According to an 8-K recently filed with the SEC, Overstock.com (NASDAQ: OSTK) CEO Patrick Byrne will be taking home what looks like a pretty small pay package: A bonus of $0 for his work in 2007, and a salary of $0 for 2008. He will receive a restricted stock grant of 15,000 shares, but that's pretty reasonable.

But at a cost of nothing, Patrick Byrne is still a very, very expensive CEO for the company's shareholders. His postings on message boards and stalking of the company's critics may be creating very serious liabilities for the company, and he and Overstock are currently the subject of an SEC investigation.

And that's to say nothing of the fact that, operationally, Overstock.com has been nothing short of an abject failure. The company has lost enormous sums of money since its inception. The company's sales growth has stopped, and as Sam Antar has written on his blog, Byrne has established a track record of failing to deliver on his projections.

So Byrne might seem like a bargain at $0 per year, but it's a bargain in the same way that buying lead-tainted toys for 50% off is. Your children's safety and the well-being of a public company are too important to cut corners. In the past couple months, Overstock has lost hundreds of millions of dollars in market value.

The cost of having Patrick Byrne as your CEO isn't $0 after all.

As Tracy Coenen discussed earlier, Overstock.com (NASDAQ: OSTK), co-founder, president and chief operating officer Jason Lindsey resigned and left the company's board of directors.

Lindsey had already retired once but came back, in CEO Patrick Byrne's own words, "when I screwed it up a couple years ago". Byrne added that "He's done a superb job. Now that it is back in a solid trailing twelve month cash-flow-positive position, he wishes to return to our previous arrangement. While Jason won't be as involved in the day-to-day operations of the company, he will still oversee special projects in a part-time capacity."

After Byrne's pat on the back and attaboys, the stock hit a new multi-year low in this morning's trading.

There are a few things to keep in mind here. As Gary Weiss wrote on his blog,

Lindsey says he is leaving because he is "ready to take a less active role in order to spend time on some outside ventures." Baloney. Note that he is leaving as director -- a position that surely requires no major heavy lifting in a board as supine as this one.

Sam Antar is also suspicious of the resignation that comes in the midst of an SEC investigation: "Was the SEC investigation of Overstock.com an undisclosed factor in Jason C. Lindsey's resignation?" Antar also discusses accounting questions surrounding Overstock.com, and comments from Mr. Lindsey on conference calls that raise questions about his involvement.

One thing's for sure: The market's reaction to Lindsey leaving doesn't suggest that traders buy Byrne's "everything is hunky dory" assertion that Lindsey left because he has restored the company to such great condition he is no longer needed in a full-time role.

As Gary Weiss discussed on his blog, Overstock.com (NASDAQ: OSTK) CEO Patrick Byrne issued a press release last night to complain that his company was back on the REG SHO list, a list of stocks experiencing failures to deliver often indicative of naked short selling. Overstock had disappeared from the list for 6 days after 669 consecutive days on the list.

Byrne added that "Here we are on the eve of the third anniversary of Regulation SHO (January 3) and hundreds of companies continue to be manipulated -- right under the SEC's watchful eye."

Here's where it gets interesting. According to a countersuit against Overstock filed by Copper River:

When asked about the December 2003 short squeeze, Byrne replied, "when opportunities come along where we can knee the shorts in the groin, that's always good for fun and amusement."

What did Byrne mean by that? If Patrick Byrne engaged in perpetrating an artificial short squeeze to "knee the shorts in the groin", that would be manipulation!

Good news for Overstock.com (NASDAQ: OSTK) customers: The company ranked number 1 in the Online Customer Respect Study issued by the Customer Respect Group for the fourth quarter of 2007.

In a press release announcing the accomplishment, CEO Patrick Byrne said, "Our No. 1 ranking is more validation of our overwhelming focus on treating our customers respectfully and honorably. We want to offer the best deals on the web while being the easiest and safest site to use."

It's great that Overstock's customers are being treated well, but how about the company's investors? Overstock has an accumulated deficit of over $238 million -- so the company's service to its investors has been subpar at best.

But that's all OK, because Overstock has a "overwhelming focus on treating our customers respectfully and honorably." Profits be darned!

On Friday December 7th, Overstock.com, Inc. (NASDAQ: OSTK) CEO Patrick Byrne appeared on CNBC and said that the company was "having a pretty nice Christmas." But he also said that fourth quarter (Q4) GAAP net income would be between -1% and +1% of revenue due to aggressive sales promotions.

The chart at right shows how the stock has responded since that day, losing more than 25% of its value. One shudders to think what would have happened if Overstock had had a "pretty bad" Christmas.

But rather than accept responsibility for his company's inability to deliver any kind of fundamental strength to shareholders, Patrick Byrne has played the diversion card: In a rambling press release put out on Thursday morning, he complained that the company has been on the SEC's REG SHO list for 666 consecutive trading days: "Apparently, the SEC is not serious about enforcing the close out provisions of Regulation SHO or stopping 'market manipulation that is clearly violative of the federal securities laws.'"

Maybe Overstock is being manipulated by short-sellers. But instead of whining about it, Byrne should shut them up the way that good companies to: Deliver on the fundamentals. A "pretty nice Christmas" that might be break-even and sends the stock tumbling doesn't count.

Nobody likes a whiner, and Byrne's track-record of under-performance and incessant complaining gives investors little reason to be optimistic -- unless of course they're short the stock.

Monday was another ho-hum day on Wall Street. A bank announced another $10 billion in subprime writedowns, people continued to speculate about what the Fed will do, and Overstock.com (NASDAQ: OSTK) CEO Patrick Byrne made a fool of himself.

Byrne appeared on CNBC's Closing Bell on Friday to talk about his company's holiday season. Byrne said that the company was "having a pretty nice Christmas", and that gross bookings are up about 10% so far over the prior year quarter.

However Byrne also warned that gross margins would fall due to aggressive discounting, with Q4 income of +/- 1% of sales and EBITDA of between $5 and $10 million.

If you want to get Patrick Byrne's take on naked short selling and the alleged conspiracy (involving class-action lawyers, hedge funds, and journalists) against his company, Overstock.com (NASDAQ: OSTK), then Deep Capture, the Movie is a good place to get it.

In the 45th slide of the presentation, to provide evidence of the journalistic conspiracy, Mr. Byrne plays a clip of former New York Post business editor Dan Colarusso speaking to Herb Greenberg, Joe Nocera, and Dave Kansas: "When I think of Patrick Byrne ... We have barrels of ink and stacks of money and all the resources in the world at our disposal, legal and, indeed our media, to crush him."

Is this indicative of a conspiracy? Speaking on Mad Money with Jim Cramer about Mr. Byrne, Herb Greenberg said that "the real conspiracy, if there's a conspiracy, is a conspiracy by these people to silence the critics."

Exactly. And here's a tip for Mr. Byrne: Journalists tend to be big believers in free speech. When you attack their ethics, attempt to intimidate them into silence, and an employee of your company sets up a website to smear them -- that angers journalists, and they jump to each others' defense.

Was there a conspiracy of journalists against Patrick Byrne? I seriously doubt it. But Byrne's efforts to silence his critics have made him an enemy of journalists and lovers of the First Amendment everywhere. Maybe that's the conspiracy.

In case you haven't been paying attention, Overstock.com, Inc. (NASDAQ: OSTK) CEO Patrick Byrne said on a television interview that "you might as well burn" kids who don't graduate from high school.

While I thought the reaction to his comments was overblown (A poorly worded but passionate defense of his support of school vouchers), the NAACP called on him to apologize. Of course, Byrne being Byrne, he refused.

The part that offends me is that Byrne put out a press release using the money of Overstock shareholders to defend his stupidity (the release was disseminated on Market Wire):

"Recently, video-taped comments I made in a school voucher debate setting were edited and posted online. Subsequently, some journalists erroneously claimed that I dismissed these statements as having been taken out of context. This assertion is false. In fact, my claim is far stronger: the clip is a lie, because it inverted what I actually said, which is far worse than simply being 'taken out of context'.

Not content to apologize for his comment about burning kids, Byrne is now burning Overstock's money to defend himself. Why is Byrne using shareholders' money to defend comments he made in a personal political crusade that has nothing to do with the company?

The saga continues...

Overstock.com Inc. (NASDAQ: OSTK) Chief Executive Patrick Byrne's long, rambling apologies to shareholders for his company's terrible performance usually provide a needed humor break from the pressures of earnings season. This quarter, though, Byrne offered a shorter statement about the company's improving financial performance.

To be sure, the quarter was merely awful instead of disastrous. The company lost $4.7 million, or 20 cents per share, compared with $24.5 million, or $1.19, a year earlier. Revenue rose 3% to $161.9 million. Analysts expected a loss of 39 cents and revenue of $155.1 million, according to Thomson Financial.

In his letter, Byrne sounded ecstatic. The good news isn't shocking given the better-than-expected quarter reported by eBay Inc. (NASDAQ: EBAY) and bodes well for next week's report from Amazon.com (NASDAQ: AMZN). Byrne's missive is reprinted below for all to enjoy.

Dear Investor:

In Q3, we generated positive EBITDA for the first time in a non-Q4 quarter. I believe this validates our view that a profitable business model is emerging, particularly in light of our de minimus capital expenditures ($316K during Q3).

We also returned to positive (albeit modest) top-line growth despite halving our marketing expenses. A year ago, I said that we had a laundry list of projects we were working on to improve our marketing efforts. Since then, our marketing dollars have become twice as efficient. We are about one-third of the way through the list; I do not know what the remaining two-thirds will bring.

Expenses are drum tight, product selection is strong, operations are humming, and customer satisfaction is extraordinary. We are superbly positioned for the holiday season.

I look forward to our call, and as always, remain,

Your humble servant,

Patrick M. Byrne

Visit AOL Money & Finance for more earnings coverage

Ok, so Overstock.com, Inc. (NASDAQ: OSTK) can't seem to make any money, and even it's once torrid sales growth has gone negative.

But that didn't stop the company from spending $120,000 lobbying the federal government in the first half of 2007, presumably on behalf of CEO Patrick Byrne's anti-naked short selling jihad. In the past, Byrne has referred to his high profile, highly-delusional campaign against the "scandal" as his "mitzvah".

But now I have to ask:

Mr. Byrne: Since when is paying Washington lobbyists $120,000 of your shareholders' money considered a mitzvah?

If I were a shareholder, I'd be wondering why my money was being used for Patrick Byrne's mitzvah instead of for my practical purposes such as, say, creating a profitable business.

For my coverage of the Overstock freak show, check out Gary Weiss and Sam Antar's blogs

While the shareholders and board of directors at at Whole Foods Market (NASDAQ: WFMI) wish CEO John Mackey would pipe down, and the board at Overstock.com (NASDAQ: OSTK), if it exists, seems indifferent to CEO Patrick Byrne's Regulation FD-flouting rants, Herb Greenberg has a nice WSJ column (subscription required) on executives who take a different approach. To borrow a line from Calvin Coolidge, these companies have decided that nothing they don't say will do them any harm.

The piece talks about a few thinly traded, closely held companies, several of which list their shares on the OTC markets, which tend to be highly illiquid and provide little exposure. These companies don't hold regular conference calls and don't present at investor conferences, but some have actually provided investors with very strong returns.

The highlight of the column is a company called Expeditors International (NASDAQ: EXPD), a transportation and logistics business. Expediters responds to shareholder inquires by filing 8-Ks with the SEC providing pithy, and often bitchy, responses to questions. The latest series is one of the strangest 8-Ks I have ever seen.

Score one for sanity in financial markets.

In the midst of outcries about naked short selling from a group of conspiracy theorists deemed the "Bologna Brigade" by one of my favorite investigative journalists, Gary Weiss, the SEC has found no evidence of manipulative naked short selling of IPOs.

The agency studied 295 IPOs over 16 months and, according to the Wall Street Journal, didn't find evidence that traders engaged in naked short selling were the cause of fails to deliver. According the SEC, failures to deliver in IPOs "cannot be explained by short selling in general or 'naked' short selling specifically."

This could be bad news for the anti-naked short selling zealots led by the entertainingly insane Patrick Byrne, CEO of Overstock.com (NASDAQ: OSTK). They have long held fails to deliver as being the indicator of widespread naked short-selling but, according to the SEC, that isn't the case, in least in the case of recent IPOs.

The naked short selling issue looks like a red herring to me, tossed around by CEOs whose stocks are underperforming because management has established a track record of OPUD -- Over-promise, under-deliver. In the case of OSTK, the only fail-to-deliver investors need to worry about is Patrick Byrne's failure to deliver profits.

The Smart Money Stock Screen [subscription] in today's Wall Street Journal gives a list of eight stocks that have "recently been the subject of unusally heavy short selling." The premise of buying heavily-shorted stocks is that if the shorts all cover at once, there will be a short squeeze, which Trade2Win defines as, "When the price of a share rises and investors who sold short rush to buy it to cover their short position and cut their losses. This, in turn, drives the stock price higher, which results in even more short sellers feeling compelled to cover their positions." Jim Cramer illustrated it on his show Mad Money by squeezing toothpaste out of a tube.

Is this a good way to make money? I doubt it. First of all, short-sellers do famously strong, in-depth research. They are famous for catching issues such as accounting fraud (like Enron), inventory problems, and business model deficencies long before Wall Street analysts catch on. Before you buy a heavily shorted stock, try to find out why people are so bearish on it. Believe it or not, stock message boards are often a good way to do this kind of research (Just don't buy or sell based on anything anyone says on a message board).

Rather than blindly buying stocks with high short interests, I think investors would do well to learn about the in-depth research methodologies employed by these investors referred to by Overstock's (NASDAQ: OSTK) Patrick Byrne as "sith lords." One of the most famous short sellers is Manuel Asensio, author of Sold Short: Uncovering Deception in the Markets. While some (like AsensioExposed.com) would say Asenio is unscrupulous, his down in the trenches research techniques discussed in this book can benefit the regimen of every investor.