Overstock 'jihad' divides father and son
Company Chairman John Byrne may step down because his CEO son is distracted by campaign against 'naked' short selling.
In an interview with CNET News.com, Patrick Byrne acknowledged that taking up the issue, which has made him one of the nation's most controversial executives, has prompted his father to consider stepping down as chairman.
"I've never expected him to (understand) this fight," said Patrick Byrne of his father. "He's been making noise about stepping down."
Jack Byrne was quoted on the Wall Street Journal's Web site on Thursday as saying that "Patrick and I have had some wonderful times together on Overstock, but we've also had some stormy times. I'd rather keep my relationship with my son than be the chairman of the board...I don't think it's a wise idea to be chairman with a headstrong son."
The younger Byrne said that his father "thinks this is too much of a distraction for me" and disagreed with his father's assessment, but did admit that he has been distracted at times.
Patrick Byrne said he commits 10 to 12 hours per day overseeing the e-tail company, but then dedicates most of his spare time to waging what he calls a "jihad" against short sellers. He says unscrupulous "shorts" use a variety of ways to illegitimately pressure a stock, such as stirring up bad press about a company. Such accusations, as well as a sometimes rambling hour-long speech last summer during a conference call with analysts--when he alleged a mass conspiracy existed against his company--have prompted many Wall Street insiders to label Byrne a whacko, he says.
Nonetheless, Byrne has kept up his fight. Last August, Overstock filed suit against Rocker Partners, a short-selling hedge fund, and Gradient Analytics, a research firm. Both firms are bearish on Overstock, which is profitless.
Apparently, not everyone is writing Patrick Byrne off. The Securities and Exchange Commission has opened an investigation into Rocker Partners and Gradient, according to several published reports. However, it recently backed off from subpoenas it sent to journalists critical of Overstock and whom Patrick Byrne has accused of being "lackeys" for short sellers.
Of his and his father's relationship, Patrick Byrne says it's as good as ever.
"There is no feud whatsoever," Patrick Byrne said. "We remain quite close...we're wired a bit differently. He brought me up teaching me about how bad Wall Street is, how Wall Street is so evil."