BYRNE FLAMES OUT
By RODDY BOYD
nypost.com
Patrick Byrne blew a gasket last week.
Byrne, the chief executive officer and founder of Web retailer Overstock.com, took to the airwaves and Internet on Friday and very memorably discussed the lawsuit his company filed against a local hedge fund and an independent research firm.
It was arguably the strangest performance by a corporate executive in recent memory. During the Webcast, he discussed a wide-ranging, interlocking series of relationships that, he asserted, actively conspired to depress the price of Overstock's equity.
Not content with arguing that the stock dropped to $46.87 from a high of $77.18 in January due to misplaced beliefs or fears, Byrne blasted a "Sith Lord" that, he claimed, coordinated the actions of several hedge funds and much of the American financial press.
He declined to identify the "Sith Lord," but described him as "a master criminal from the 1980s."
In the middle of the discussion, Byrne said that the SEC is informally investigating the company but declined to elaborate.
As if that wasn't strange enough, Byrne entitled his analysis of the so-called conspiracy, "The Miscreants Ball," a word play on the famous Drexel Burnham investor conference known as "The Predators Ball." He outlined a scenario whereby Rocker Partners, a hedge fund that generally shorts stocks it deems overpriced, fed misleading research from Gradient Analytics — an independent research firm based in Scottsdale, Ariz. — to a gullible and conflicted media.
In turn, the media, including organizations like The Street.com, CBS MarketWatch, Forbes Magazine and The Wall Street Journal, did the bidding of Rocker and wrote "hatchet jobs," he claimed.
David Rocker, general partner of Rocker Partners, was traveling and unavailable to comment.
Central to Byrne's analysis of media culpability was the alleged cooperation among traditionally bitter rivals. For example, he argued that in February, MarketWatch's columnist Herb Greenberg stopped writing about Overstock because "the assignment got passed" to Street.com Real Money columnist Jeff Matthews. Matthews, who runs a hedge fund, RAM Partners, would not comment other than to note that the linkage to Greenberg was "incredibly strange."
He added that he did not know any "Sith Lord."
Matthews, in addition to running a hedge fund, also runs a blog. In it, Matthews criticized Byrne for being excessively concerned about the role of short-sellers, and noted that "Byrne exhibits all the signs of a CEO with something to hide."
While noting that he worked with Rocker a decade ago, Matthews also criticized Byrne for spending so much time discussing short-sellers. He has no position in the company.
Aiding the multifaceted conspiracy, Byrne said, are the conflicts of regulators. The CEO singled out Attorney General Eliot Spitzer, because he went to law school with Jim Cramer, an owner of Street.com, and had been an investor in a fund run by Cramer. A spokesman did not return a call inquiring whether Spitzer knew of any "Sith Lord" in this context.
Those were among the more lucid components of his presentation.
In one memorable sequence, he connected The Wall Street Journal columnist Jesse Eisinger to the harassment of a 70-year-old woman in Las Vegas. Later, he alluded to a baton being passed to Carol Redmond of Dow Jones Newswires, and began a discussion of how her French background affects her ability to cover Overstock.com accurately.
Redmond, Byrne said, took the phrase "he took a bath" to mean he frequented "gay bathhouses." In an attempt to clear up any misconceptions, he said he did not.
Later, Byrne argued that "as a libertarian, I don't care if anyone thinks I'm gay." Appropos of nothing, he also said he wasn't "a coke head."
The Journal's Eisinger declined comment, as did MarketWatch's Greenberg. Redmond was unavailable to comment.
A spokesman for Overstock said that Byrne was committed to standing up for the company and "righting wrongs where he sees them." The presentations, the spokesman said, was not part of the long-range public relations strategy of the company. He said that Byrne, to his knowledge, is not currently under any psychiatric care and that he was sober when he gave the presentation.
Byrne's lawyer, Wes Christian, said that he understood how many reporters and investors could be confused or dismayed by the presentation. He said his later appearance on CNBC made his case better.
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