Is Overstock threatening its detractors?

Gary Weiss, one of the great investigative reporters of the business world, posted an email from Overstock's (NASDAQ: OSTK) Director of Social Media to a cybersleuth who goes by the handle "scipio." Weiss describes Bagley's letter as an act of blackmail, and has it posted on his site for all to see. A few choice quotes from Bagley's email:

I don't want to cause anybody unnecessary harm, but I'm beyond tired of the lies.

...Having said that, I'm also very much aware of the impact this could have on your reputation, especially where you live, and I feel obligated to offer you a way out. So, if you're ready to set things right, I'll keep your name to myself and figure we'll both be karmically better off for it.

Weiss sums it up nicely: "No other company in the U.S. would sanction such disgusting, unethical, and legally questionable conduct by a corporate official, made doubly odious by the fact that Bagley was hired to do the bidding of CEO Byrne, and his actions have a long history of being supported and promoted by Byrne.

"Any other corporate board would discharge both Byrne and Bagley -- something obviously inconceivable for the laughingstock, lapdog, functionally nonexistent Overstock.com board."

In spite of all of CEO Patrick Byrne's whining about manipulation and an undervalued stock, we've seen little evidence of anyone else thinking it's such a great deal. With all the private equity money floating around, why hasn't someone made a play for Overstock? Oh right. The company isn't even close to being profitable.

For more insight into the bizarre world of Overstock, check the blogs of Gary Weiss and Sam E. Antar.