Saturday, December 10, 2005

Weekend Reading: Conspiracy of the Jews?

The following was brought to my attention by an alert reader.

It purports to be a recent posting by Patrick Byrne, CEO of Overstock.com, on the Motley Fool web site.


Long-time readers know that when it comes to Patrick Byrne and the company he runs, I follow the old Gurdjieff-Ouspensky philosophy: “believe nothing that you cannot verify yourself.”

After all, this is a man whose company calls itself “Earth's Biggest Discounter,” yet generates one one-thousandth the sales of Wal-Mart.

Furthermore, unlike, for example, the founders of Google, who make no promises about anything but have delivered $1.7 billion in accumulated profits in that company’s brief lifespan; Patrick Byrne has promised much and delivered $94 million of accumulated losses to date.

But Byrne is very, very good at one thing: attacking people (“tools of Satan,” he has called them) who point out his company’s faults, despite telling shareholders he practices a “Buddhist non-attachment” towards his critics and “ignores the barking dog.”

Readers will recall that during a bizarre August conference call (see “I'm Not a Cokehead and Other Truths from Patrick Byrne, CEO”), Byrne claimed his company was the victim of a coordinated attack by a group of hedge fund louts, myself included, plus veteran journalists and Attorney General Eliot Spitzer, all masterminded by a “Sith Lord” with the tacit blessing of the SEC.

I am not making that up.

Now, the following Motley Fool post contains enough of the Patrick Byrne-style paranoid-attack-dog DNA to make me think he really did write it.

Calling Herb Greenberg a “crooked reporter,” for example, may appear reckless and manifestly non-Buddhist, but Byrne obsesses about Herb the way Nixon obsessed about Woodward and Bernstein. (For the record, Herb Greenberg is no more a “crooked reporter” than Patrick Byrne's father, legendary insurance ace Jack Byrne, was a crooked CEO.)

But it’s the apparent anti-Semitism that makes me wonder whether this is a legitimate post.

For mid-way through it, Byrne’s rant makes a bizarre and gratuitous jab at the supposed pro-Israel bias of the New York Times' excellent and highly respected Middle East reporter, Thomas L. Friedman.

I can think of no clear reason for making the analogy to Friedman and Israel except one: the enemies cited in the post (Herb Greenberg, David Rocker and Jim Cramer) are all Jewish.

Even for the CEO of Overstock.com, hints of a Jewish conspiracy would represent a rather disturbing twist in the ongoing saga.

***

Dear Fools,

For those of you who don't know, Herb Greenberg is a crooked reporter who formerly worked at thestreet.com, then moved to MarketWatch, where he makes a living doing hatchet jobs on whatever companies David Rocker is short.

Sometimes for variety he goes on Mad Money with Jim Cramer (founder of thestreet.com), and together they do hatchet jobs on companies David Rocker is short. (Did I mention that Rocker has been the #1 or #2 owner in thestreet.com, owning as much as 15% of thestreet.com through various on-shore and off-shore entities, such as Helmsman and Compass Holdings ...?)

Cramer and Greenberg's hatchet jobs take an unusual form. They resemble Thomas Friedman's write-ups on the Arab-Israeli conflict: "Let's see, Arabs, Israel, Arabs... Israel, Arabs........ Israel...... okay, I gotta call this one for the Israeli's." In op-ed after op-ed.


Similarly, when Greenberg adn [sic] Cramer attack me together, it generally takes the form of Cramer saying, "Byrne might be a good guy," Greenberg saying something like , "No no, he's a bad guy," "Are you sure? 'Cause I thought he might be a good guy..." "Oh no, he's definitely a bad guy." "Well...OK OK, he's a bad guy."

Oh, did I mention that Cramer founded thestreet.com, Greenberg cut his teeth there, and Rocker has been the most significant owner outside of Cramer himself?

Anyway.... Herb came to his end of year piece on worst CEO's of the year. I think he must have written a couple dozen on me in the last two years, but I did not mind, except for the creepy ones (complaining about how I don't always answer his email promptly? Geeesh: he reminded me of a scorned woman.)

And yet,after all this love, he left me out. I did not even the [sic] make the #1 spot here! I'm hurt. Of course, maybe he is getting some legal advice at the moment that explains his ducking his pat writings now....

Best,
Patrick

***

Jeff Matthews
I Am Not Making This Up


© 2005 Jeff Matthews

The content contained in this blog represents the opinions of Mr. Matthews. Mr. Matthews also acts as an advisor and clients advised by Mr. Matthews may hold either long or short positions in securities of various companies discussed in the blog based upon Mr. Matthews' recommendations.

37 comments:

Its_strange said...

I had read that and found it so bizarre i felt i had better think long and hard before making a comment . But now there are more posts and "interviews" and radio shows to think about. And Patrick seems to have said he plans on giving us all even more to think about in the coming week. ...

By the way Ruddy Boyd from the NY Post is on the NCANS blog poking holds is more of Phils innuendo

Its_strange said...

" For the record, Herb is no more a crooked reporter that Pat's father was a crooked CEO " ..I know nothing about Jack Byrne tenure as a CEO . I do know he is COB of ostk and has been in the past. And the street deserve to hear from him , now

padawancowboy said...

Jeff,

Why did you delete my post?

~ PC

Jeff Matthews said...

This is not a Thomas Friedman book review forum.

padawancowboy said...

Jeff,

Is context/motivation not relevant?

~ PC

rboyd said...

i understand Its_Strange's and JM's concern---PB's language has been inept, and his logic on the Sith-centered conspiracy has been remarkably undisciplined.

I must say though, having talked to him any number of times, i do not see him as a "hater" along these lines. i beleive he regards all men as equal.

my two cents, for what its worth.

BelowTheCrowd said...

Jeff,

Speaking as a guy who is Jewish, whose dad was Israeli, and who continues to have significant family in Israel today, I've got to confess that I wonder what you see here that I don't.

I don't see how comparing the Cramer/Greenberg style of "discussing the issues" with Friedman's style of doing the same is anti-Semetic in any way.

For better or worse, Friedman usually does come down on the side of Israel, to the point where it almost is a foregone conclusion when you read one of his pieces. That's his perogative as a commentator. Byrne seems to be alleging that the conclusion to Jim and Herb's debates about Overstock is just as much a foregone conclusion.

The fact that all three happen to be Jewish seems to be completely incidental to the argument he's making.

Personally I don't buy Byrne's argument because both Cramer and others on TSC have been bullish on OSTK at various points and I suspect that to the extent that Cramer is no longer so bullish, the primary reason is OSTK's recent underperformance, not anything Herb says.

But to paint this as an anti-Semetic comment seems to be almost as hysterical as some of the things Byrne has said about shorts.

-btc

pistachio said...

Incredibly disingenuous claptrap. You should really be ashamed of yourself. The analogy Patrick made was quite easy to understand. Only someone with an agenda could get that so wrong.

PS JM has deleted this response once already and will assuredly do so again. And I will post it again.

DaleW said...

I agree with Below. The fact that all the players are Jewish is incidental to the argument. Not that Byrne's not a loonie, just not on this issue, in my opinion.

settlements said...

Jeff,

You have once again out done yourself. I must commend you on coming clean with your real personality/agenda.

Can I ask you why you have failed to make mention of Gradient's Law Firm resigning the case due to a "conflict". Now by the meaning of conflict that would infer that Wilmer Cutler & pickering have clients that represent both sides of the naked shorting issue and they chose the side of the Company feeling abused over Gradient. What does that tell ya?

I think that if you do even the most cursory of investigations you will make note that Steven cutlr [recent former Director of SEC Enforcement] is now at Wilmer Cutler.

The cards are all lining up against you and the boyz. Maybe you should go out a learn a new gig before the men in black show up with those silver bracelets.

Its_strange said...

When OSTK offers any "proof" Gardient or Rocker has done something wrong please post it here. So far they haven't even made those affidavits part of the record.

I see OSTK extended the free shipping.

Jeff Matthews said...

Seems like Overstock sends me a "last day for free shipping" email every day.

Funny thing is, I after they sent me a 10%-off email coupon last week I decided to check out the great new inventory Patrick "uploaded" after the IT melt-down and buy something.

But it all looked the same as it did before the big "upload." A bunch of miscellaneous junk. I bought nothing.

If anybody out there is actually finding great bargains on the site, I'd like to hear about it. And be specific, please.

Its_strange said...

I'm wondering about this "upload" myself. And it all looks the same to me as well

The Stanley utility knives ( if made of steal and not plastic )seems like a good deal for me and a bad deal for them. Anyone who plays a part in building homes uses 4-6 a year....i didn't buy them

Dan said...

A few months back I was in the market for cheaper computer for my parents. I tried finding one on Overstock.com but it did not seem like the deals were that hot. I also could not find a single review on any of their available computers. It seemed like everyday I checked, they had the exact same computers available, but still no reviews. After checking out some retailer review sites (reseller ratings, shopping.yahoo) i noticed many complaints that overstock would remove reviews if they were negative. That was a giant red light to me. I use Amazon quite often and one of the biggest reasons is because of the customer reviews. I just can't bring myself to part with my cash w/o some idea of what im getting myself into. Sorry big O. I ended up purchasing my parent's computer from Tiger Direct and was very pleased.

brian said...

overstock is okay, as I bought from them in the past, but they tend to let their merchandise go stale. By this I mean since they are in effective the last stop discounter (they acquire their stock from merchants who could no longer sell them) they hold onto the inventory until they sell out as I don't think they sell their remainders to anyone else.

Its_strange said...

OSTK's deal with Chrysler is 3 weeks old . Anyone do the deal ? How was it ?

Revets said...

re: deals on OSTK.

They've got good deals on bedding... sheets, comforters, that "memory foam" stuff, etc.

That's about it though. Recently moved into a much larger home and have been searching for plenty of household decor and smaller items (lights, endtables, etc.) - I've been underwhelmed by their supposed rock-bottom deals.

But if you want sheets, I highly recommend them.

Aaron Koral said...

You know what the sad thing is about OSTK? It's that PB is keeping himself busy posting on chat boards like The Fool and not spending enough time shoring up the operational problems facing OSTK. Everything from the ERP implementation problems to the LARGE increase in marketing expenses to its fulfillment partners in the quarter just past speaks volumes about the mismanagement of OSTK. PB is not making things better by issuing senior convertible notes at 3.75%; even if he is retiring some of those notes with the little cash on hand that OSTK has. If OSTK doesn't come up with a way (and quickly) to become profitable by increasing OSTK's inventory and receivables turnover, it's "lights out", as Peter Wolf once sang, for OSTK (but then, I could be wrong though).

Its_strange said...

Interesting story in the NYTimes about the sweater. Seems sales are down and some are wondering if it has become the new fruitcake and they wonder if the gift card has replaced "staple" holiday gifts. You guys should read the story and watch to see how Overstock handles this trend . Could be interesting.

Anyone know how many people OSTK has working for them this year ? Last year ? The year before ? Yahoo has had 426 for as long as i can remember . And that doesn't seem to jive with thier stated growth .

Its_strange said...

Aaron , after Patrick sent Stormy Simon into Rocker's office to " show some leg " i have felt Patrick wants to be a "star" , that he wants to be in a Phil Saunders written movie, that he ain't really interested in running a business. .. Hollywood is calling

Jeff Matthews said...

"its strange": I believe the quote from Patrick Byrne, CEO about the failed attempt to entrap Rocker was "she showed him some thigh"--not "leg."

"revets": how was the ordering/shipping process at OSTK?

Its_strange said...

Jeff, I think you are right . Its right out of a James Bond movie. And Patrick does seem to fancy himself 007 !

Johnny Debacle said...

I've only ever bought memory foam from Overstock. Competively priced but all the other deals seem marginal if that. With Amazon Prime, I dont really go to anyone but Amazon. I actually value knowing that a place will have something rather than the whole "upload" random crap at anytime type of model.

"i noticed many complaints that overstock would remove reviews if they were negative. That was a giant red light to me. I use Amazon quite often and one of the biggest reasons is because of the customer reviews."

Amazon deletes reviews to as do other etailers. I know this for a fact, I've seen otherwise cogent reviews that were negative that just disappear, usually on lower volume items (where I would notice).

Btw that post was complete crap, Jeff.

Revets said...

re: "how was the ordering/shipping process at OSTK?"

As I recall, and it's been a little while, there wasn't much in the way of letting me know my order had shipped or when it was supposed to ship, however the stuff did arrive more-or-less when I expected it.

I'm used to Amazon or Newegg's shipping where you know the exact status at every stage of the order process, and I definitely prefer that, but I can't really complain about my OSTK experiences - all two of them.

Its_strange said...

Phil Saunders over at NCANS is going off about OSTK being down without any news . He seems to imply something unfair or wrong is going on . Well Patrick , please tell your partner at NCANS that Hambrecht downgraded OSTK . Yep, the same Hambrecht that Macklin and Fisher are associated with . The same Hambrecht that does banking for OSTK .

Sam S. Park said...

I seriously considered buying some Christmas gifts from overstock; just to see what the experience would be like. Maybe I'm just a very picky guy, but I couldn't find anything I wanted to buy. Maybe I should sporatically look at their stuff, and by random chance there will one day be something that I want.

Jeff Matthews said...

Right--Craig Bibb of Hambrecht+Co downgraded to a neutral after seeing the free shipping and $1 shipping promotions on the site and concluding things might not be so perky as he thought.

"We still think that it will take either a bankruptcy or nuclear winter for the short bet against Overstock to pay off," his note yesterday concludes.

Not exactly high praise for Overstock.com as an investment. But he may be right.

lflor said...

I don't know about anti-semitic, but I think the "scorned woman" comment is somewhat sexist.

Its_strange said...

i'm sure the longs are hoping Patrick buys thier stock . I'm just kinda wondering at what price. i'm looking forward to a serious review of the 4th quarter and year . I don't think the longs are .

Its_strange said...

Free shipping with a Xmas delivery ..And 10% off diamond jewery . Oh i'm sure the lomgs are hoping Patrick buys thier stock .

Its_strange said...

I'm listening to Patricks CFRN.NET radio interview. Now he is going after Dave Kansas from the WSJ . OSTK lawyer , Wes Christian is due on the show soon . Bob O'Brien as well .

Its_strange said...

Bob O'Brien is Phil Saunders, that we know. But is he also Darren Saunders , producer of the video "Where's my Stock" and soon to be released " Counterfeit Conspiracy" ? Is this Darren Saunders, that posts on the NCANS message boards , really Phil Saunders ? ...And i see the Christian Financial Radio Network had Patrick on and Darren Saunders on. They plan on having Wes Christian ( OSTK's lawyer ) on and they plan on having Bob O'Brien ( Phil Saunders) on. ..Who are these CFRN.NET people anyways ?

Its_strange said...

This is interesting...Bud Burrell ( A Was Christian colleague ) will be doing the Phil Saunders interview on CFRN.net .

Want a good laugh ? Go check out the promo material on the CFRN site for the Phil interview

Its_strange said...

It appears Bud Burrell is not doing the Phil interview . But Phil ain't going to let you down .

Its_strange said...

well ...Tomorrow Phil plans on educating us on hedge funds

padawancowboy said...

its_strange:

How are you able to post and avoid deletion?

Please share.

-pc

Its_strange said...

ERST warns , TTWO has warned , just about all in the video game business have warned . I would love to know how OSTK handled this video games business this year besides giving away 10 XBOX 360