Re: 8/18/05 - [NCANS/OSTK] NCANS: The Motley Fool OSTK Article of 08/18/05
The Motley Fool OSTK Article of 08/18/05
In response to the article of 8/18/05 by Seth Jayson:
Seth, Seth, Seth. Do you even try to get things right? I mean, nobody's perfect, but still, you are a "financial journalist", with everything that entails, right? I appreciate your marvelously pedestrian fiction-writing skills, but still, you have to make it believable.
Try this for starters: "Today, Rocker fired back a counter suit." Did he? Where is the filing? At the time of this article's posting, there's nothing in the court system I can find. In fact, all I could find was the press release, which was a statement of intent. So what he actually fired back with was a rambling press release, as far as I can tell, in which he apparently thinks that I am part of the suit against him (I'm not) or thinks he can suck whoever he dislikes into it, and a declaration that he intends to counter sue (again, implying that I sued him) me as well as the plaintiffs. That isn't the same as a lawsuit. Hint: One says press release. The other is a court document.
So right out of the gate with an inaccuracy. Now allow me to address another blatant declarative falsehood that Seth makes from the get go. Namely that I insinuate that he is being paid by hedge funds:
"In fact, since I penned my thoughts on the matter, "Bob O'Brien," the anonymous Rasputin in this sordid affair, promoted little ol' me to junior member in this vast scheme. Conspiracy fans will no doubt be excited to learn that my mother's family name is Eisinger, though I'm pretty sure I'm not related to Jesse Eisinger, the Wall Street Journal writer who's high on Bob's (and Byrne's) enemies list. Though I'm flattered to have joined the ranks of Bob's big baddies, I find the insinuation that I'm on the take from hedge funds to be both hilarious and sad. I mean, I drive a beat-up truck with those wood things sticking up in the back, eat leftovers for lunch, and wear pants from Target, for crying out loud. Obviously, they're sending those checks to the wrong Seth Jayson."
Well, now let's see. First off, I never discussed, anywhere, his family name. Second, I never insinuated that Seth was on the take. I tend to be pretty capable of articulating thoughts, and what I said was "Seth is low-end even by junior Fool standards. Whole sections of his "story" could have been written by Rocker, and he cites numerous links to known affiliated hedge fund droogie Jeff Mathews of Ram Partners, who is frequently touted by Rocker stooge Herb Greenberg. So we have Seth in with the same crowd, predictably trying to spin, spin, spin, and never once stopping to go "what if it is true?"
Now, nowhere does it insinuate that he is being paid by Rocker or hedge funds. I lump him in with the crowd of "journalists" that spin facts in a hedge-fund friendly way, and observe that Rocker couldn't have written it better. No insinuation of payment there. Why they do it is a mystery to me. I have a feeling it might just be because they are suck-ups trying to curry favor with the NY in crowd, but that is just a speculation.
Now to the questions:
1. How can investors be sure that this entire drama isn't just the result of a colossal clash of egos?
Well Seth, how can we be sure that we aren't all living in instantly created parallel universes that split with each atomic event? We can't. It could be that the 6 law firms in the suit are just doing this as an ego play, but that is unlikely, don't you think? So that is unlikely, but possible.
2. You alleged last Friday on CNBC that Herb Greenberg -- among other journalists -- is actively participating in this conspiracy in order to help Rocker and others front-run or otherwise trade illegally in your stock. What, exactly, do you claim is the motivation for the alleged conspiring journalists?
Perhaps they enjoy the thrill? Maybe there is some sort of other payoff they enjoy, from an "attaboy" to a vacation to money in a BVI account? Dunno. But if the charges are true, we will get to find out. I don't think Byrne should try his case in the media, and if he did, I'd propose something with a bit more impact than the Fool, responding to a guy who by his own admission isn't exactly enjoying fabulous success.
3. You said on CNBC last Friday that the only evidence you have in this case is affidavits given by people who claim to have previously been involved in the scheme. In yesterday's CNBC interview, you read from an affidavit which said, "it appeared" that the players in the conspiracy were orchestrating attacks on you. Is that the strongest evidence you've got?
He didn't say it was the only evidence. He indicated that was some of the evidence. Now while I'm sure you'd like to know all the details of the plaintiff's case, you, like all of us, will have to wait until the complaint moves forward.
4. Why should anyone, in the public or the courtroom, trust the statements of people who were (or are) involved in perpetrating the very same stock scam that you're protesting?
You mean like, allegedly, Rocker and Greenberg? Good and fair question. Why would anyone?
5. How much is this litigation going to cost Overstock shareholders, including the money needed to defend against the lawsuits that have already begun to come your way?
Perhaps you should direct that to the plaintiff attorneys. Did you ask them? If not, why not?
6. Let's be honest. You know more than one billionaire, and you say that you, family, and friends already own an enormous piece of Overstock. Why not just avoid the hassles of the public market, give shareholders the $77-ish per share that your lawsuit suggests the stock is worth, and take it private?
That is one way to deal with rampant market corruption and illegal manipulation. A coward's way. Another way is to fight the guys that are trying to mug you. Seth, you probably can't understand this, but some people just don't like being mugged and aren't cowards.
7. You claim there is a "Sith Lord" controlling your stock price. It would seem to me that rather than trying to short Overstock straight into the ground, a clever Sith Lord would do better to let the stock rise at some point, and play both sides of the action. Have you any evidence that your stock's big rise in late 2004, or any subsequent pop, could have been orchestrated by the Sith Lord, prior to taking his short position?
If you are suggesting that stock manipulators often manipulate stocks both ways, you are correct. Whether or not this particular alleged manipulation happened in both directions is a matter of speculation - there is certainly historical basis for that notion, as it is classic Jesse Livermore or Joe Kennedy - run it up to a froth and then short it, making money both ways. Whether that type of manipulation was at play here is unknowable at present.
8 .Your lawsuit claims that the Sith Lord's conspiracy is directly responsible for the fall in your stock's price. Yet other heavily shorted stocks that appear on the Reg SHO list, such as Netflix (Nasdaq: NFLX), NetEase (Nasdaq: NTES), True Religion (Nasdaq: TRLG), and Shanda (Nasdaq: SNDA) are doing just fine, as you can see from this chart. How do these companies resist the power of the Sith, and why can't Overstock do the same?
Why don't you take the majority of them, specifically ones that are allegedly actively being gamed by the same group? TASR, NFI, ALD, KKD, NAVR, OSTK.....you know, germane examples rather than straw men? How do their charts look?
9. For better or worse, you have become a controversial figure because of the naked short issue. Would Overstock shareholders be better served if you stepped down as CEO but remained as chairman of the board?
Why precisely would shareholders be better served by a CEO that defends his company and them by going after those mugging his company, stepping down? What is the logic? I mean, considering that Byrne is the largest shareholder, why wouldn't he have a keen interest in what is best for the shareholders - him?
10. What do your many family members, friends, and mentors like Warren Buffett -- who have achieved business success in their own right -- think of this effort?
I don't know. Most would probably recommend keeping a low profile. Most also haven't gone a few rounds with terminal illness and walked away, so their character and perspective may be different.
11. There's been a lot of controversy regarding your relationship with "Bob O'Brien," a man who hides behind a pseudonym and issues vicious, unsupported attacks against anyone who disagrees with him. Do you think your shareholders would be better served if you distanced yourself from him and his organization, which you have helped to fund?
Translation: He issues attacks critical of me, and supports them with fact, thus he is bad. I will instead of acknowledging this declare him to be hiding (instead of protecting his safety and privacy), and claim erroneously that he issues unsupported attacks. It also suggests that Dr, Byrne and I take showers together, or exchange recipes, or whatnot. Dr. Byrne's public interaction with me is limited to some involvement in NCANS, which of late hasn't been particularly active, so how much more distant could he be?
12. Fast-forward a year. You've won damages of $500 million in this case. Do you track down all past shareholders from the period of the alleged damages and pay them for their losses? Do you pay it to current shareholders as a special dividend.
You're low. And the dispersion of damages is a little early, don't you think? Since Byrne is the biggest damaged shareholder, I'm sure he'll do the right thing...
ncans.net |
