradient did its first report about Overstock a year before Rocker Partners even became a client. And he said that Mr. Anafantis (sp?) has been discredited with the SEC’s “no action” letter. Your reaction?

–
Joe Nocera
XXXX
YYYY
nocera@nytimes.com
==================================================

Had Joe actually abided by the principles of Ethics in Journalism 101, I would pointed out the numerous flaws in his attempt to whitewash the criminal activity of his friend Rocker with a “Free speech in America is very important” spin. Remember, from the start Rocker’s lawyers have tried to spin his illegal activity as being about free speech, and this is how the argument has been met by the adults who have examined it:

1) On 8 counts versus 0, the trial judge in Marin Country sided with us and against Rocker’s claim that this suit was about free speech. In fact, the judge said in the courtroom that after his initial review of the evidence there was a “high likelihood” that we would win the suit. Rocker appealed.

2) The California Attorney General appeared out of nowhere and filed an amicus with the appellate court supporting our side and against Rocker’s attempt to spin this as about free speech.

3) The appellate court recently heard Rocker’s arguments. This Law.com article gives a good sense of how the appellate court responded to the hysterical attempts by Rocker’s lawyers to spin his illegal conduct as being about free speech. www.law.com/jsp/article.jsp?id=1176282246984

The Law.com article captures one judge’s reaction nicely: “Justice Ignazio Ruvolo indicated there was evidence even ‘at this stage of the proceedings’ that could substantiate Overstock.com’s claims.” Somehow Joe missed that.

I’d also have pointed out that Rocker does not seem to think “Free speech in America is very important” when someone criticizes Rocker: Rocker famously sued some message board posters a few years back for daring to criticize him and his unethical behavior (incidentally, that case got laughed out of town). Free speech doesn’t seem to be that important to Rocker, Joe.

In the face of these facts, Joe blithely asserts that “The facts are not on Mr. Byrne’s side” without mentioning that the trial court, the California attorney general, and the appellate judge have indicated exactly the opposite, even at this extremely early stage.

Joe notes without question that, “Mr. Rocker wasn’t even a client of Gradient when it began writing its tough-minded reports on Overstock,” neglecting to mention that ex-employees of Gradient assert that the firm had a relationship with Rocker even before he formally became a client.

Joe writes about his friend Rocker “But you know how lawsuits are: a year and a half later, the thing has barely gotten started” without mentioning that we have been most eager to move forward, but that his friend Rocker has stalled and delayed at every opportunity, rejecting the appellate court’s offer to rule without delay for a hearing: there was even one article where an attorney for the miscreants promised to appeal the appellate court ruling. That is, Joe bemoans the fact that “the thing has barely gotten started” while conveniently neglecting to mention that it is his friend Rocker who is doing everything he
can to keep it from getting started.

And so on and so forth.

Is anyone else noticing that something seems to be going on this week? 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 on the miscreants that a fair bit of the material being requested by the SEC concerns them, not me or Overstock.

What would have made them so angry this week? Perhaps they are mad that last Sunday, at an event hosted by The Economist (a publication with infinitely more credibility than Joe, Roddy, Herb, Gary etc. could ever aspire to), the bad guys lost control of the narrative?

http://www.cultureproject.org/index.php?option=com_content&task=view&id=49

http://cultureproject.org/video2/archivepages/hedge2.html

I think these fellows better hope that the scandal whose lid they are trying so desperately to secure never blows off, because if it does, in the aftermath not only with their journalism come under examination, but more importantly, the publications which have blithely published it will be seen to have been part of the cover-up. Which is entirely right and approrpiate. And then that will be the end of it.

Can anyone doubt at this point that we are witnessing the Götterdammerung of the American mainstream media?

Patrick

That Herd of Independent Minds: Our New York Financial Press

Patrick Byrne — Thu, 10 May 2007 20:14:10 +0000

Posted: Thu May 10, 2007 1:14 pm Post subject: That Herd of Independent Minds: Our New York Financial Press

Some seem to be noticing that my mitzvah (that is my name for my efforts to expose an enormous financial scandal that is occurring on Wall Street) is gaining traction. Forbes has covered it in several articles in the last few months, Bloomberg Television recently released “Phantom Shares,” an amazing half-hour documentary about it, numerous foreign news sources are starting to cover it, The Economist hosted me earlier this week in a debate before an audience in Manhattan ( http://www.cultureproject.org/index.php?option=com_content&task=view&id=49 ), and there may even be a couple more major pieces in the works.It was entirely predictable then, that today Roddy Boyd of The New York Post (a newspaper for people who move their lips when they read People Magazine), Floyd Norris of The New York Times, and Herb Greenberg have all contacted me today about a trivial non-issue but asking precisely the same question in similar language that makes the same false assumptions, almost as though it were orchestrated. How odd (Sloppy work, guys: write back for new instructions). Their sloppiness presents, however, a wonderful opportunity to display the corruption of our financial press, how it shills for the powerful financial interests which own it and against whose perfidy I have been gaining traction in exposing. I will tell you the facts, and then present their questions, to give you an idea of how this works.I and some colleagues (both within and outside the company) have voluntarily cooperated with the SEC for over two years in a variety of investigations run out of several offices. I started doing this because I became convinced our capital markets are strikingly corrupt and have to be fixed or else our country may endure a 1929 event. All along I informed them that at any time I would be more than happy to provide them, in fact pleaded with them to examine, documentation of my various assertions. In addition, I repeatedly suggested to them that on any issue within the company about which they ahd any doubt or concern, to please permit me to provide them whatever documentation they needed in order to clear their minds and satisfy themselves that my motives were pure.On May 4 of last year they took me up on my offer, sending a subpoena for an enormous volume of documents concerning my allegations regarding corruption on Wall Street, along with questions concerning issues about which I had repeatedly suggested I would love to clear their minds. Upon receiving that subpoena, we visited them to suggest that it was not sufficiently broad enough, that there were additional materials in my personal (not corporate) possession I would like to turn over that were not covered in the first, and to request that they request these of me (which they immediately did in a subsequent short, 150 word coda subpoena on issues that were generally a subset of the first, along with those additional materials we were suggesting we provide but were in my personal, not corporate, possession).

This all happened over an 11 day period in the first half of May, 2006. Though not required to do so, in the midst of it I issued a press release not only informing the public of our receipt of subpoena, but celebrating it. I literally put out a press release of which, their subsequent kibbutzing notwithstanding, I was and remain proud: “Overstock.com Celebrates Receipt of SEC Subpoena” (http://investors.overstock.com/phoenix.zhtml?c=131091&p=irol-newsArticle&ID=858248&highlight= ). And in subsequent interviews and radio appearances I have discussed these events.

Now, a year later, how odd that the precise set of journalists and their lampreys (can lampreys have lampreys?) who write stories that support the investment positions of a small stable of hedge funds would concern themselves with precisely the same trivial point on the same non-issue that I have been discussing publicly for over a year. These three journalists have apparently decide that have decided that this was not enough, that I should have put out another press release about the coda-subpoena that followed up on the first that I announced with a press release, which itself made headlines for my decision to publicize my “celebration” of it, as though (after all that). Typical of their ilk is this from Herb:

Quote:

From: Greenberg, Herbert [mailto:XXX]
Sent: Thursday, May 10, 2007 6:05 AM
To: Patrick Byrne
Cc: XXX
Subject: Patrick’s subpoenaPatrick,I’m working on a small piece about your subpoena and had one question: Why did you wait nearly a full year to disclose your subpoena?Thanks,

Herb Greenberg

Roddy Boyd writes:

Quote:

“i had no idea of was that you had received a subpoena. looking at the docs last night, it is disclosed that you did get one. why the 1 year delay in disclosure?”

Floyd Norris contacted us with the same question.The beat goes on. I’m just curious that I did not hear from Bethany and Carol as well.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.

In a strange occurrence that would tend to confirm the existence of a karmic balance in the universe, not long ago I was contacted by a source located at the core of the relationships alluded to above. That source paints a startlingly clear picture of how this “system” really works, backed up by approximately one-thousand emails and other documents provided to confirm every word. Given the apparent locus of the SEC’s interest, you can expect me to deal with this gold mine of evidence as any concerned citizen would.

Your humble servant,

Patrick

Bloomberg TV’s Special Report “Phantom Shares” (later nominated for an Emmy for Investigative Journalism)

Patrick Byrne — Thu, 05 Apr 2007 21:43:19 +0000

Posted: Thu Apr 05, 2007 2:43 pm
Post subject: Bloomberg Television

SCANDAL!

Bloomberg Television has produced a shocking 25 minute exposé showing how Wall Street rogues are exploiting a crack in the system to steal tens of billions of dollars from Americans. The Bloomberg piece starts by talking about Overstock (I make a brief appearance, as a guy just trying to be a good citizen), but goes on to describe a wildly illegal scheme that hurts thousands of companies and millions of Americans with stock accounts. This may turn into a financial scandal that makes Enron look like a Sunday picnic.

Bloomberg News is arguably the most highly-regarded and trustworthy news service in the US. Please tune in to Bloomberg Television today, Friday April 6, at 11 AM ET or 4 PM ET (or simply watch it online at Bloomberg.com). http://images.overstock.com/f/102/3117/8h/www.overstock.com/07-0313Bloom_PhantomShares_NSS.wmv

Respectfully,

Patrick (Humble CEO)

P.S. – Please shop Overstock.com and get Free Shipping* on your order when you click here!

* Free Shipping offer ends Monday, April 9, 2007.

How to Handle a Corrupt Reporter

Patrick Byrne — Tue, 13 Feb 2007 20:13:26 +0000

Posted: Tue Feb 13, 2007 1:13 am
Post subject: Answers for a Reporter

Dear Reader,

You may know of my efforts to expose a crime that I believe is taking place on an enormous scale against millions of American workers, retirees, and savers, a crime from which a tiny segment within the hedge fund community is benefiting, and that is taking place in under the noses of our financial media. At the heart of the scandal is an obscure but in some ways mammoth corporation called, “DTCC.”The Party Line response has been to spin my efforts as just those of a CEO mad about his stock (though I started this while the stock was going up). Yet since I began my efforts a tremendous amount of data has come to light, and numerous economists, financial experts, and whistleblowers have come forward, confirming many of my claims. The story is cracking into the mainstream. Last April a Bloomberg expose by Bob Drummond detailed how counterfeit shares flooding our financial system have made a hoax out of corporate elections. In September Drummond/Bloomberg followed up describing the effects of these manipulations on hundreds of companies. Now, the current (February 12) issue of Forbes has two stories (by Liz Moyer and Nathan Vardi) that confirm claims which two years ago sounded absurd: that there is a mechanism in place to destroy companies for profit, that hundreds have been taken down, and that Organized Crime is involved.

http://www.rgm.com/articles/FalseProxies.pdf
http://www.buyins.net/articles/gamesshortsellersplay.pdf
http://www.forbes.com/home/free_forbes/2007/0212/068.html
http://www.forbes.com/home/free_forbes/2007/0212/064.html

When this is all over, one of the most interesting aspects of this story will be the battle between the 1.0 world and the 2.0 world. The opening shot may have been “RatherGate,” where Dan Rather’s journalism was successfully challenged by a swarm of bloggers (however you feel about President Bush, there is no doubt that Rather’s documents turned out to be fake). But the fight to expose this financial corruption may surpass that, because it has largely been a fight pitting, on one side, huge financial media corporations, and on the other, a swarm of bloggers, retired stockbrokers, and whistleblowers who figured out how the game was rigged and who had the data to expose it, data which much of the mainstream press did everything it could to bury.

Incidentally, I do not mean to suggest that the press is monolithic. Two entities in particular have shown great courage: Forbes and Bloomberg. However, so far their efforts have been outweighed by those of Fortune Magazine, The New York Times, and The Wall Street Journal, who have done everything they could to downplay the data which has now become incontrovertible. In fact, because I believe that a small number of members of the press are somehow involved in this, I have adopted a policy with journalists: until I trust them, I insist that communication between us be on the record unless otherwise agreed. I have stated this policy publicly. http://www.thesanitycheck.com/DrByrneJournalists/tabid/90/Default.aspx

There exists a once-respected business writer named Gary Weiss who has become reviled by many people in his profession. Over the last year or so Gary has devoted countless articles and (by the tally of one of his own colleagues) 93% of his blogs to saying that I am wrong about all this, that I am crazy, that I am a bad guy, etc. Unfortunately for Gary, he appears to have a relationship with the DTCC, that corporation at the heart of the scandal (http://antisocialmedia.net/pmwiki/pmwiki.php?n=Main.WeissDTCC ). If true, it means that a reporter, Gary Weiss, is taking part in a cover-up.

Today a reporter contacted me about this issue. A quick check confirms that Gary Weiss is no stranger to her: she wrote one of two reviews of his book (the other being by another reporter who is ridiculously biased in favor of hedge funds and against America). She and I exchanged a confusing (to me anyway) series of emails, which I post below: I think if you read them and note their obliqueness you will understand my decision simply to post my responses publicly. At her request I sanitized them of any personal contact information from her, and from other journalists. Within them were an extensive set of questions, which I post and answer below our correspondence.

Your humble servant,
Patrick

==========================================
From: xxx
Sent: Sunday, February 11, 2007 7:28 AM
To: Patrick Byrne
Subject: from susan antilla/bloomberg news columnist
Dear Mr. Byrne,
I write a column for Bloomberg News and am preparing to write a story about Overstock’s public relations/investors relations strategy. Judd Bagley already has answered a number of my questions, but some issues remain that predated his affiliation with the company. I have attached these questions to this email. Would it be possible for you to get back to me before Monday night?

Thank you for your help.

Sincerely,
Susan Antilla

________________________________________
From: Patrick Byrne
Sent: Monday, February 12, 2007 8:47 AM
To: XXXX
cc: yyy (also at Bloomberg)
Subject: RE: from susan antilla/bloomberg news columnist Bloomberg)
Dear Ms. Antilla,

It is very kind of you to write. I will work today on providing you answers to your questions, but before I do I have several points I wish to address. Please consider this off the record until we have the ground rules of our relationship worked out.

http://www.thesanitycheck.com/DrByrneJournalists/tabid/90/Default.aspx

3. As you know also from those interactions which you referred to with Judd, you know it is my general habit to reply to journalists by posting their questions along with my answers on the Internet. I mean no disrespect by this whatsoever: I have just found that the reporters generally make that extra small effort to represent my responses fairly when I do this. Would you have any objection to my operating this way with your questions?

4. In general, I see the situation as being the confluence of four issues: 1) there is a scandal called “naked short selling”; 2) there is a corporation (the DTCC) at the heart of the scandal; 3) there is a reporter (Gary) using his offices to deny, minimize, and cover-up that scandal; 4) Gary and DTCC appear to have a professional relationship ( http://antisocialmedia.net/pmwiki/pmwiki.php?n=Main.WeissDTCC ).

5. Simple research shows me that you have a connection with Gary, at least in that you gave one of the rare reviews of his book, and your review could have been written by Gary himself. Candidly, that is a little problematic for me, as is the fact that there are numerous false assumptions buried throughout your questions to me. I do not fault you for that, Lord knows it is easy to get confused about some of this. That said, would you be willing to agree to a basic rule as far as this interview goes, that rule being, I cannot be quoted except by full sentence? No partial sentence quotes?

I hope you find these preliminary questions in the spirit in which they are intended. Also, in any reply, please tell me whether you want your subsequent reply to be on the record or not. I look forward to hearing from you, and until then, I remain,

Yours,
Patrick

________________________________________
From: xxx
Sent: Monday, February 12, 2007 2:18 PM
To: Patrick Byrne
Subject: Re: from susan antilla/bloomberg news columnist
Dear Mr. Byrne
Thank you for your response.
Could you address these issues to me on-the-record?
Thank you.
Sincerely, Susan Antilla

________________________________________
From: Patrick Byrne
Sent: Monday, February 12, 2007 4:14 PM
To: xxx
Subject: RE: from susan antilla/bloomberg news columnist
Dear Ms. Antilla,

Thanks for writing back. However, I am not sure what you are saying: are you asking, “Was your letter to me, Patrick, on the record?” Yes it was. Or are you just asking me to address your original set of questions on the record? The answer to that is also yes, but I have lots going on and it may take me a day or two (if that is satisfactory).

I look forward to getting out of the meta-conversation and into the conversation!

Warm regards,

Patrick

________________________________________
From: xxx
Sent: Monday, February 12, 2007 6:32 PM
To: Patrick Byrne
Subject: Re: from susan antilla/bloomberg news columnist

Dear Mr. Byrne,

In your email this morning, you said ”please consider this off the record” until ground rules were worked out. Then you made 5 points. I guess I’m a little confused that you are now saying that the email that included those 5 points is now on the record, but thank you for clarifying.

Re your response to the questions that I sent to you: yes, I’d appreciate if you responded on the record only.

On your questions to me:

– You requested that I only use full-sentence quotations from any answers that you send. I agree to that. I’m assuming that you will understand that I may not be able to use lengthy quotations.

– Re my Bloomberg colleague: it appears you already have made a decision and acted on it, so I don’t see that my input is relevant.

– Re your proposal to post my questions publicly: I consider my questions my work product at this point. No story has been written or published. I will leave it up to you to determine the right way to handle that. If you should decide to publish my inquiries, I would appreciate that you remove my private telephone numbers.

I look forward to receiving your answers. Although I was hoping to begin writing the story this evening, I will delay that until I receive your answers tomorrow.

Thank you.
Sincerely, Susan Antilla

=================================================

The questions Ms. Antilla attached to her first email read as follows:

1.At what point did it become a corporate strategy to attack company attackers aggressively? I am specifically referring to your public stance against naked short sellers, brokerage firms (recent lawsuit) and members of the media including Gary Weiss and Herb Greenberg.2. Did management consult with outsiders (pr people; lawyers; mgt consultants) before moving in that direction? What outside PR firms do you use today, if any?3. What portion of your time is spent on public relations/investor relations and what portion is spent on operation of the company?4. Has Overstock ever conducted any polling (or hired someone to conduct polling) of its shareholders to determine their thoughts about your aggressive PR?
– if so, what did you learn

5. What other feedback have you received, positive and negative from your shareholders about your approach to short sellers, brokerage firms, and the media?

6. Why not utilize a strategy in which you aggressively promote the positive aspects of the company rather than attack?

7. You filed suit against brokerage firms on the Friday before a Monday announcement of disappointing company results. Was the timing of the lawsuit in any way meant to provide a diversion from the bad results?

8. I spoke with a securities lawyer and former SEC regulator about your lawsuit against the brokerage firms. It was his feeling that it would be very difficult for you to get the trade data and connect the dots that would support your legal theory. Do you think you have a winning lawsuit that you will fight to the end? From your point of view, is the suit a valuable PR strategy (sending a message) as much as it is a legal strategy?

9. While there are some very aggressive public relations experts who think that your strategy is both advisable and “cutting edge,” there is also a camp that says that it is not productive to attack reporters and file lawsuits. Do you have any regrets over your public statements about news reporters or your legal techniques?

I am now answering Ms. Antilla’s questions in this letter below, and will send her a link to this message board post. I hope you in the Overstock Community do not mind terribly having this played out on your message board.

Dear Ms. Antilla,

I respectfully inform you that I am posting to this board our communications, your questions, and my answers to them: doing so was not my original intent, but your responses to my questions were so consistently oblique that I think it clear this will facilitate the most straightforward communication between us (I am not sure why some folks have so much trouble simply saying, “This is off-the-record,” a request which I always honor).

I am unable to form form reply to your questions without first addressing the paradigm and the (in my view) false assumptions which infuse it.

In brief, you are speaking from a 1.0 paradigm in which there are two competing sets of agents: “corporations” and “members of the media.” In my worldview there are also two competing sets of agents: “citizen-journalists exposing a financial scandal,” and “corporations and their employees whose involvement in this scandal is being exposed.” That some of those corporations happen to be media corporations, and their employees, reporters, neither alters that basic landscape nor makes it incomprehensible.

I hope that brief preamble will make the following responses more intelligible.

1.At what point did it become a corporate strategy to attack company attackers aggressively?

What I am doing is not “attacking,” it is “exposing,” but in any case, what should one do with “company attackers” (your term) and if they are “company attackers” why should they be uniquely permitted to atttack?

I am specifically referring to your public stance against naked short sellers, brokerage firms (recent lawsuit)…

With regard to “naked short sellers,” I view my actions less as “attacking” anyone and more as exposing criminal activities within our financial system, activities which SEC Chairman Cox said last July were “clearly violative of federal securities laws”: is Chairman Cox “attacking” naked short sellers by saying that?

…and members of the media including Gary Weiss and Herb Greenberg.

Herb may be a “company attacker” as you say, but I think my response to him has largely been ridicule and disdain, not “attack.”

If Gary Weiss is also “company attacker” as you say, then so be it, but there is no “corporate strategy” regarding Gary Weiss and, I’ll note, you have mustered no argument and adduced no evidence that there is. You have simply made a flat claim, which happens to be false.

I will answer the question that you seem to be wanting to ask here. Yes, at the start of 2006 Judd Bagley began sleuthing and blogging about Gary’s activities, and yes, later in August (September?) Judd joined us and developed our car tab (by November) and now Omuse, but Judd’s hobby of blogging about Gary is no more a reflection of our “corporate strategy” than Forbes could be said to have a “corporate strategy” of attacking Overstock, simply because they employ Gary, and Gary also has a blog 93% dedicated to attacking Overstock.

2. Did management consult with outsiders (pr people; lawyers; mgt consultants) before moving in that direction?

Only in the following loose sense. There are millions of powerless people being ripped off by forces outside of their control or understanding, and I was taught that while one doesn’t have to go around looking for bullies to confront, when one comes across bullies picking on weaker people one has to stand up for those who cannot. So if you call my Mom, my grade school teachers, my professors “outsiders” whose consultations have caused me to “mov[e] in that direction,” then I suppose I suppose the answer is, loosely speaking, “Yes.”

What outside PR firms do you use today, if any?

In general we have engaged in little outside PR, though recently there has been a small, two-woman operation back East that is doing some general PR for us. But no, this is home-grown. Can you really imagine a PR firm coming up with this as a strategy?

3. What portion of your time is spent on public relations/investor relations and what portion is spent on operation of the company?

It varies month to month, but over the span of a year I would estimate:

Public relations: 15%
Investor relations: 2%
Company operations: 83%

4. Has Overstock ever conducted any polling (or hired someone to conduct polling) of its shareholders to determine their thoughts about your aggressive PR?
– if so, what did you learn

Oddly enough, someone told me a year or so ago that he had thrown my name onto the bottom of a political poll, and (according to him) while a bit less than 10% of Americans recognized my name, those who did gave me an approval rating that would make me blush to reveal. I have my doubts about it, because the number seemed impossibly high to me.

Our company does the occasional brand awareness poll, and sometime last year we threw on a question to ask consumers if they knew about this contest and how they felt: a surprisingly small percentage had made the connection, but those who did supported my actions by a substantial (but not impossible high) margin.

Shareholders: I have gotten significantly more encouragement than discouragement from shareholders. I have considered polling them but would not know how, or what to think if the number totaled 300%.

5. What other feedback have you received, positive and negative from your shareholders about your approach to short sellers, brokerage firms, and the media?

Respectfully, I do not know what else to say beyond what I just wrote.

6. Why not utilize a strategy in which you aggressively promote the positive aspects of the company rather than attack?

Respectfully, this is just a string of bad assumptions: this is not a “strategy,” I do not call what I do “attacking,” and you are the ones who called them “company attackers”: why not ask them why they are “attackers”?

No, the timing of the lawsuit was driven more by missed phone calls, late flights, FedEx deliveries and so on and so forth: as we have said, we announce news when we have it. In addition, this whole “diversion” theory is a little odd: in your view has this been much of a diversion?

Ha-ha-ha: Please tell him I said, “Dream on.”

Do you think you have a winning lawsuit that you will fight to the end?

Yes.

From your point of view, is the suit a valuable PR strategy (sending a message) as much as it is a legal strategy?

It is not a “PR strategy” of any kind (valuable or non-valuable) and I have no idea what “message” it would purport to be sending: it is an attempt to seek rectificatory justice for a company and shareholders harmed by criminal activities.

I regret none of my “public statements” or “legal techniques,” and once again, this is not a “public relations… strategy.” Most respectfully, what part of “illegal” is so confusing? What part of, “There are millions of people whose savings are being stolen, and I cannot stand by and watch” seems so utterly incomprehensible?

Ms. Antilla, there are many, many reporters who explicitly ask me (as you have not) for confidentiality, and I always comply. I hope you understand why, given your oblique responses, I thought this conversation would best be continued in the sunlight of public observation. If you have any further questions please do not hesitate to contact me (or simply post them here and let me know). Until then, I wish you all the best, and I remain,

Yours,
Patrick M. Byrne

On the Introduction of “Guides” (née “Omuse”)

Patrick Byrne — Wed, 07 Feb 2007 04:30:59 +0000

Posted: Tue Feb 06, 2007 9:30 pm Post subject: Giving you a sneak preview: try Omuse and give me feedback

Dear Auction Colleagues, We have completed the basic development of our new tab (that one at the far right that has been saying, “Coming Soon!” for six weeks). It is called “Omuse” and it will be going live for the whole world to see in a week or so. O hope that you will give it a try. Even though the tab is not live yet, you can get there directly by typing omuse.overstock.com . A good description of it was sent out today by its designer and creator, Judd Bagley, in a letter to some folks in the blogging community (some of whom are friends of his, some not). I copy and paste his letter below. Judd and I are big fans of 2.0, but we both see that there is a niche that is not currently being filled there. Please remember that it is beta: that means, it is not fully launched, the tab is not live, we undertand there are bugs, and we are asking our friends to come give it a try in order to get your feedback, and so that we may hear about any bugs or ways to improve it. Please come back to this message board and share your feedback with Judd and me. Oh yes: the best part is, we are viewing this as an extension of the Overstock Community, and so your auction sign-on will work on this new tab. Respectfully, Patrick =============================================== My name is Judd Bagley, Director of Social Media at Overstock.com. I’ve spent the past few months creating something we’re calling Omuse, which is an open environment for people with similar interests to find one another and jointly “write the book” on the activities they most enjoy. You can find omuse at http://omuse.overstock.com We’ve just entered an open beta phase and I want to give you the opportunity to get acquainted with Omuse and, if you wish, be among our earliest contributors by creating a guide to participating in whatever activity you find most interesting. At this point, the question we most frequently hear is: “what should I write about?” The answer is simple: Imagine you won the lottery tomorrow and never had to work again. What activity would you immediately set about doing day after day? This is likely the activity that most inspires you, though the one most people around you – spouses included – don’t entirely “get.” It may be the same thing you blog about, but not likely. It’s almost certainly not the thing you do for a living, but if it is, you’re very lucky. Whatever that thing is, that’s what we want your guide to be about. As a guide’s creator, you are in charge of it. You may build it alone or – as we would recommend – with the help of others who share your passion. You get to decide who joins your team and the direction you take together. Omuse is built on a wiki platform, so we’re frequently asked what makes it different from Wikipedia, for example. I’ve arrived at two answers to that question: 1- Where Wikipedia forbids the inclusion of original research, we like to think of Omuse as being built exclusively on original research, recognizing that everybody is an expert at something, and it’s usually the thing they most enjoy doing. 2- Where Wikipedia endeavors to be like an encyclopedia, where one version of the “truth” must be consistent throughout, we’ve built Omuse to be more like a library, where alternate approaches to the same topic set side-by-side are not only acceptable, but a sign of our success. We expect Omuse to become the foremost source of practical and applied knowledge online, and hope you’ll help us accomplish that goal by launching a guide and encouraging others to do the same. To get started, go to http://omuse.overstock.com, register, then click the button reading “Create a Guide,” then give your guide a title, and you’re on your way. If you have any questions, please feel free to email me. jbagley@overstock.com

Sell-through Rates in Auctions

Patrick Byrne — Tue, 30 Jan 2007 01:53:19 +0000

Posted: Mon Jan 29, 2007 6:53 pm
Post subject: Sell-through-rates

Folks,

As you know, historically our STR has been abysmally low. We charged so little for the auctions that we did not feel too badly about it. But we set about making some changes, and they seem to be working.

A few weeks ago we had our first day with sell-through-rates over 10.0%.

Then last week we had our first day with sell-through-rates over 20.0%.

Yesterday our sell-through-rate was 31.0%.

I believe (but want to be corrected if I am wrong) that this is now slighly above eBay’s. That is, a third party reports eBay’s closing rate as being about 40%, but their calculation seems to be more generous (in that a Buy-It-Now can get relisted up to three times, and the first two failures do not count against the STR score). Is this true? Does anyone have any knowledge you can share with me on this?

Now that we (collectively) have an auction site that is viable, and letting sellers get acceptable closing rates (at last), I hope you are spreading the word in the eBay buying community that there are good deals here, without the overwhelming competition (yet) from other bidders that eBay has. I think that is the right message to send the eBay buying community: when you bid on auctions at Overstock, all the best deals do not get bid away (or sniped) from you.

In any case, thank you for sticking with us until the fire began to burn.

Patrick

Stormy, Meghan, and Auctions

Patrick Byrne — Tue, 23 Jan 2007 05:34:25 +0000

Posted: Mon Jan 22, 2007 10:34 pm Post subject: Stormy, Meghan, and Auctions

Hi folks.

I got a bunch of calls in the last couple days about Stormy, why she rolled off auctions, did she leave the company, and who Meghan is. Stormy is a brilliant street-fighter whom I move around the company to dive into our biggest problems and opportunities, usually with a few analysts in tow. When we decided to do mass advertising she wrote our radio and TV ads, produced those commercials with Sabine, and buys our airtime. She also took over customer service and brought it to #4 in the country in about a year.

Stormy came into auctions in late September, and within a few weeks had pretty much diagnosed the problems (disparate treatment for small sellers, and the subscription plans that made listings so cheap that we got far too many listings starting at artifically high prices, which smothered everyone’s sell-through-rates and destroyed all of our economics). She suggested the plan of going back to a listing fees for everyone, and the other changes we made to level the playing field among sellers. She also realized cut our costs in auctions dramatically, so that the tab became an economically viable proposition for us.

As you must have noticed, things have turned around dramatically in the last few weeks. Listings have dropped almost as far as we wanted them to; we see that the sell through rates are many, many times higher than they have ever been on our site; page views/auction have soared, etc. Once it was clear that these changes had pushed things in the right direction, I moved Stormy on to other duties (developing a new source of revenue for us, while maintaining our customer service and branding departments). We handed the reins to Meghan.

Meghan is a terrific young woman whom you will be getting to know better (I have asked her to create a forum like mine: you will see her picture up tomorrow, I hope, and will probably never check in mine again). She shares my and Stormy’s belief that some basics had been forgotten on this auction tab, and that simplification is good. She has a small, tight team now that has things under control. Our customer service and content review is managed by Jason, a wonderful fellow we hired some time ago with solid experience at eBay, and of course, Joe P handles our relations with the largest sellers.

Incidentally, Meghan now reports directly to me, and I am really enjoying watching these changes take hold. i know that I made a few abrupt moves on the controls some weeks ago, because we wanted to start off the new year right. I am sorry about that, but we are very glad we did, because every auctions metric that we care about has turned around sharply. Stormy can be proud of the decisions she made, as Meghan can over the auction tab she now commands.

So please, never doubt that you are in good hands with Meghan. We have returned to first principles, adn they seem to be working.

Here is a question: it is our hope that by getting conversation rates up as they are now, sellers will gradually realize that they can list more items (I think the average seller now lists more than a dozen at a time). I expect they will experiement, increasing the numbers bit by bit, to see what our traffic supports. I also expect, or at least hope, that as word starts getting out into the eBay community, a few more sellers may come try things. And lastly, I get the impression that some eBay groups are sticky, that is, that some sellers will bring dedicated buyers when they come.

How realistic does this sound?

Respectfully,

Patrick

Official Roll-out of Cars

Patrick Byrne — Fri, 19 Jan 2007 22:09:56 +0000

Posted: Fri Jan 19, 2007 3:09 pm Post subject: Welcome to Overstock Cars

Dear Esteemed Customer,

I write today most respectfully to request your attention to our new “Cars” tab on the our top navigation bar. A car is the second largest purchase people make. Yet the normal car buying experience fills people with dread, fraught as it is with high-pressure tactics. We designed our car tab to reduce that pressure by creating a channel for customers and dealers to find each other and begin discussions on a happy note.

Overstock does not own the inventory you see listed: all these cars (new, used, and certified) are being offered by dealers. Simply navigate to a car that interests you and then choose from three options: offer the dealer’s lot price, or make a counter-offer, or simply ask for more information. Your entries are automatically and immediately forwarded to the dealer, so the conversation can be started easily, without the commitment or pressure that comes from starting the conversation on their lot.

We have long considered extending the Overstock model to the auto industry. In fact, in the last few years folks in the industry approached me several times about doing this, and I, stupidly, delayed it. Now that we have launched it in Beta three weeks ago we see its power already: customers are using it to find good deals on cars. Just as we do with the products we ship you, we intend to uphold our end of our bargain to our customers by searching for the best and most reputable dealers in each state, tracking our customers’ satisfaction by dealer, promoting those dealers who really wow our customers (and when necessary, leaning a bit on those that don’t). You get to go car shopping with an 800-pound gorilla at your side.

We currently have 4,000 vehicles in seven states. This inventory is growing daily, as our “Ocars” team is working hard to bring more vehicles to the site quickly. In fact, I hope to have 100,000 cars by the end of Q1. We’ll see.

We plan on keeping the search experience clean, making the product descriptions as informative as possible, and creating a car buying experience devoid of pressure. Welcome to Overstock Cars.

Your humble servant,

Patrick M. Byrne

Post Made When We Ended Subscription Plans

Patrick Byrne — Sat, 30 Dec 2006 03:11:45 +0000

Posted: Fri Dec 29, 2006 8:11 pm
Post subject: Meghan and I Just Sent This: Subscription Plans Are Ending

Greetings Sellers,

We recently informed you that subscription plans 5-10 will expire on December 31, 2006. However, further analysis has convinced us that the problems arising from O-Subscriptions (specifically, high starting prices, and thus, low sell-through rates) are endemic to all subscription plans, and are therefore detrimental both to your business and ours. As a result, we are ending our O-Subscriptions and have removed the sign-up page.

Sellers currently subscribing to a plan will be allowed to utilize it through midnight, January 11. Any unused portions of your plan (including all January subscription fees) will be credited back to you.

Though we have eliminated O-Subscriptions, we are excited about other changes we are coding up now. By March, 2007, Overstock.com Auctions hopes to have released a classified ad platform, bid cancellation capability, and the revival of 1-day auctions. We are confident that these site enhancements, along with the O-Subscription changes, will add value to the bidder experience and, ultimately, to your business.

Should you have any questions, please direct them to sellershotline@overstock.com. We appreciate your support and wish you the best in 2007.

Respectfully,

Meghan Tuohig – Director, Auctions
Patrick M. Byrne – CEO, Overstock.com

An Article on Bollywood

Patrick Byrne — Sun, 24 Dec 2006 03:34:15 +0000

Posted: Sat Dec 23, 2006 8:34 pm
Post subject: Interesting article

http://www.forbes.com/business/2006/12/20/bollywood-hottest-films-biz-cx_lm_1219bollywood.html

I am a fan myself.