Posts by Ben Colman 5 publicly visible posts • joined 7 Dec 2007
Something I just noticed: Byrne says he had nothing to do with the Economist article. But a man named Wellborn from the "Haverford Group" is quoted prominently.
Byrne owns the Haverford Group, and it is an affiliate of Overstock. http://people.forbes.com/profile/patrick-m-byrne/61105
The lesson here is that absolutely nothing Byrne says can be taken at face value. That''s been his record and is why his reputation is quite as poor as it is.
"In order to naked short, you have to lie here and say 'Yes'"
No, you can short stocks without owning them. That's done every day in legitimate shorting. However, the broker has to borrow the stock. In naked shorting, that step is skipped. The problem with naked shorting conspiracy theories is that brokers have no motivation to not borrow stocks. That may explain why so few actual examples of naked shorting are ever prosecuted.
Byrne has been squawking about naked shorting for years. The reason the U.S. media doesn't believe him is because it has nothing to do with his company's problems, which includes his own bizarre behavior.
Overstock is being sued by seven California attorney generals for overstating the discounts on its website. http://money.cnn.com/2010/11/18/technology/overstock_discounts_lawsuit/
It was penalized by Google for gaming its search results, causing a 5% hit on revenues. http://www.auctionbytes.com/cab/cab/abn/y11/m04/i26/s
Above all, Overstock is burdened by Byrne's reputation for talking trash, in one case making a filthy comment to Bethany McLean of Fortune. http://money.cnn.com/magazines/fortune/fortune_archive/2005/11/14/8360711/index.htm
All of this is considerably more consequential than naked shorting, to the extent that there is any in this stock.
I was also disturbed by the approving tone of the article, the failure to report or even mention legal implications, and the sheer sleaziness reported here.
The headline says that Byrne's crusade "outed" a Yahoo security flaw but that's not quite what happened. Byrne's crusade "exploited" that flaw, and that's a crucial difference.
I would expect that an honest, ethical etailer would promptly report such a flaw to Yahoo. Instead, an employee of the CEO utilized the flaw in his crusade. Yahoo only became aware of the flaw when contacted by the Register. That is startling in itself, and suggests that Byrne is not taken as seriously by his victims as he might prefer.
The Register clearly is sympathetic to Byrne on the naked shorting issue and that's its privilege. But to condone tactics such as this is seriously off-putting.
The answer to the "obvious question," which presupposes a conspiracy, is that the premise of the obvious question is wrong. Wikipedia is not "covering up" for anyone; it is reporting the life of a dull journalist, which of necessity is less gory than the chief executive of a company as wracked in pain and losses as is Overstock.
I have an even more obvious question: Why does Overstock.com perspire over its employees not being allowed to edit Wikipedia? They are paid, we presume, to sell goods, or to maintain the website, not to add content to Wikipedia.
It surprises me that the reporter did not ask this obvious question in his interview with Mr. Bagley.
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