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Showing posts from July, 2008

Why Jonathan Johnson is the Right Choice for President of Overstock.com

The more that I think about it, I believe that former Vice President of Corporate Affairs and Legal, Jonathan E. Johnson III, is just the right man to take over Patrick Byrne’s role as President of Overstock.com (NASDAQ: OSTK). Patrick Byrne retains the title of Chief Executive Officer.Role as babysitter for the 40-year-old CEO of a public companyAccording to Overstock.com’s press release, it was Jonathan Johnson’s early role to provide “adult supervision” as babysitter for his boss Patrick Byrne, the immature, lying, delusional, and paranoid CEO of Overstock.com. Jonathan Johnson joined Overstock.com in 2002 and Patrick Byrne was a tender 40 years old when Johnson began babysitting the CEO of a public company. Jonathan Johnson provided key feedback to Patrick Byrne in shaping Overstock.com’s policy of blaming others for Overstock.com’s management failures through litigation rather than make money through innovation. He is the key legal advisor for Byrne's relentless and despicabl…

What is Mark Mitchell Hiding About Himself, Deep Capture, and Overstock.com?

Mark Mitchell, a washed up former journalist who is now a paid shill for Overstock.com (NASDAQ: OSTK) CEO Patrick Byrne's private vendetta web site called "Deep Capture" is afraid to answer my questions.
For example, Tracy Coenen and I heard that Mark Mitchell was escorted from the building when he left his former employer, Columbia Journalism Review. According to Tracy Coenen’s blog:
This is also a good time to mention that the guy "from the Columbia Journalism Review" is apparently Mark Mitchell, Byrne's paid shill. According to a confidential source, Mitchell was escorted from CJR under mysterious circumstances. Meanwhile, Patrick Byrne has taken steps to separate his Deep Capture smear web site from Overstock.com while admitting that he founded it. According to the Deep Capture web site:
Deep Capture is not part of Overstock…. However, the Deep Capture web site goes on to direct the reader to click on a link (http://www.overstock.com/?TID=deepcapture) t…

Are Overstock.com's Stock Buybacks "Destroying Shareholder Value"?

In Berkshire Hathaway's (NYSE: BRKA) 1999 annual report, Warren Buffett once said:Now, repurchases are all the rage, but are all too often made for an unstated and, in our view, ignoble reason: to pump or support the stock price... We will not repurchase shares unless we believe Berkshire stock is selling well below intrinsic value, conservatively calculated."Note: Bold print and italics added by me.So, I ask the question, "Why does a perennial money loser like Overstock.com (NASDAQ: OSTK) buyback its shares?" After a careful analysis provided below, I believe that Overstock.com's "unstated" reason for its share repurchases, like many other companies, is "to pump or support the stock price."Patrick Byrne's father, former Ovestock.com Director John "Jack" Byrne who resigned and bailed out in 2006 over disputes with his son, is a former business associate and close friend of legendary investor Warren Buffett. Patrick Byrne himself…

The SEC stands by while Overstock.com continues to violate Regulation G and overstates EBITDA in latest report

Before we begin let's review some of Overstock.com's history of false and misleading disclosuresOverstock.com (NASDAQ: OSTK) CEO Patrick Byrne likes to call himself a “humble servant” to his company's shareholders and a “market reform advocate” to the investing public, while he and his company have a documented long history of false and misleading disclosures and utterly despicable behavior such as stalking and smearing critics with its in-house black ops team. As previously detailed in this blog, from December 2000 to March 2002, Patrick Byrne had lied about Overstock.com being profitable when the company was never profitable at that time. Overstock.com’s unprincipled management team intentionally violated GAAP in reporting revenues from at least fiscal year 2000 until the SEC Division of Corporation Finance recently forced the company to report revenues in compliance with GAAP. To make matters worse, the company misled the SEC Division of Corporation Finance about the ma…

Limiting Auditor Liability is Plain Dumb

Audit firms put too many relatively inexperienced staffers on audits to do much of the leg work. Most auditors never take a single semester in-depth college level course devoted exclusively to combating fraud or understanding weaknesses in internal controls before graduating college. Worst yet, too many topics covered on the CPA exam have to be learned in a cram CPA review course, only after potential CPA candidates’ graduate college.Now some clowns at certain audit firms want to limit their liability for failed audits? As a former CPA and the criminal CFO of Crazy Eddie, I advise public accounting firms to increase the professional competence of your staffs and improve your audit procedures if you truly want to reduce your liability exposure for your screw ups. In the AAO Blog, Jack Ciesielski writes: The funny thing is - the audit is under the control of the auditor. They could "audit better," if they chose to do so. And they could walk away from audits that they cannot au…

Shop To Earn Tries to Bully Bloggers with Litigation

Shop To Earn (website: ShopToEarn.net), a multi-level marketing company, apparently does not like anyone questioning their business practices. Recently, two bloggers have received letters from a Shop To Earn attorney threatening legal action against them as a result of their critical examination of the company's business practices. According to a blog post at Everyday Finance:Unfortunately, my original post from several weeks ago, which had a balanced, yet critical review of the business process, had to be taken down due to the threatening emails sent to me by the legal counsel of Shop To Earn. Until I investigate my rights/risks further, I have removed parts of the post as of July 14, 2008 to comply with the uncompromising, bullying (in my opinion) behavior of this company. Readers had benefited from the important information displayed, but I really don't have the time or energy for a prolonged legal battle to defend my free speech. Fortunately, I have an LLC firewall between…