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Showing posts from August, 2007

Did Overstock.com CEO Patrick Byrne cook the company's numbers and mislead investors? (Part 3 - The end game)

Blog series: Did Overstock.com CEO Patrick Byrne cook the company's numbers and mislead investors?In the first two parts, I detailed Overstock.com and its management's inconsistent, conflicting, contradictory, and deceitful disclosures in its financial reporting.In part 1, I detailed how Patrick Byrne backtracked and used in his own words, a "a phony accounting standard--pro forma," the reduction of inventory reserves, and the reversal of previously booked nonrecurring expenses to hype up Overstock.com financial performance for the second quarter of fiscal year 2007. Without, the use of that "phony accounting standard--pro forma," Overstock.com's hyped up turn around would have all but disappeared. In addition, I detailed how the reduction in inventory reserves in the second quarter of fiscal year 2007, wiped away Overstock.com's entire improvement in operating income.In part 2 of this series, I detailed the possible manipulation of earnings by Over…

Did Overstock.com CEO Patrick Byrne cook the company's numbers and mislead investors? (Part 2)

At my very first accounting class at Bernard M. Baruch College, I was taught by the great distinguished Professor Abraham Briloff, that "accounting is the language of business." Professor Briloff saw CPAs as the guardians of capitalism against the cancer of white collar crime. However, as Crazy Eddie's paid for my education and gave me a full time salary off the books as I attended college, my goal was to be part of the brutal cancer of white collar crime that infects our great capitalist system. White collar crime is a crime of persuasion. Often, the white collar criminal uses "the language of business" to persuade investors to buy their company's stock at an inflated values. At college, we had many debates about the essence of accounting. Is accounting an art or a science? For the white collar criminal, there is no debate: accounting is a work of art to be crafted.Patrick Byrne's continued hyping of Overstock.com and deceit by using "the language…

Did Overstock.com CEO Patrick Byrne cook the company's numbers and mislead investors? (Part 1)

Part 1:As a cold blooded, heartless, ruthless, and soulless career criminal during my Crazy Eddie days, I learned to always accentuate the positive and deflect from the negative in my dealings with Wall Street. I hardly ever faced an effective questioner whether the person was a Wall Street analyst, investment banker, or auditor. Rarely was I asked good follow up questions.During Overstock.com's recent earnings conference call for the second quarter of fiscal year 2007, Overstock.com's management gave a hyped up explanation of the company's so-called turnaround. The representations of Overstock.com's management went unchallenged and important questions were not asked. I guess that not much has changed since my criminal days at Crazy Eddie.As I listened to Patrick Byrne's delusional rants during the conference call, I was reminded of the movie, "The Silence of the Lambs." Well, Patrick Byrne frequently uses the alias Hannibal on internet message boards. Hi…