Monday, November 27, 2017

Marc Cohodes Buys Stock & Vanishes From Overstock CEO’s Smear Site

  • In recent months, every disparaging reference to former hedge fund manager Marc Cohodes was removed from Deep Capture, a website that viciously smears the financial press and critics of CEO Patrick Byrne.
  • Cohodes acquired a position in Overstock shares (NASDAQ: OSTK) beginning in May 2017, and hyped Overstock at a widely publicized Grant’s conference on Oct. 10, saying the stock was going “way the f**k up.” His praise of the company caused the shares to climb as much as 8.7% on the day he spoke at the conference.
  • By late October 2017, Cohodes’ name was completely excised from the Deep Capture posts that had falsely claimed he improperly colluded with the press. The names of journalists and other Byrne targets were not removed from those posts. A post referring to him favorably was not touched.
  • Coinciding with his vanishing from Deep Capture, Cohodes has lavishly praised Byrne, falsely contended that the smear campaign is a “legacy” issue of no current relevancy, derided Byrne’s victims as “haters,” and said that targets of Byrne’s smears should “let it go” even though Byrne has never retracted his defamatory claims or closed his website.
  • Removal of Cohodes’ name from Deep Capture was not disclosed by Cohodes or Byrne, or by the website.
People change their minds about stocks and CEOs all the time. But I am deeply troubled by the way a retired money manager named Marc Cohodes, who once was sued by, has morphed into a shrill advocate of the company. He also has become a tireless shill for its CEO, Patrick Byrne, a con artist who has cooked the books, attacked the press and stalked critics.

His sudden conversion has been written up in Bloomberg and Barron’s, but with all due respect to the fine journalists who wrote those articles, they did not tell the full story.

What these articles did not point out was that Byrne has done Cohodes a really big favor in return for becoming both a shareholder and a lapdog—a favor so significant that I believe that it may be construed as compensation:

In recent months, every disparaging reference to Cohodes has been removed from posts that had previously attacked him on Deep Capture, a fake news site Byrne created in 2007 to harass, stalk and smear critics, short-sellers and the media.

It is true that the Deep Capture site was discredited by the forgery conviction of the one of the founders and longtime operators of the site, Byrne aide Judd Bagley, and by a devastating 2016 libel verdict which excoriated Byrne and found that the truth "was of no consequence” to him and Deep Capture. However, despite this, I have no doubt that removal of his name was worth a great deal to the hypersensitive, egotistical Cohodes.

According to Bloomberg, Cohodes commenced his stock positions in Overstock in May 2017 and added to them after meeting with Byrne a month later. He appeared at a Grant’s conference on Oct. 10, giving an enthusiastic promotion of the stock, which immediately staged a run-up, aided by Cohodes’ intense hype and resulting publicity.

After buying the stock, Cohodes lavished praise on Byrne at the Grant's conference saying "I admire him" and through his Twitter feed, despite his history of atrocious behavior (detailed below).

After taking his Overstock position, Cohodes also engaged in a vigorous behind-the-scenes effort to pressure critics to stop criticizing Byrne on Twitter. He has made phone calls and sent emails and text messages to various parties, myself included, recently telling me to “lay off Byrne.”

I could not do so in good conscience because Byrne has never retracted a single one of his lies. In addition, Byrne has never apologized to me for his vicious attacks against me in retaliation for the accounting shenanigans that I exposed, that he denied, and in which I was vindicated—Overstock was forced to restate its financial reports.

Cohodes has never provided any facts to support his view that Byrne has changed in any way whatsoever—that his character had improved, that he is no longer dishonest, no longer ready to cook the books if it suited his purposes, no longer willing to stalk and smear critics. In fact, by word and deed, Byrne has reiterated that he stands by everything he has said and done.

Nevertheless, Cohodes has been insistent, constantly nagging me directly and through third parties. He even made up out of thin air a personal history between us that never existed, to support his claim that I owed him an obligation to shut up about Byrne. It was strange and creepy, it was childish, and it made no sense.

It is still strange and creepy, but now it is starting to make sense.

How Byrne Expunged Cohodes From Deep Capture

A comparison of Deep Capture posts as they currently appear, vs. recordings of their past appearance on the Wayback Machine, shows how Cohodes was edited out of disparaging posts on the website. Those posts were not removed and were not edited in any other way. The conspiracies and attacks on journalists remain on the site to this day, but with Cohodes no longer mentioned.

For instance, an attack on the integrity of journalist Bethany McLean, “Fortune Magazine Stonewalls Exposure of Bethany McLean Perfidy,” looked like this as recently as Sept. 29, 2017, according to the Wayback Machine (click on image below to enlarge):

As of October, 23, 2017, two weeks after the Grant’s conference, it looked like this according to Google's cache (click on image below to enlarge):

The editing took place sometime between Sept. 29 and Oct. 23. The Grant’s conference, as noted, was on Oct. 10.

Observe that Byrne has changed “Marc Cohodes” to “[redacted].” This implies that his name was removed by some legal or official mechanism, when in fact his name was taken out to make Cohodes happy.

There was just one mention of Cohodes in that post. But there were numerous references to him in another smear job “Bethany McLean: Your Benefit of the Doubt is Hereby Revoked,” which quoted emails that were obtained through pretrial discovery in a lawsuit not involving Overstock. Its purpose was to show a conspiracy between Cohodes and McLean and it attacked the integrity of McLean, Roddy Boyd and Herb Greenberg (all investigative reporters). The three are sneeringly referred to as “journalists,” using scare quotes, and McLean, the principal target of this post, is attacked at length.

The Deep Capture post looked like this as of Sept. 29, 2017, according to the Wayback Machine (click on image below to enlarge):

But by October 22, twelve days after Cohodes did his pump job at Grant’s conference, and coinciding with his pleas to myself and others to shut up about Byrne, every reference to Cohodes was cut out of that post. It now appeared like this, according to Google's cache (click on image below to enlarge):

It was like that throughout the post. Rather than delete it entirely—he was still on board with the underlying conspiracy theory and attacks on journalists—Byrne removed Cohodes’ name from this Judd Bagley post, which turned a routine exchange between reporter and source into the convening of an evil cabal.

Byrne even retained the ridiculous suggestion that “the emails you’ve just read are the real reason Bethany McLean made a sudden departure from the world of business journalism earlier this year.” That’s a reference to her departure from Fortune to work for the prestigious Vanity Fair magazine. That would be considered upward mobility anywhere but in Byrne’s nutty world—and he still feels that way.

That nonsense was retained. McLean’s, Boyd’s and Greenberg’s names were retained. The attack on their integrity remained. Cohodes, however, was gone.

Another example is a crude 2008 Byrne smear job on journalist Roddy Boyd.

It still retained Cohodes’ name on Oct. 13, 2017, three days after the Grant’s conference, according to the Wayback Machine (click on image below to enlarge):

But sometime between October 13 and October 20, 2017, according to Google's cache, the article was edited to look like this (click on image below to enlarge):

Cohodes’ name was removed from the end of the sentence “Hedge funds can do no wrong, particularly if they belong to a small constellation whose brightest lights are Stevie Cohen, Dan Loeb, David Einhorn, Jim Chanos, and David Rocker.” He was retroactively removed from the conspiracy nine years after Byrne concocted this rubbish.

The same editing job took place in post after post in which Cohodes was negatively mentioned prior to becoming a Byrne fan and shareholder. In every instance he was gone by the latter part of October, after he had acquired shares and had become a Patrick Byrne cheerleader.

The only article I could find in which Cohodes’ name was retained was a 2009 Deep Capture post in which Byrne praised Cohodes while attacking his former partner David Rocker. But if Byrne was taking a shine to Cohodes as far back as 2009, or at least trying to drive a wedge between him and Rocker, why did he wait eight years before cutting his name out of Deep Capture?

What happened to cause this sudden removal of his name—as if we didn’t know?

Cohodes likes to make a big show of giving to journalism nonprofits, and he praises journalists he claims to admire. He sometimes beats his chest and “defends” reporters who have been intimidated by CEOs. But he does so in self-serving fashion on Twitter in conjunction with his attacks on short targets, whose CEOs he scorns even though most are not nearly as bad as Byrne.

He only seems to care about journalists, it seems, if they are not writing negatively about his favorite stock. If they do, they are “haters” and “bleacher bums.”

Ironically, Byrne did much the same thing over the years, praising some journalists while attacking others.

Deep Capture and Byrne’s obsession with critics

Even before Deep Capture was created in 2007, Byrne was obsessed with criticism of the company and, directly and through surrogates, viciously attacked critics and tried to co-opt them. He has never repudiated his tactics and continues to employ them to this day.

In a Fortune article, McLean revealed that Byrne taunted her in misogynistic fashion while she was researching the story, saying in an email “why exactly did you become a reporter? Giving Goldman traders blowjobs didn't work out?"

His vicious personal attacks on McLean continued when he established his Deep Capture fake news website in 2007, and they forced her to stop covering the company, as she recently told Columbia Journalism Review.

Byrne was believed to have advance knowledge of a 2006 SEC subpoena of journalists who wrote negative articles about the company. After an uproar, the subpoenas were later withdrawn.

When Bloomberg columnist Susan Antilla wrote a column on his smear campaign in early 2007, Byrne’s operative Judd Bagley attacked her viciously on a stock message board. Deep Capture was established later that year. Byrne has denied that it is run by Overstock, but he conceded that he is Deep Capture’s publisher and “ultimately controls what is published on the website” in sworn deposition testimony.

I have written frequently about Byrne and Deep Capture, as have many others. One of the most notorious episodes took place in 2009, when Byrne used Judd Bagley to pretext journalists and critics (including me) to gather information about their family members (including minor children) and friends by setting up a phony profile on Facebook under the name Larry Bergman. That got Bagley kicked off Facebook. Barry Ritholtz wrote about it at the time, as did others. Even though it was a public relations disaster that would shame most CEOs, Byrne expressed no regret.

In February 2009, I exposed violations of accounting rules by that allowed it to fabricate a Q4 2008 profit rather than properly report a loss in that quarter and overstate its reported income in later quarters. Byrne retaliated by personally attacking me on a stock market chat board, during various earnings calls, and in the press, in an effort to discredit me. During that time, Judd Bagley injected himself into my divorce proceedings by contacting my former spouse, who ignored him.

Bagley’s illegal actions were a clear retaliation for my pointing out the company's accounting violations. My work was vindicated when, at my request, the Securities and Exchange Commission investigated and forced it to restate its financial reports to correct its illegal accounting practices.

Again, Byrne has stood by everything I’ve just described.

Cohodes dissembles to protect Patrick Byrne

Cohodes has said that he “bets the jockey, not the horse.” Until recently he viewed Byrne as a crazy fool. During deposition testimony in a lawsuit between Overstock and Goldman Sachs, Cohodes described Byrne as a nut who was not fit to run a public company (click on image below to enlarge).

Cohodes now says he has changed his mind. He has not explained, either publicly or privately, what facts support his view that Byrne is not crazy, never has been crazy, and is and was fit to run a public company. That’s because there aren’t any.

Byrne has not changed one bit. Even his widely debunked naked short selling conspiracy theory has been cited by Byrne in explaining his widely ballyhooed effort to replace Wall Street’s clearing mechanisms with blockchain technology.

Cohodes has claimed on Twitter—without disclosing his Deep Capture vanishing act—that concerns about Byrne’s character and his attacks on the media are all “legacy bullshit” dating back “thirteen years”.

Here is a typical recent Cohodes tweet pumping Overstock, slobbering over Byrne, disparaging his victims as “haters,” and hyping a new Overstock that suddenly materialized after he took a position in the stock.

This kind of cynical behavior is amoral and insulting to Byrne’s numerous targets, including myself, his ex-partner David Rocker, other short-sellers, bloggers, analysts, and journalists like Carol Remond, Joe Nocera, Herb Greenberg, Gary Weiss, Roddy Boyd and Bethany McLean, all of whom are currently under attack on Deep Capture.

By whitewashing the past, dissembling about the present, and mocking Byrne’s victims, Cohodes has misled investors about a risk factor that is unique to Overstock: its CEO, whose behavior has damaged Overstock’s reputation.

Cohodes has every right to have his own opinion about Byrne. But as Daniel Patrick Moynihan once put it, “everyone is entitled to his own opinion, but not his own facts.”

Byrne’s smear site is alive and well. Not a word on Deep Capture—or any of the other venues Byrne and his surrogates have used to spread their lies—has ever been repudiated by Byrne. He has not recently created fresh posts smearing journalists and critics for the simple reason that his tactics work.

There hasn’t been any negative media coverage of Byrne since November 2015, when M.L. Nestel wrote an article on Byrne and chairman Jonathan Johnson for the Daily Beast. As he prepared that article, he sent over to Overstock some questions that Byrne did not like. As a “shot across the bow,” Byrne’s aide Mark Mitchell attacked Nestel on Deep Capture, saying he had gone over to the “dark side.”

Byrne renewed his attacks on the media in an interview with Jesse Ventura on the Kremlin’s RT network on November 3, just three weeks ago. Byrne surrogate Evren Karpak, a Byrne hireling since 2007 and now a Deep Capture “partner,” unleashed a vicious personal attack on investigative journalist Gary Weiss and myself on a stock message board on November 23, just four days ago.

Byrne is also vigorously fighting the libel suit that I mentioned earlier, which resulted in a lengthy judgment so scathing that even the Utah newspapers reported it. The judge dissected in detail Byrne’s deployment of lies to attack his victims. An appellate court hearing is scheduled for January 2018.

Byrne has never withdrawn his vicious lies concerning the plaintiff in that libel suit, Altaf Nazerali, never apologized, never retracted the blog posts that smeared him. Instead he is fighting that suit tooth and nail, even though his case was so thin that he didn’t produce a single witness in his behalf.

Clearly an active corporate attack site, with a staff ready to spring into action at a moment’s notice, a Byrne surrogate smearing a journalist just four days ago, and a team of lawyers fighting a libel suit at a hearing scheduled for January 2018—none of this is either “legacy” nor “bullshit,” and is happening now, not “thirteen years ago.” Opposing such a CEO does not make one a “hater.” The correct word is “rational."

Cohodes likes to brag about how he has “skin in the game” while Byrne’s critics are “in the bleachers” and are “bums.” That of course turns ethical behavior on its head, by saying that only people who have a conflict of interest have a right to speak out about corporations and CEOs. People with no conflict of interest, in Cohodes’ view, occupy “cheap seats.” (That would include, as I noted earlier, all of the journalists Cohodes seeks to cultivate.)

But when it comes to Byrne’s smear campaign, the Overstock CEO saw to it that Cohodes no longer has skin in that game.

Deep Capture has been used for blackmail

The libel suit I referred to above, brought by Canadian businessman Altaf Nazerali, revealed in detail how Byrne and his surrogates systematically published fabrications on his Deep Capture site. It also exposed how Byrne sought to use the site for blackmail.

According to pretrial deposition testimony cited in the court judgment:

After his telephone conversation with the plaintiff, [Byrne surrogate Mark] Mitchell emailed Mr. Byrne “this is going to be fun” and “I am going to talk to him on Friday and see if I can meet him in person”, and also “unless you [Byrne] have objections I am also going to suggest to him (I can do this in a roundabout way) that while I consider the facts to be correct, I am open to changing the story if he can provide other verifiable information that would be valuable”, and “I might even suggest that I will be willing to remove his name from the story altogether if he were to provide me with, say, trading records of global terrorist Yasin al- Qadi”, and lastly “if Nazerali agrees, nothing lost, after he gives me the information I will just put him back in the story. Sleazy, but, well it is what it is”; (Emphasis added)

The libel suit judgment also cites a recorded phone conversation in which Nazerali told Mitchell about errors in the Deep Capture post. After Nazerali enumerated the errors, Mitchell said “the arrangement that I usually have with sources is that if they’re helping with a story, I leave them out.”

In addition to using Deep Capture for blackmail, his surrogate Bagley attempted to blackmail an anonymous blogger who wrote several posts exposing Bagley’s cyber-stalking and smear campaign.

In the email below, Bagley threatened to “dox” the blogger if he did not desist (click on image to enlarge).

This attempt to blackmail the blogger, which received attention at the time in Dealbreaker, did not succeed because the blogger would not be scared off. Bagley made good on his threat two days after his extortion attempt was exposed. The blogger didn’t care. He kept up his good work for months afterwards.

I believe that this is important context in evaluating the removal of Cohodes’ name from Deep Capture. I don’t believe that Cohodes was blackmailed, but the foregoing shows that Byrne will go to any lengths to remove unflattering content from the Internet.


It is possible that Byrne removed Cohodes’ name from Deep Capture out of the goodness of his heart, without even thinking about how Cohodes was showering him with praise, and was driving up the price of a stock in which Byrne is the largest shareholder.

It is possible that Byrne was not aware that Cohodes was now a shareholder, was not aware of the Grant’s conference and Cohodes’ statement that the shares are “going way the fuck up.”

It is possible that Byrne did not know the share price climbed as much as 8.7% the day Cohodes pumped it at Grant’s.

It is possible that Byrne did not read the Bloomberg and Barron’s articles, and thus could not possibly have had any intent to compensate Cohodes for any of the foregoing.

It is possible that Cohodes had no idea his name was being cut out of the Deep Capture articles where he was under attack.

All this is possible, but not very probable.

Everyone who knows Cohodes can attest to his vanity and his sensitivity to criticism. Even his Twitter profile makes that clear, saying that “the best motivator is disrespect,” which suggests that the converse is true, that he craves stroking. Therefore I do not believe that his name was expunged from Deep Capture without Cohodes knowing about it.

If that indeed is his alibi, one has to wonder whether the rest of his due diligence on companies he analyses is equally incomplete and sloppy. I no longer have much respect for Cohodes’ judgment and character, but I find it hard to believe that he is that inept.

Written by,

Sam Antar

Recommended Reading:

Recommended Reading:

5,000 Reasons Why the Saga is Crazier Than Ever, by Gary Weiss Blog, January 30, 2018

Stock Promoter Marc Cohodes Issues a Death Threat, by Sam Antar, YouTube, November 18, 2018

How to NOT Do Investigative Journalism, by Tracy Coenen, The Fraud Files Blog, November 13, 2019

Why Roddy Boyd’s Ethics Failure Matters, Tracy Coenen, The Fraud Files Blog, November 14, 2019


I am a convicted felon and a former CPA. As the CFO of Crazy Eddie, I helped mastermind one of the largest securities frauds uncovered during the 1980's. Today, I advise law enforcement agencies and professionals about white-collar crime and train them to catch the crooks. I perform forensic accounting services for law firms and other clients.

I have no investment position in shares, long or short.

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