Monday, April 25, 2005

Patrick Byrne to Meg Whitman: “Right! I’ll Do You For That!”

“This may become a long war of attrition with eBay.”

That’s what Patrick Byrne—sorry, Doctor Patrick Byrne—wrote (in his letter accompanying’s wretched earnings report on Friday) about the failure to date of’s much-hyped (by Byrne himself) entry into the online auction market.

(Actually, it was a lack-of-earnings report: Overstock lost twice as much money as most analysts were expecting, and surprised the Street with a huge ramp-up in technology costs and a laundry list of “ mudpies,” a Byrnesian term for “money-losing things we did.” This for an operation that had supposedly been cutting-edge on the technology front, but, as Byrne now admits: “we’ve grown past the stage that we can do things with Excel spreadsheets and hand calculators.”)

Does this apparent absence of connection between the reality of Overstock’s failure to dent eBay’s auction machine and the boldness of Byrne’s “long war of attrition with eBay” proclamation remind anyone besides me of the Black Knight, in Monty Python and the Holy Grail?

Recall the dark forest setting in which the loud, brash Black Knight boldly confronts King Arthur, gets his left arm cut off (“I’ve had worse”), then his right arm (“Just a flesh wound”), then one leg (“Right, I’ll do you for that!”). Finally, when his remaining leg is cut off, the Black Knight declares: “All right, we’ll call it a draw.”

In much this very manner does Patrick Byrne, the Black Knight who only a few months ago metaphorically confronted Meg Whitman with his boast that Overstock's auction business had launched "far faster than eBay's first 15 or 20 days," now describes his failure in yet another "skunkworks" project as: “a long war of attrition.”

If Byrne wasn’t the CEO of a public company, you’d think the same thing King Arthur thought as the armless, legless Black Knight screamed “Oh, oh, I see, running away then. You yellow bastard! Come back here and take what’s coming to you. I’ll bite your legs off!”

Which is to say, “You’re a loony.”

Among the many problems at Overstock, too numerous to mention in just one post, Byrne’s auction site has been as much a failure—by any objective measure—as any in the long list of Overstock’s let-downs. But don’t take my word for it. Here’s one of the “power sellers” who made the leap from eBay to Overstock, and clearly regrets it.

Sun Apr 24, 2005 5:29 pm: We really need the support right now. There are a few things I believe need addressed…

First, sub-categories. Many of us have been asking for these since September of last year. I was unhappy when we were told it would not be until the first quarter until they were finished. I knew it would be April, but still, nothing has been accomplished that we know of on this….We were asked for our opinions at least three times, with no results. Maybe you guys didn't get the results you were looking for, because we have answered the question so many times….

You need to really start listening to us….as many of us are depending on this site solely for our income. Yes, my husband works, but I always was the one to pay all of the bills from my online sales while he paid the mortgage. I haven't been able to pay any bills in the past two months.

In conclusion, we now all have to pay for our listings, as far as I know. When there are no sales, many are going to leave..... I am not trying to be hard or disagreeable, this is just my business, and I want it to work on Overstock...otherwise, I will have to go back to eBay. I have no choice.

To quote the Black Knight: "'The Black Knight always triumphs! Have at you! Tis but a scratch..."

Jeff Matthews
I Am Not Making This Up


The Unknown Broker said...

The next thing we know, Dr. Byrne will start issuing inflammatory press releases directed at Meg Whitman, but done in the style of the French soldier in Holy Grail:

"You don't frighten us, English pig-dog! Go and boil your bottoms, son of a silly person. I blow my nose on you, so-called Arthur-king, you and your silly English kiniggets.

I don't want to talk to you, no more, you empty-headed animal, food trough wiper. I fart in your general direction. You mother was a hamster and your father smelt of elderberries."

Nah, he wouldn't do that. He'd come across as a loony.

Oh wait, that never stopped him before. So stay tuned.

overstuffed said...

How does one explain the $47.5 million purchase of call options by Overstock in the first quarter (see cash flows from financing activities in first quarter press release)?

k9thunder said...


Another excllent analysis!

My take is Byrne is good old Don Quiote the LOONY going after windmills (AMZN and EBAY) with grandeur of all mighty (another stinkin e retailer)OSTK...

Keep up the great work!

Tom said...

A contrarian view:

skeedaddy said...

Check out CNBC today for the Patrick Byrne vs Jeff Matthews battle Royal.