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Patrick Byrne, the petulant chairman and CEO of the king of corporate crybabies, Overstock.com (NASDAQ: OSTK), issued yet another rambling press release on Friday, lamenting the fact that the company had reappeared on the Regulation SHO Threshold List after its stock price tanked following quarterly earnings that disappointed investors. Byrne said that ". . . the price of it fell 40% when we announced earnings that largely beat the Wall Street consensus expectations."
Regardless of how impressed Mr. Byrne was with yet another quarterly loss from his company, Stifel Nicolaus analyst Scott Devitt wasn't buying it. He downgraded the stock from hold to sell, pointing out that the company's revenue growth benefited from "fairly easy comps," adding that Overstock "may never achieve operating margins above 2%-3% at scale."
But never mind analyst predictions. Let's look at Patrick Byrne's predictions. In a 2001 interview with The Wall Street Transcript, Byrne said that by 2004 he "would want to see us well over $400 million and as profitable as hell. Making a ton of money. I want to see that next year."
That was seven years ago, and Overstock still has not reported anything resembling a profitable year, although Byrne is predicting that 2008 will be profitable in spite of a year-to-date loss of $10.4 million. Apparently Mr. Byrne is upset that no one is taking his forward-looking statements seriously anymore, but the fact is that, historically, Mr. Byrne's projections of profitability have been horrifically optimistic, and investors who believed him got their stuff handed to them.
If Mr. Byrne stopped wasting time lashing out at critics and devoted a few hours a day to backing up his big talk, the critics would go away and the stock would thrive.
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Reader Comments (Page 1 of 1)
7-28-2008 @ 2:54PM
Agamemnon said...
I wonder what you are being paid by the shorts? Ironic that this morning G Weiss, another pathetic journalist talks about your great article on a similiar matter and you respond by writing another article. Nothing like originality. Did you plagierize when you were a kid?
7-28-2008 @ 5:39PM
Unknown said...
Zac, where did you go to school? This is yet another piece of work that presents itself as being written by the uneducated.
Yes Overstock reported a loss, in fact they reported a loss that was expected and a loss that was less than analysts predicted. How does that equate rationally into a 41% market cap loss? Was anybody predicting a profit before they reported the loss? Was the market overpriced by 80% since the last quarterly filing? Does what took place in 2001 have anything whatsoever to do with today?
The fact that this downgrade came on Options expiration day, the fact that the Regulation SHO list validates that the fails were accumulated leading into this day, and the fact that the downgrade brought those options that were well out of the money into the money on closing day says a lot. This was orchestrated and you, the fool, couldn't figure that out. the best you can come up with are the words of a CEO that took place 7 years ago and somehow equate that to a 41% drop in todays market cap.
When the guys with handcuffs come, I hope they put you in a cell with Sam and Gary. You guys can sit together all day and say - How stupid were we in being so obvious?
7-28-2008 @ 5:16PM
John Rowe said...
Just curious, why are the both of these writers always attacking overstock?
Its terrible to attack people they way they always do like its their job to do it. And its becoming obvious everytime I read these two.
are they paid criminals , paid to trash overstock?
I owuld demand an investogation on everything these two wrote, since naked shorting became a Global crime.
7-29-2008 @ 1:31AM
Patrick Byrne said...
Thanks, folks. It's nice to see total strangers respond to the standard bromides like this.
Patrick Byrne
7-29-2008 @ 8:34AM
cutty said...
Patrick Byrne, .........the king of corporate crybabies.
Although he would have good reasons to do so, I did not hear him complain much about overstock. He said it is a big problem for the SYSTEM, but you failed to hear this apparently.
What is this? a short circuit between right and left ear?
cutty
7-29-2008 @ 8:59AM
SHOMeTheMoney said...
Zac, stop picking on Patrick. Go forth and slay dragons in your own backyard. Start out with Geoffrey Eiten and Charles Moskowitz.
Patrick, stop wasting time on chat boards and blogs. Go forth and produce a profit.
7-29-2008 @ 9:48AM
SHOMeTheMoney said...
SHOMeTheMoney issues a short term STRONG BUY on Overstock.com today.
There's an adult supervisor at the helm now.