Seeing A Bigger Picture, What you have been deconstructing at Wikipedia Review... Options

[Patrick Byrne]

Congratulations on the great progress you have made defrocking some high clergy of Wikipedia since I last visited.

Full disclosure: My name is Patrick Byrne. I work at Overstock.com, which for about one year has employed a former journalist named Judd Bagley to oversee the creation of our car tab and a Wiki called "Omuse," handle relations with the press, and design a new tab (in the works). Long before Judd joined our company, and as a hobby since, he was analyzing techniques employed by a small group of people to hijack social media. Using the handle "Wordbomb" he posted the results of his analysis on this site and on a site he created called "antisocialmedia.net" (for the record, he did not tell me about antisocialmedia.net before he did it, nor for some time after its creation would he confirm that it was he who was behind it). In your admirable endeavors to unscramble what is going on behind the scenes at Wikipedia, Judd/Wordbomb has done his share of work. By a strange coincidence (?), one of the people whose pefidy this community has uncloaked, Slim Virgin, turned out to be a woman from my own past, and I posted elsewhere on this site such information as I thought might be helpful to you (which Mr. Brandt seemed to appreciate). I say this all in full disclosure because the financial press labors to find any incompleteness in my posts on the Internet, apparently finding something unholy in my exercise of first amendment rights without availing myself of (or recognizing the need for) their services.

Now to my point: Nothing is more irritating, I know, than to have someone suggest to you that your own cause is really part of a bigger struggle. One always suspects an attempt to divert one's energies into whichever other cause that speaker favors. So I insist that I seek no diversion from your own current, noble, efforts, when I suggest to you that the threads you are pulling here lead deeply into the heart of a financial scandal that has been percolating into the headlines for six months, and may swamp any financial scandal of our lifetime.

On another message board within Overstock.com I have begun synthesizing information about that scandal, starting by creating one concise, cohesive overview post. Rather than gum up this board with information about that other financial scandal, I will give a link to that overview post: HOW THE SYSTEM REALLY WORKS: INTRO

After you have read that you will wonder if there is independent confirmation of what I wrote there. There is a great deal, and organizing it will be the subject of my subsequent posts. In the meantime, however, consider taking 25 minutes to watch a Bloomberg Special Report, "Phantom Shares". Bloomberg has the most "elite" viewership of any news organization in the world (which may count against it in the eyes of some radicals, I know). Consider what it means when a news service at the pinnacle of the Establishment reports that our capitalist model is powered by a reactor that almost no one has heard of, and that this reactor that has a crack in it (and why it is that only such an elite news service could run that story).

Given my earlier involvement on the Slim Virgin issue, I hope that Daniel Brandt and you will forgive what may seem like a commercial interruption. I simply wish you to understand how what your are confronting here really is part of a larger puzzle, so that you may know the stakes riding on your efforts.

Warm regards,
Patrick M. Byrne
CEO, Overstock.com

[Unrepentant Vandal]

I just don't know how to respond here.

On the one hand, I've performed naked short selling myself, although never with Overstock, or in fact anything listed on a US exchange of any kind. I cannot see some markets functioning with sufficent liquidity without it.

But on the other, I think that the campaign against you by Gary Weiss et al seems to be irrationally vindictive. I'm at a loss to explain their obsession.

[Patrick Byrne]

"But on the other, I think that the campaign against you by Gary Weiss et al seems to be irrationally vindictive. I'm at a loss to explain their obsession."

Vandal,

I can explain it. They are part of a cover-up. The people behind it control the narrative in the mainstream financial press, but lacking that overt power within social media, they employ such figures as to hijack the discourse, as has been brilliantly deconstructed here and on antisocialmedia.net.

Patrick

[Pwok]

Sorry, CEO Byrne, but when I clicked on the Bloomberg link all I got was a screenful of symbols.

As for the other issue you raise, I'm not sure what it is. The post you link to doesn't say what it is. Why be so coy? A post earlier in this thread seems to suggest that you're railing against short-sellers. Please don't tell me that this is your beef. I know my way around the track, and if that's your beef then you're just another corporate dweeb who thinks his stock should be higher than it is.

This post has been edited by Pwok:

[Unrepentant Vandal]

Sorry, CEO Byrne, but when I clicked on the Bloomberg link all I got was a screenful of symbols.

Try right-click + save target as / download link / save link as, or similar. Basically the server isn't getting the MIME type right.

Or open that URL with Windows Media Player.

They are part of a cover-up. The people behind it control the narrative in the mainstream financial press, but lacking that overt power within social media, they employ such figures as to hijack the discourse, as has been brilliantly deconstructed here and on antisocialmedia.net.

I'd be the first person to admit that there's a lot of, er, sharp business practice in the city... but the size that such a cover up would have to be strikes me as a bit implausible.

But there does have to be some sort of explanation for their behaviour. Perhaps they just don't like being challenged?

[Pwok]

Let me add: I don't trade in the market. When I was involved in the market, I wasn't a short-seller. But I did respect them, because they were often the only people who'd tell me the truth about anything. I had a ringside seat at the dot.com frauds. My humble opinion is that CEOs and CFOs who simply made up their numbers to drive stocks higher were (and still are) a hell of a lot more of a menace to the economic system than all the short-sellers combined.

[Patrick Byrne]

Pwok,

Funny, the Bloomberg link works for me. Here it is in clear text.

http://cdn.overstock.com/07-0313Bloom_PhantomShares_NSS.wmv

As far as my post goes (http://forums.auctions.overstock.com/viewtopic.php?t=17929&sid=d02598415d8d5a6eb019dd77f21674dc ) it doesn't mention "Overstock" so perhaps you should not just jump to conclusions so blindly. Watch the Bloomberg piece: it should clear up for you why I (or anyone) would find this a troubling issue.

Patrick

[Unrepentant Vandal]

Let me add: I don't trade in the market. When I was involved in the market, I wasn't a short-seller. But I did respect them, because they were often the only people who'd tell me the truth about anything. I had a ringside seat at the dot.com frauds. My humble opinion is that CEOs and CFOs who simply made up their numbers to drive stocks higher were (and still are) a hell of a lot more of a menace to the economic system than all the short-sellers combined.

I'm on something of a sabbatical at the moment, but when I am trading I will easily go short or long on a hundreds lots to gain one tick, and repeat this up to a hundred times* a day. I don't trade stocks, but most players on derivative exchanges are not hedging: they're acting for themselves, for a trading house, or for an ibank. There isn't the time for a grand conspiracy, and it wouldn't really make sense for there to be one. It wouldn't serve any purpose!

[footnote]*Ok, that's fairly atypical![/footnote]

[Nathan]

A warm (re)welcome to Wikipedia Review.

[dtobias]

Pwok,

Funny, the Bloomberg link works for me. Here it is in clear text.

http://cdn.overstock.com/07-0313Bloom_PhantomShares_NSS.wmv

Your server is sending that document with the MIME type "text/plain", instead of the appropriate type for WMV content. This causes standards-compliant browsers (e.g., Firefox) to attempt to display the document as a text file, which is what the HTTP standards say they must do. I'd think that somebody in charge of a tech company would be familiar with this sort of thing.

[Unrepentant Vandal]

Pwok,

Funny, the Bloomberg link works for me. Here it is in clear text.

http://cdn.overstock.com/07-0313Bloom_PhantomShares_NSS.wmv

Your server is sending that document with the MIME type "text/plain", instead of the appropriate type for WMV content. This causes standards-compliant browsers (e.g., Firefox) to attempt to display the document as a text file, which is what the HTTP standards say they must do. I'd think that somebody in charge of a tech company would be familiar with this sort of thing.

Oi, I said that first!

You mensa members are so slow (IMG:smilys0b23ax56/default/tongue.gif)

[Pwok]

Here's a snippet of what I get when I click the link:

0&²uŽfϦÙ

I've been doing a little research on Overstock.com and your activities, Mr. Byrne. Before I say more, I want to write that prior to 15 minutes ago, all I've known about Overstock.com is that they run ads on TV. That's it, period. Seems like some sort of on-line merchant of closeout stuff. What I've learned in 15 minutes is that your company's results stink, that you're mad at the short-sellers, and that the SEC is taking a look at your accounting.

Look, your company had $93 million in cash as of the end of June. Of course, that's $30 million less than it had at the end of last year, so if I were in your shoes I'd be a little nervous. More than a little nervous, actually. But you and I both know that the way to squeeze the shorts, as they say on the Street, is to prove 'em wrong by putting up good numbers.

When I was close to the markets, a triple red flag was always a CEO who ranted and raved about short sellers. You see, when I ran money we were entirely long stocks. When I encountered a CEO ranting in public about the shorts, the first thing I'd do is sell the stock (carefully, because we ran a lot of dough and had big positions). I suggest that you tend to your business and let the stock market take care of itself. This isn't to say that I disagree about rampant corruption in the financial markets, but I'm not going to be rushing to the barricades on behalf of the CEO of a Salt Lake City-based merchant that is bleeding cash like a stuck pig.

As far as I'm concerned, the entire state of Utah ranks #50 in business ethics. I've never met such a concentration of smarmy, oily liars anywhere on earth than in your state. After having been screwed three or four times by Utah companies, I imposed an across-the-board ban on owning securities issued by Utah-based companies. Colorado, Arizona, Florida, and Northern California were bad enough, but Utah was the absolute belly of the beast. It was just remarkable. I still remember the time a business friend told me they acquired a subsidiary in Salt Lake. I said, "Whoa! Watch your wallets, guys!" Six months later he calls me and thanks me for the advice; he'd watched carefully, caught 'em stealing, and shut it down.

Funny thing about cash flow statements is that those are a whole lot harder to fake than everything else. There are all kinds of things companies can do to their income statements and balance sheets to hide the bad news. Cash flows are hard to screw around with, and cash on hand is just about impossible to phony up. "Follow the dead presidents," we'd say.

p.s.: In my experience, the shit's really got to be flying for the SEC to get involved in a company's accounting. I never once during my involvement in the markets saw a situation like that end in anything other than a loud sound and a smear on the highway where the company used to be. I even played a key role in sending a CEO and his management team to prison when they falsified the numbers. I was the guy who made the quiet, anonymous call to the SEC's Enforcement Divison and suggested that they might want to have a look at Mr. X, Mr. Y, and Mr. Z. But who knows, maybe Overstock.com will break the mold. Good luck.

This post has been edited by Pwok:

[Patrick Byrne]

Sorry, CEO Byrne, but when I clicked on the Bloomberg link all I got was a screenful of symbols.

I'd be the first person to admit that there's a lot of, er, sharp business practice in the city... but the size that such a cover up would have to be strikes me as a bit implausible.

But there does have to be some sort of explanation for their behaviour. Perhaps they just don't like being challenged?

Vandal,

I thoroughly agree it is wildly implausible upon first encounter. All I can do is draw the dots, then leave it to the general reader to decide what picture they form.

As for the financial media at large: yes, no doubt psychological facts have some bearing on the question. However, there is a small group the homogeneity of whose work strays far beyond the limits of coincidence: their stories are marketing literature for the points of view of a tiny coterie of hedge funds, over and over with great regularity and, in some cases, without a single exception. In the case of Gary it goes far beyond that: at the center of the scandal (as the Bloomberg show reports) there is a huge but essentially unknown corporation called the "DTCC," a black box sitting at the heart of our entire capital market. Publicly Gary spews uncontrollably at any effort to direct attention to this corporation, and in addition, Gary has been exposed posting on Wikipedia from within that corporation's computer system. Given that it is about as heavily guarded as Fort Knox, that is no small feat nor idle fact. When confronted, the DTCC went into cover-up mode.

One can dismiss behavior with psychological descriptions for only so long. After you read what I lay out, I wonder if you will continue to do so.

Respect,

Patrick

[Unrepentant Vandal]

Sorry, CEO Byrne, but when I clicked on the Bloomberg link all I got was a screenful of symbols.

I'd be the first person to admit that there's a lot of, er, sharp business practice in the city... but the size that such a cover up would have to be strikes me as a bit implausible.

But there does have to be some sort of explanation for their behaviour. Perhaps they just don't like being challenged?

Vandal,

I thoroughly agree it is wildly implausible upon first encounter. All I can do is draw the dots, then leave it to the general reader to decide what picture they form.

As for the financial media at large: yes, no doubt psychological facts have some bearing on the question. However, there is a small group the homogeneity of whose work strays far beyond the limits of coincidence: their stories are marketing literature for the points of view of a tiny coterie of hedge funds, over and over with great regularity and, in some cases, without a single exception. In the case of Gary it goes far beyond that: at the center of the scandal (as the Bloomberg show reports) there is a huge but essentially unknown corporation called the "DTCC," a black box sitting at the heart of our entire capital market. Publicly Gary spews uncontrollably at any effort to direct attention to this corporation, and in addition, Gary has been exposed posting on Wikipedia from within that corporation's computer system. Given that it is about as heavily guarded as Fort Knox, that is no small feat nor idle fact. When confronted, the DTCC went into cover-up mode.

One can dismiss behavior with psychological descriptions for only so long. After you read what I lay out, I wonder if you will continue to do so.

Respect,

Patrick

I don't have the time to look into what you report now, but I shall do so before I contribute further to this thread. But I must correct the idea that the DTCC is unknown - even I've got at least a fairly good idea of what it does, and as I assume you've met many traders on your campaign, you'll know that most of us are (if we're honest) astonishingly clueless outside of our areas of expertise.

This post has been edited by Unrepentant Vandal:

[Patrick Byrne]

Here's a snippet of what I get when I click the link:

0&²uŽfϦÙ

I've been doing a little research on Overstock.com and your activities, Mr. Byrne. Before I say more, I want to write that prior to 15 minutes ago, all I've known about Overstock.com is that they run ads on TV. That's it, period. Seems like some sort of on-line merchant of closeout stuff. What I've learned in 15 minutes is that your company's results stink, that you're mad at the short-sellers, and that the SEC is taking a look at your accounting.

You know, most of learn by age 15 that arguments of the form "Oh you're just saying this because you feel such-and-such" are to be avoided. I would certainly expect more critical thought from a denizen of this board, the purpose of which is to unmask the ways in which socially constructed reality is being systematically distorted. To take one simple claim as an example:

"What I've learned in 15 minutes is that ...you're mad at the short-sellers."

Please produce some evidence for this claim. Not evidence of the form, "Here is an article where they say Patrick Byrne is made at the short sellers." But an article or quote where I actually say something to that effect. If you cannot, I would respectfully suggest you consider the possibility that you are laboring under one of those "well everyone knows this-or-that" mindsets that should be checked at the door. Especially at this site. If you want to exercise such a mindset, there is a place for it called, "Wikipedia.com".



Patrick

A warm welcome to Wikipedia Review.

Thank you Nathan.

It has been a year or so, but I did visit here in the past to post what I knew about Slim Virgin.

http://wikipediareview.com/index.php?act=S...opics&highlite=

It is nice to be back.

Patrick

[Pwok]

Oh, please, Mr. Byrne!

You don't know me and you're not going to meet me, so you can believe this or not: You just happened to have run into someone who is completely disinterested in your company or your stock, but who has been around the block 10 or 20 thousand times. (IMG:smilys0b23ax56/default/cool.gif) And from what I've been gleaning in my limited research in what's now about a half-hour, Overstock has been playing all kinds of games with its books. It stands out like the sound of a senator's wingtips tapping on the floor in the bathroom stall next to me in the airport. (IMG:smilys0b23ax56/default/cool.gif)

What's this "pro-forma EDITDA" crapola I read about in your Q2 conference call? Do you actually think that you can get away with that sort of thing these days? That people will believe it? Hubris knows no bounds, does it? What, and you're claiming an improvement of gross margin without disclosing how much of it came from sales of stuff that you'd written down in prior quarters? What a bunch of smarmy, sleazy crap. I just hated it when managements would pull that kind of shit on me. It wasn't just dishonest, it was insulting. They actually thought we wouldn't see it.

Oh, and don't tell me about GAAP. I know all about GAAP. I still tell people about an accounting class I took in business school. So, we walk in on the first day and the professor hands us a sheet of paper with a bunch of facts printed on it. He tells us that the heat's on, and that our personal options might be riding on the quarterly numbers. He says he wants two numbers: What the company made, and what we'd report. The class average was that the company made 48 cents, and that we'd report 52 cents. "This class is all about where to find that 4 cents," the professor said.

And believe me, Mr. Byrne, I've found a lot more than 4 cents in my time. Christ, I scoped out the (first) AOL accounting fraud three years before the SEC busted them for it. If I were emporer, the AOL people and their auditors would be in jail, and guys like you would be looking over their shoulders very nervously when contemplating any sort of snake dance with their numbers. If there's one thing that white collar people fear, it's jail. Money can always be replaced, but you can't replace what you lose when you go to prison.

In the classroom example, both numbers were GAAP. You can drive a semitruck through GAAP, but apparently that's not even enough for you now. Mr. Byrne, when I look in the mirror every morning the face I see staring back at me is not that of someone who's mother raised a fool. Sheesh, how stupid do you think I am? Your game is sooooooooooo Utah. What are you thinking now, that the best defense is a good offense? Look, I don't trust Wikipedia farther than I can throw it, but my beef with them is completely unrelated to your crusade, that's for sure. You know who I really feel for? The sucker of a fund manager who bought a big slug of your stock and has to sit there at 2 in the morning and worry about it.

This post has been edited by Pwok:

[Nathan]

A warm welcome to Wikipedia Review.

Thank you Nathan.

It has been a year or so, but I did visit here in the past to post what I knew about Slim Virgin.

http://wikipediareview.com/index.php?act=S...opics&highlite=

It is nice to be back.

Patrick

Yup, I remember, so I'll edit my post to read "re-welcome" :-)

[LamontStormstar]

Mr Byrne, now you have an odd site. It at first looks like ebay but I can find no "about us" page and on your Wikipedia article it basically says you get your own inventory and sell it trying for low and that's that, making you like one of many discount online shopping sites, although the others are usually specialized. Then on closer digging into your site I find you have auctions with unique people selling. So people can sign up and sell and then they're competing with the main bulk of items of what you're selling and it's possible that there may be a price war and someone on the auction side may win and your site becomes more of an auction site as if the auction side can't keep up then the auctions will be basically hardly any items like it is now, just like on most online auction sites other than ebay.

Your site also has in no way tried to fix ebay's feedback system from what I've seen and I know a lot of ways on how to fix that.

As for naked short-selling, Wikipedia has the most poorly written article on with combining unclarity with generally promoting naked short selling as much as it can. The rest of the internet appears to be against it. It's also takes a lot of reading to understand how exactly it can happen, generally this long thing http://cmkxdiamond.proboards66.com/index.c...92996593&page=2 So, Unrepentent Vandal, I'm not sure how you yourself could be naked short selling. Maybe you meant regular short selling? It appears more like if I bought a bunch of shares of stock using sharebuilder.com and sharebuilder.com just claimed I have the stock and didn't buy any for me then unless the company tanks, sharebuilder.com loses money. Unrepentent Vandal, did you sell someone fake stock or just regular short sell?

Back to Mr. Byrne, now I read that your company has been naked short sold for a very long time, like someone is trying to kill it. But based on the excessive length it looks like someone tried to kill it early by naked short selling, but they failed, and then the fake shares never dematerialized.

Gary Weiss supposedly is against bad stock practices and should know better, but he take the naive idea that naked short selling is good because it can get rid of scam companies instead of causing more problems than it selfs, but then you and WordBomb say he is on a campaign against your company. So who tried to take out Overstock and why and who is still trying to take them out?

This post has been edited by LamontStormstar:

[Patrick Byrne]

Oh, please, Mr. Byrne!

You don't know me and you're not going to meet me, so you can believe this or not: You just happened to have run into someone who is completely disinterested in your company or your stock, but who has been around the block 10 or 20 thousand times. (IMG:smilys0b23ax56/default/cool.gif) And from what I've been gleaning in my limited research in what's now about a half-hour, Overstock has been playing all kinds of games with its books. It stands out like the sound of a senator's wingtips tapping on the floor in the bathroom stall next to me in the airport. (IMG:smilys0b23ax56/default/cool.gif)

What's this "pro-forma EDITDA" crapola I read about in your Q2 conference call?

Pwok,

I suggest we return to the real world for a moment, and then we can revisit your fantasy world, where you have nimbly illustrated precisely the point I am trying to make to all readers.

The Bloomberg Special Report to which I linked (and which works, incidentally, in the Firefox browsers here), describes a grave crime affecting tens of millions of people in our country. The cover-up works like this. If any member of the public at large tries to discuss this crime, the Party Line response is "He must just be a shareholder who is mad that his stock went down." If a CEO tries to discuss it then it is, "He is just a CEO who is mad that his stock went down" (incidentally, our stock is up nearly 40% this year, but this does not make me right about the enormity of this financial crime against America any more than when it went down it made me wrong). These responses are given reflexively, automatically, and without hesitation; they are spewed on message boards at great length; and within Wikipedia.org are maintained as the great prophylactic against reason and evidence debate, no matter what economic data emerges.

Again, returning to the real world, I am the one who pushes GAAP as the standard and denounce all appeals to "pro forma" (Latin for, "as if") accounting, and have repeatedly made clear my aversion to "pro forma" approaches to financial statements . In addition, though essentially every analyst wants to discuss things within an EBITDA paradigm, I have repeatedly discussed my aversion to "EBITDA" instead of GAAP, saying that there are at most two conditions when EBITDA is meaningful (when cash is tight, and when large infrastructure has been completed whose depreciation will exceed ongoing capital improvements). Ourselves, we are happy to live and die by GAAP. It is simply an aspect of the Chewbacca Defense that is part of the cover-up to lie about what I say in this regrd, over and over, in the hopes that no one checks the actual record.

Now here is the transcript of the call to which you refer.

Dr. Patrick Byrne - Overstock.com, Inc. - Chairman, CEO
...Okay, slide 19. EBITDA. Now I'm going to preempt the knuckleheads who go out there and find quotes from the -- oh, Byrne has said in the past he doesn't like EBITDA. Well, yes, I have said that over and over. I have also said there's only two times EBITDA matters. And it is -- one is one when cash is real tight, which -- we were low on cash, but we have come back very nicely. And that doesn't seem to be an issue. The other it is if a company is in the odd position of having made massive capital investments that it is now seeing the depreciation expenses run through its income statement, and it doesn't have to replace that capital equipment, then EBITDA is actually an interesting thing to know.

I'd call that a stand-up explanation. Anything in it that supports the accusations you have blindly parroted?

The next piece may get a bit technical for the non-financial reader, so I broke it out:

Well, that second point really does define us. We are -- have I think about $40 million of noncash -- or $38 million of noncash a year. $35 million or so is depreciation. And so far this year we have spent, I think, about $2 million on CapEx. I bet we get through the whole year with less than $5 million. And that seems normal for now. For the foreseeable future we way overbuilt our infrastructure, so throwing back in that depreciation seems pretty good. As you can see the line -- we used to be EBITDA positive in the fourth quarter. And our goal was basically to make enough back in the fourth quarter to basically breakeven for the first three quarters in the preceding years. Everything came off the rails two years ago. We have recovered, and we are actually back EBITDA positive in the third quarter. And I don't think we have done that-" (interruption, Jason corrected me on something, I fumble to find my place) "...But anyway now that is all EBITDA excluding these restructuring costs, which is the shaded area on the screen. Like Jason just said, that shaded area is -- that should be collapsing to a line against starting this quarter.
Jason, comments on this?

Jason Lindsey - Overstock.com, Inc. - President, COO
I think it is great. I think it is nice to be generating again, I guess excluding restructuring, to be generating cash again. A big improvement."

Next comes the piece on "pro forma." An analyst I do not know came on the phone and used the term:

Quint Slattery - - Analyst
A quick question. In terms of topline growth when should we see a resumption of year-over-year topline growth? And also, when do you guys expect to be earnings positive on an EPS basis?

Dr. Patrick Byrne - Overstock.com, Inc. - Chairman, CEO
On a GAAP basis?

Quint Slattery - - Analyst
No, on a pro forma basis.

Dr. Patrick Byrne - Overstock.com, Inc. - Chairman, CEO
Well, I will take the first question, and I will said this quarter. I think that you will see topline showing year-over-year growth this quarter. Jason, why don't you take the -- on a pro forma basis, I think we can show profit now. But, Jason, what do you want to say about that?

Jason Lindsey - Overstock.com, Inc. - President, COO
We have stayed out the giving guidance realm. We have tried to tell you what we know about our business and facts, pro and con, and let you make up your own mind. If you believe in EBITDA is profitable, and you believe that the restructuring charges really are one time, or they're not recurring, and that is your definition of pro forma, then we were $2 million profitable this quarter.

Dr. Patrick Byrne - Overstock.com, Inc. - Chairman, CEO
But you're talking GAAP.

Jason Lindsey - Overstock.com, Inc. - President, COO
If you're talking GAAP, then again I don't want to tell you my opinion. I will tell you all the facts that I know of and you make your own opinion.

Dr. Patrick Byrne - Overstock.com, Inc. - Chairman, CEO
So sorry. That was a typically oracular answer from Jason. Anyway, we will -- anything else you want to ask, sir?

Quint Slattery - - Analyst
No, that's all. Thank you.

So in the real world, someone came on the phone and asked a question using the term "pro forma," and we tried to gracefully, if perplexedly, never having used the term ourselves except by way of derision (my "on a pro forma basis, I think we can show profit now" was a moment of sarcasm conveyed by the recording even better than the transcript).

Of course, the bleating continues in a predictable fashion: Sam Antar, a convicted felon who ratted out his family members to reduce his own sentence (no kidding, look it up) and who now takes his instructions from hedge funds, wrote at length pretending that I had been appealing to "pro forma" without mentioning that an analyst called in asking that question. Gary Weiss (whom Judd has unmasked so beautifully on antisocialmedia.net) chimed in quoting Sam. Now you are regurgitating it as though on command, all while professing to have no interest, etc. etc.

A few posts back you wrote something puerile: "Look, your company had $93 million in cash as of the end of June. Of course, that's $30 million less than it had at the end of last year... " - silly because retailers always end the year with their highest levels of cash (something happens every December, remember?). That is why real financial analysts look at trailing 12 months (over which, incidentally, we have had nicely positive cash flow). Given that you seem to understand how to read a financial statement, writing something so obviously silly led me to wonder if you were not just trying to pull the wool over the eyes of other readers. I fear your latest post, parroting as it does so faithfully the Party Line, does little to disabuse me of this sense.

By the way, for those who were not able to play that Bloomberg documentary, here is a lovely
article they published on the same subject: I predict that my interlocutor here will come back with whatever non sequitors he can muster to avoid discussing the issues raised in this article. Call me "Kreskin". But I have seen this movie before.

Sincerely,
Patrick

PS Before any reader gets sucked in by this guy, I strongly suggest reading Wordbomb's posts on http://antisocialmedia.net/?s=gary+weiss . This fellow uses precisely the same turns of phrase and lines of argument used by Gary and his cronies (e.g., Scipio) from on InvestorVillage. I have watched these guys for long enough to know that they were not going to let the unmasking of Slim Virgin go unanswered: they are going to try to infiltrate your site.

[gomi]

Welcome, Mr. Byrne -

I agree with you that "naked" short selling is a violation in the trust we place in the public equity markets, and I agree with you that Wikipedia has harbored at least a couple of people who have been astroturfing for the legitimacy of this illegtimate -- if not illegal -- practice. The more that can be done to expose them, the better.

That having been said, I beg to differ with your initial characterization, that what Wikipedia Review critiques (however effectively), is "part of a larger puzzle". My opinion is that it is the other way around -- the attacks on you and your company, the disinformation about naked shorting, and so on, are simply one symptom of the massive opportunity for fraud that is Wikipedia as we know it.

The scandalous biography of Mr. Brandt, for example, or that of Mr. Siegenthaler, were equally pernicious. And every day, people astroturf for Microsoft, numerous politicans and government bodies, and God knows what else.

For the record, I have both been an Overstock customer (satisfied) and also shorted its stock (to substantial profit). I do not harbor ill-will toward the company, but do believe that in general the equity markets -- including legitimate short-selling -- work well at valuing companies, though abuses such as naked shorting should be stopped. But however much you feel that what has happened to your company is the problem with Wikipedia, I assure you, the arena for potential damage is our entire society, not just Overstock.com.

In any case, welcome.

[Somey]

What a bunch of smarmy, sleazy crap. I just hated it when managements would pull that kind of shit on me. It wasn't just dishonest, it was insulting. They actually thought we wouldn't see it.

So what do you do exactly, Mr. Pwok? Are you a broker, pension-fund administrator, accountant, auditor, or what? I knew we had active stock traders and such on the board, but you seem to be considerably more advanced in the profession than the others, at least the ones I know of...

If I were emporer, the AOL people and their auditors would be in jail, and guys like you would be looking over their shoulders very nervously when contemplating any sort of snake dance with their numbers.

Could we put the AOL people in jail anyway?

Sheesh, how stupid do you think I am? Your game is sooooooooooo Utah. What are you thinking now, that the best defense is a good offense? Look, I don't trust Wikipedia farther than I can throw it, but my beef with them is completely unrelated to your crusade, that's for sure.

I wasn't aware that Utah had such a reputation... can you come up with any sources to back that up? Either way, you've got to calm down. Mr. Byrne here is an employer, and my assumption has always been that it's as an employer that he's on this "crusade" against naked short selling. Or are we saying that the jobs of hundreds of workers are of no consequence?

You know who I really feel for? The sucker of a fund manager who bought a big slug of your stock and has to sit there at 2 in the morning and worry about it.

There's medication for that now, you know!

[Patrick Byrne]

Somey,

Cool, man. What a welcome change it is to be on a site where the foolishness has not yet reached critical mass, and everyone can see the deal.

Patrick

[Patrick Byrne]

Welcome, Mr. Byrne -

I agree with you that "naked" short selling is a violation in the trust we place in the public equity markets, and I agree with you that Wikipedia has harbored at least a couple of people who have been astroturfing for the legitimacy of this illegtimate -- if not illegal -- practice. The more that can be done to expose them, the better.... That having been said, I beg to differ with your initial characterization, that what Wikipedia Review critiques (however effectively), is "part of a larger puzzle".... For the record, I have both been an Overstock customer (satisfied) and also shorted its stock (to substantial profit). I do not harbor ill-will toward the company, but do believe that in general the equity markets -- including legitimate short-selling -- work well at valuing companies, though abuses such as naked shorting should be stopped. But however much you feel that what has happened to your company is the problem with Wikipedia, I assure you, the arena for potential damage is our entire society, not just Overstock.com.

In any case, welcome.

Dear Gomi,
I thank you for your kind words and the thought that went into them. You make three three points that I will adress each in turn.

1) "The more that can be done to expose them, the better.... " OK, I'm cool with that.

2) "But however much you feel that what has happened to your company is the problem... I assure you, the arena for potential damage is our entire society, not just Overstock.com." Here, I respectfully suggest that some small degree, perhaps, you have accepted as true a claim whose only recommendation is that it has been parroted relentlessly by a compliant and obedient financial press. More than anyone, I get that this is not just about Overstock.com. I have said, over and over again. I think there is a crazy, deep, horrendous financial crime occuring against the American people, one that dwarfs any in living memory. The game is rigged so badly that our country may as well be riding down the highway with the foot-brake pushed. As I was quoted as saying in Fortune, "Somewhere in America there are grandmothers eating dogfood for dinner tonight so some assholes on Wall Street can drive Porches." The Overstock story is just a footnote to a financial crime of incalculable dimension. I get it. Part of their Chewbacca Defense cover-up is just to pretend that this is the Overstock CEO (me) talking about Overstock, when in reality it is just some guy (also me) trying to explain how America has been ripped off by Wall Street for tens of billions of dollars, if not more, while thousands of entrepreneurs have been destroyed.

3) Is the bigger issue the corruption of Wikipedia? You are quite possibly right here. Myself, I think the issues go hand in glove. I now think that there have been dynamics at work in our society for years, and as they migrated online it became possible to recognize, document and expose them. Yes, in the long run the corruption of our discourse may be the bigger issue, I grant you. But in that bout the corruption of Wikipedia may prove to have been just one round.

Respect,
Patrick

[Somey]

There's a deal?

I do try to keep an open mind, at least. Having said that, I have to agree with Gomi somewhat - for many of us, including myself, this whole thing is really about Martin Luther, not naked short selling. Nobody has really proven a distinct relationship between SlimVirgin and Gary Weiss, other than that Mantanmoreland/Weiss helped SV edit Nazi references into the Luther article. You wouldn't think that would be enough to lead her to defend him to such an extent, but I guess that's where you come in.

Either way, the naked shorting seems like just one aspect of the picture, not the Big Picture itself... (I'm not saying I can't be persuaded, though!)

And Pwok seemed like just a regular guy, until today, anyway. In fact, he's been practically exemplary.

And what's a guy going by the name "Unrepentant Vandal" doing in the stock-trading game? Somehow I just can't see a guy in an Armani suit sitting down and deliberately posting misinformation to WP, not to mention going on a blanking spree. The world just gets weirder by the minute.

Oh, and by all means, tell the Juddster that Pwok's IP has never changed, it's not a proxy, and it doesn't match any of the Weiss ranges or addresses we've encountered here. He may well have a special enmity for Utah-based CEO's, but Gary Weiss he's not!

[Kato]

As I was quoted as saying in Fortune, "Somewhere in America there are grandmothers eating dogfood for dinner tonight so some assholes on Wall Street can drive Porches."

Ah. Thomas Jefferson, 1789. Well remembered Patrick.

[tarantino]

Oh, and by all means, tell the Juddster that Pwok's IP has never changed, it's not a proxy, and it doesn't match any of the Weiss ranges or addresses we've encountered here. He may well have a special enmity for Utah-based CEO's, but Gary Weiss he's not!

Am I the only one who finds Somey's continued use of admin tools to post checkuser results on dissident voices disturbing?

[Somey]

Am I the only one who finds Somey's continued use of admin tools to post checkuser results on dissident voices disturbing?

I myself am disturbed by it, but which is the dissident voice?

Besides, I'm not trying to suggest who he is, only who he isn't. He could still be one of the 6 billion other people in the world, y'know!

[Pwok]

If someone is short-selling shares that haven't been borrowed, then I agree with CEO Byrne that there's a legitimate complaint. It's a fraud on the market, and like other frauds it ought to be pursued and the perpetrators punished. That said, I'm skeptical that this is a system-threatening problem. I think there are far more important problems out there than this one. And, once more, if Overstock wasn't doing so badly, attacks by short sellers wouldn't particularly matter.

As for your company's financial performance, it would take me quite a bit of time to analyze Overstock and its industry. That said, most of your positive OCF in Q2 came from increased current liabilities. In other words, you stretched out your payments. Oh, and you sold off a bunch of inventory without replacing it: probably the stuff you'd written down in previous quarters so you could make your gross margins look good in Q2. But your revenues were down significantly from the same period a year earlier; it would seem that customers aren't exactly flocking to Overstock.com, now are they?

I don't know what the difference is between the base business and your "fulfillment partner," and I'm not sure I want to because something tells me it's where a lot of sins are hiding. Please don't tell me that there's a red stripe painted in a common warehouse and that everything on one side of the line is theirs and everything on the other side is yours. The possibilities are endless. We'll let the SEC's folks handle that one. Should make for good reading.

So what do you do exactly, Mr. Pwok? Are you a broker, pension-fund administrator, accountant, auditor, or what? I knew we had active stock traders and such on the board, but you seem to be considerably more advanced in the profession than the others, at least the ones I know of...

I'm retired. I did a bunch of things. Enough to know that American business on parade would look like the cast of the movie Freaks. In my first financial position, on the first day, the first thing I heard from the most experienced people was: "Never believe corporate management. They always lie." I remember being taken aback by the cynicism. Five years later, I was singing the same tune. You could still make money on the stocks, as long as you didn't believe what you were told. I listened to conference calls for comic relief.

Could we put the AOL people in jail anyway?

Depends on what you mean by "we."

I wasn't aware that Utah had such a reputation... can you come up with any sources to back that up?

I'm not asking you to believe it. If you want to do business with Utah-based companies, be my guest. It'll be your funeral. Let's just hope the U.S. doesn't stick that Utah export to Massachusetts, Mitt Romney, in the White House. If you think Bush has been a disaster, by the time Romney and his cronies get through with us, there'll be nothing left.

Either way, you've got to calm down.

No, I don't.

Mr. Byrne here is an employer, and my assumption has always been that it's as an employer that he's on this "crusade" against naked short selling. Or are we saying that the jobs of hundreds of workers are of no consequence?

CEO Byrne is pissed about his stock and his stock options, and because he's pissed then by God it's the biggest issue in the whole world because he's a CEO and he says so. And he probably got leaned on by his board of directors, too. And if Overstock is like a lot of other companies, the stock getting clobbered probably screwed up his strategy of underpaying employees in cash and instead giving them shares. He might have been facing up against the issue of having to pay a living wage in dead presidents. O! The horror!

But not a single job at his company (except maybe his own) is at risk from naked short selling. Again, short selling has never been my game, but if I had a buck for every CEO who blames his failures on short sellers, I'd be even better off than I am now. Folks, it's the oldest excuse in the book. If other, more naive people on this board want to swallow that one, go right ahead, but I'm telling you that when I was in the finance game we laughed at CEOs when they went on a tear against the shorts. Study after study will tell you that the shorts usually get it right.

Seriously, I'm here to tell you it's a steamin' crock o'shit. CEO Bryne is painfully typical of the CEO breed: it's always, always, always someone else's fault. Always. Look, I know that it sounds like I've got an ax to grind against his company and/or the stock. I don't. I couldn't care less about either one. Never thought much about them before today, except to notice the hot women in the ads telling us that it's all about the "O." I've always wanted to say, "Sweetheart, you got that one right." CEO Byrne, you picked a good ad agency. Soft-core through and through, but who can possibly object?

Anyway my issue is with smarmy, maniuplative corporate executives. Caveat emptor! Now, would anyone like to know what I really think? (IMG:smilys0b23ax56/default/cool.gif)

This post has been edited by Pwok:

[Somey]

I'm retired. I did a bunch of things. Enough to know that American business on parade would look like the cast of the movie Freaks. In my first financial position, on the first day, the first thing I heard from the most experienced people was: "Never believe corporate management. They always lie." I remember being taken aback by the cynicism. Five years later, I was singing the same tune....

Yikes. You're quite sure you're not Lir, then?

Not that that would be a bad thing, mind you! Though I guess you wouldn't necessarily even know who Lir is, come to think of it...

Anyway, like it or not, Patrick Byrne is an important figure in this site's history - such as it is - and that counts for something even if he is a corporate executive. I'm certainly not saying you have to like him or anything like that, but please, try to sound a bit less accusatory.... If you can just manage that, everything should be all peachy-keeno...!

Pretty please, with sugar on top?

[Unrepentant Vandal]

I agree with you that "naked" short selling is a violation in the trust we place in the public equity markets, and I agree with you that Wikipedia has harbored at least a couple of people who have been astroturfing for the legitimacy of this illegtimate -- if not illegal -- practice. The more that can be done to expose them, the better.

It isn't practical to ensure that it is possible to borrow what is being sold, one just has to assume that it is. Inevitably this leads to occasional naked shorting.

That can be differentiated from deliberate naked short selling with no intention to settle - but there is little evidence of this happening, very little reason to do it, and where it is I suspect it's the fault of some quant strategy rather than a result of a grand conspiracy to keep company share prices down for kicks.

And what's a guy going by the name "Unrepentant Vandal" doing in the stock-trading game? Somehow I just can't see a guy in an Armani suit sitting down and deliberately posting misinformation to WP, not to mention going on a blanking spree. The world just gets weirder by the minute.

Don't worry, no Armani suits here!

Anyway, I don't trade stocks, but interest rate futures.

"Somewhere in America there are grandmothers eating dogfood for dinner tonight so some assholes on Wall Street can drive Porches."

My conscience is clear. All pet food sold in the UK has to be fit for human consumption (IMG:smilys0b23ax56/default/biggrin.gif)

[Patrick Byrne]

"CEO Byrne is pissed about his stock and his stock options, and because he's pissed then by God it's the biggest issue in the whole world because he's a CEO and he says so. "

Actually, you are the one who is in the "because I say so" mode. As I wrote earlier, by age 15 most of us outgrow the habit of arguing by impugning the motives of the others. You have made this claim repeatedly, along with other claims regarding blame shifting, without adducing evidence for them, which is right and appropriate because they is false. You are, however, reading from the Party Line playbook magnificently, though.

I came here a year ago and posted information about Slim Virgin. Was that all driven by me being about "stock and stock options" too?

Let me make it simple. Here are two articles from Bloomberg Magazine. They describe two pernicious effects of naked short selling, one on entrepreneurs, one on shareholder democracy.

Feb 27, 2006 - Stock manipulation that turns proxy voting into a corporate hoax
http://www.bloomberg.com/apps/news?pid=new...id=a4OuCsU8r2Yg

Sep 2006 - How traders drive share prices down using borrowed and/or phony shares
http://cdn.overstock.com/06-09BloomMarket_NSS.pdf

Do you have any reply concerning the issues raised in these articles? Or are you just going to flog the "Patrick is just pissed, the reason he posted these is because he is pissed, these issues don't matter because Patrick is pissed" line of "reasoning"?

Patrick
PS No more "Mr. Byrne" please. There has never been a "Mr." on the Byrne side that I know of.

As I was quoted as saying in Fortune, "Somewhere in America there are grandmothers eating dogfood for dinner tonight so some assholes on Wall Street can drive Porches."

Ah. Thomas Jefferson, 1789. Well remembered Patrick.

Thanks, Kato.

[Kato]

Am I the only one who finds Somey's continued use of admin tools to post checkuser results on dissident voices disturbing?

(IMG:http://i210.photobucket.com/albums/bb311/Kato90125/shock.jpg)

[Unrepentant Vandal]

Am I the only one who finds Somey's continued use of admin tools to post checkuser results on dissident voices disturbing?

(IMG:http://i210.photobucket.com/albums/bb311/Kato90125/shock.jpg)

Somey seems pretty even handed with checkuser so far as I can tell. Anyway, checkusering is an essential tool for an administrator of a website - please don't fall into the trap of thinking that Wikipedia has a good model!

[Daniel Brandt]

Am I the only one who finds Somey's continued use of admin tools to post checkuser results on dissident voices disturbing?

Yes, I find it disturbing that he doesn't do it a lot more often. If I was running this board, all admins would be using their real names instead of screen names, and every single post, from admins and lesser mortals alike, would have the IP address from where it was posted displayed in the corner of the post itself.

The signal-to-noise ratio would improve significantly if this were the case.

[Patrick Byrne]

Mr Byrne, now you have an odd site. It at first looks like ebay but I can find no "about us" page and on your Wikipedia article it basically says you get your own inventory and sell it trying for low and that's that, making you like one of many discount online shopping sites, although the others are usually specialized. Then on closer digging into your site I find you have auctions with unique people selling. So people can sign up and sell and then they're competing with the main bulk of items of what you're selling and it's possible that there may be a price war and someone on the auction side may win and your site becomes more of an auction site as if the auction side can't keep up then the auctions will be basically hardly any items like it is now, just like on most online auction sites other than ebay.

Your site also has in no way tried to fix ebay's feedback system from what I've seen and I know a lot of ways on how to fix that.

As for naked short-selling, Wikipedia has the most poorly written article on with combining unclarity with generally promoting naked short selling as much as it can. The rest of the internet appears to be against it. It's also takes a lot of reading to understand how exactly it can happen, generally this long thing http://cmkxdiamond.proboards66.com/index.c...92996593&page=2 So, Unrepentent Vandal, I'm not sure how you yourself could be naked short selling. Maybe you meant regular short selling? It appears more like if I bought a bunch of shares of stock using sharebuilder.com and sharebuilder.com just claimed I have the stock and didn't buy any for me then unless the company tanks, sharebuilder.com loses money. Unrepentent Vandal, did you sell someone fake stock or just regular short sell?

Back to Mr. Byrne, now I read that your company has been naked short sold for a very long time, like someone is trying to kill it. But based on the excessive length it looks like someone tried to kill it early by naked short selling, but they failed, and then the fake shares never dematerialized.

Gary Weiss supposedly is against bad stock practices and should know better, but he take the naive idea that naked short selling is good because it can get rid of scam companies instead of causing more problems than it selfs, but then you and WordBomb say he is on a campaign against your company. So who tried to take out Overstock and why and who is still trying to take them out?

Dear Lamont,

As far as Wikipedia goes, yes, those pages are poorly written nonsense because a fellow named Gary Weiss controls them. Gary is protected by Slim Virgin. The rest can be learned about within this site.

I am not going to address the issues about our company here, but the general topic of naked short selling and its effect on American companies can be researched here:

http://www.overstock.com/naked-short-selling.html

Patrick

[Jonny Cache]

Daniel, Greg, Somey, Whoever — Help !!!

All those years of maths and I just never learned to deal with numbers that had $, £, ¥, €, ¤, ad ∞ in front. Could somebody please ∑arise this stuff for phiduciary idiots like me?

TIA¬CREF …

Jonny (IMG:smilys0b23ax56/default/cool.gif)

This post has been edited by Jonny Cache:

[Patrick Byrne]

Daniel, Greg, Somey, Whoever — Help !!!

All those years of maths and I just never learned to deal with numbers that had $, £, ¥, €, ¤, ad ∞ in front. Could somebody please ∑arise this stuff for phiduciary idiots like me?

TIA¬CREF …

Jonny (IMG:smilys0b23ax56/default/cool.gif)

This is a fine 25 minute Bloomberg Special report that explains it clearly and simply. Some with firefox say they have trouble viewing it, but it works on mine.

http://cdn.overstock.com/07-0313Bloom_PhantomShares_NSS.wmv

[Jonny Cache]

Daniel, Greg, Somey, Whoever — Help !!!

All those years of maths and I just never learned to deal with numbers that had $, £, ¥, €, ¤, ad ∞ in front. Could somebody please ∑arise this stuff for phiduciary idiots like me?

TIA¬CREF …

Jonny (IMG:smilys0b23ax56/default/cool.gif)

This is a fine 25 minute Bloomberg Special report that explains it clearly and simply. Some with firefox say they have trouble viewing it, but it works on mine.

http://cdn.overstock.com/07-0313Bloom_PhantomShares_NSS.wmv

Many Thanks, I'll look at that next time I'm on my other machine …

Jonny (IMG:smilys0b23ax56/default/cool.gif)

[Unrepentant Vandal]

Daniel, Greg, Somey, Whoever — Help !!!

All those years of maths and I just never learned to deal with numbers that had $, £, ¥, €, ¤, ad ∞ in front. Could somebody please ∑arise this stuff for phiduciary idiots like me?

TIA¬CREF …

Jonny (IMG:smilys0b23ax56/default/cool.gif)

This is a fine 25 minute Bloomberg Special report that explains it clearly and simply. Some with firefox say they have trouble viewing it, but it works on mine.

http://cdn.overstock.com/07-0313Bloom_PhantomShares_NSS.wmv

With respect, it explains but it doesn't analyse the issue, which makes it rather unhelpful. And the problem is not with others' firefoxes, it is with your webserver reporting an incorrect MIME type, something that is very easy to fix.

[tarantino]

Am I the only one who finds Somey's continued use of admin tools to post checkuser results on dissident voices disturbing?

Yes, I find it disturbing that he doesn't do it a lot more often. If I was running this board, all admins would be using their real names instead of screen names, and every single post, from admins and lesser mortals alike, would have the IP address from where it was posted displayed in the corner of the post itself.

The signal-to-noise ratio would improve significantly if this were the case.

(my bold)

Yes, that's a good idea. Publicly, it should be all the time, or never.

[dtobias]

With respect, it explains but it doesn't analyse the issue, which makes it rather unhelpful. And the problem is not with others' firefoxes, it is with your webserver reporting an incorrect MIME type, something that is very easy to fix.

More on the MIME-type issue can be found in my site here.

[Pwok]

Yikes. You're quite sure you're not Lir, then?

I don't know who these other people are. Look, I have a real name in real life. I used the name "Pwok" when I signed up here because I seem to recall something in the sign-up process that asked people to use their Wikipedia sign-on. On Wikipedia, "Pwok" was truly random. I typed four keys and that's what came out. I've never had any sign on here other than the one I use now. As for IP addresses, I use Comcast, which assigns dynamic IP addresses. One of these days you'll see a different IP address for me, but it won't be because I changed it.

I'm certainly not saying you have to like him or anything like that, but please, try to sound a bit less accusatory

Okay, I'll try. To be fair, CEO Byrne is reaping the whirlwind from me after so many years of my dealing with some of the most elegant white trash this country has to offer, its corporate elite. The average homless vagrant is more honest and more interesting and more deserving than the average corporate executive, and I say that as someone who once took a homeless vagrant into my own house for a month and then got him a place to live and furnished the apartment, all at my own expense. The only thing that corporate America had on that guy is that executives smell better and dress better.

And to be really fair, that elegant white trash is quite well represented in the financial community. I could rip exit holes the size of the Holland Tunnel in that side of things, too. One of the things I'd say is that, if you're going to pick a financial scandal to go batshit about, this naked shorting thing is a fly on a cow's back. For the last 30 years, the story of the increasinly unproductive U.S. economy has been one of escalating financial scandals: Penn Central RR & Continental Illinois Bank and stupid farm lending in the '70s, commercial real estate and S&Ls in the '80s, the dot-com boom in the '90s, Bush's attempt to give the banks $40+ billion a year by "privatizing" one-third of Social Security in the early '00s, and now the mother of all scandals, the residential real estate meltdown.

The residential real estate meltown has a 50-50 chance of bringing on a second depression, '30s style. That's the one to worry about. Now the "news" media are cluing into it because their editors have mortgages too, and their personal wealth is at stake. Too late, as always. Five years ago, I was telling people to watch out for what was coming. I pulled the plug on the Internet stocks in early 1999. In 1990, by contrast, I had a hard time getting a job in the financial sector because I was thought to be crazily optimistic about what was coming. And when Clinton's first budget got approved, I was one of seven people in a room of 150 who raised their hands when asked who thought it would eliminate the federal deficit. In early 1993, I passed a memo around the company predicting budget surpluses by the end of 1990s. Five years ago, I started telling people that we'd have a depression that would make your teeth rattle. The monetary authorities are scared shitless about that, and if we're lucky (which I hope) they'll be able to patch it together with baling wire, twine, and mirrors, and instead we'll be like Japan in the '90s.

In the midst of all this, naked shorting is a nothingburger of an issue. It is a garden-variety penny-ante fraud, if that. Overstock hardly qualifies as a sympathetic victim in my eyes. A tempest it might be, but it's a tempest in a teapot, not the whole china cabinet like CEO Byrne would have us believe. If anyone wants to get exercised about the stock market, what they ought to worry about is the so-called "plunge protection team" that's been keeping the stock market alive since 1998. And if they really want to delve into it, they should notice that the average ROE of an American corporation has gone from 11% to about 18-19% since the 1970s, and that it's come straight out of the pockets of the employees who are supposed to buy all the shit. Then look at debt levels. Then look at the 1920s. Gawwwwwleee, Sgt. Carter, you mean ...?

This post has been edited by Pwok:

[gomi]

Am I the only one who finds Somey's continued use of admin tools to post checkuser results on dissident voices disturbing?

....
Yes, that's a good idea. Publicly, it should be all the time, or never.

You are suggesting that Somey told us who Pwok is. He did not. He told us, in a very limited way, who he is probably not. Far from the same thing. Other than the fact that he knows Pwok's IP address and you do not, I can't see what is disturbing.

I'm certainly not saying you have to like him or anything like that, but please, try to sound a bit less accusatory

Okay, I'll try. To be fair, CEO Byrne is reaping the whirlwind from me after so many years of my dealing with some of the most elegant white trash this country has to offer, its corporate elite.

Also, do try to remember that this is Wikipedia Review, not Overstock.com Review or Patrick Byrne Review. Members here have diverse political and social views. You are entitled to your opinion, as is Mr. Byrne, but this forum is not infinitely available to express them except as they bear on Wikipedia.

[Pwok]

Also, do try to remember that this is Wikipedia Review, not Overstock.com Review or Patrick Byrne Review. Members here have diverse political and social views. You are entitled to your opinion, as is Mr. Byrne, but this forum is not infinitely available to express them except as they bear on Wikipedia.

Whoa there, cowboy! Check the history of this thread. I am not the one who brought up Overstock.com and its situation. I merely reacted when that company's CEO posted here about it, and unlike a lot of people who discuss business and finance I actually have the background to do it reasonably intelligently. I don't blame you if you don't want Overstock and naked shorting discussed here, but I am not the one to complain to about that. Go check how many threads I've started that had nothing to do with Wikipedia. I think you will find the number to be zero.

You are suggesting that Somey told us who Pwok is. He did not. He told us, in a very limited way, who he is probably not. Far from the same thing. Other than the fact that he knows Pwok's IP address and you do not, I can't see what is disturbing.

Not that I especially care, but I'd note that this happened only when I harshly criticized someone who the administrator likes. So, yeah, I can see why some eyebrows went up.

This post has been edited by Pwok:

[Somey]

I'm still concerned about this whole "dissident" thing. Most of the people who run this board - including myself - are quite firmly in the anti-corporate, non-capitalist camp, aren't we? We have a member who calls himself a "Marxist," one who calls himself a "communist," and several who are clearly socialists... And then there are quite a few neo-cons, and some businessmen. I myself am a businessman, I just happen to be a left-leaning one. And while I do own some stock, let's just say I don't consider myself a "trader" - in fact, I was thinking about cashing it all in in the next couple of months, and using the profits I've made to buy something useful, like a box of band-aids. (Except that I don't think the profits are going to quite cover a whole box!)

Regardless, one's preferred economic system (or feelings about capitalism) shouldn't have any bearing on whether or not they can feel welcome here. There's a good argument for the idea that a pro-Wikipedia member is a "dissident" in our specific context, but none of the people involved in this latest dust-up really fit that description... do they?

[Pwok]

I suggest that no one go batshit. CEO Byrne introduced the Overstock.com dispute here, and I told him exactly what I thought of him, his company, and the dispute. It's not any more complicated than that. I actually think that, in Overstock's case, whoever edited the Wikipedia article did a good job of it. Of course, I'm not sure why individual companies have articles on Wikipedia, but that's a separate issue.

[Kato]

I'm not sure why individual companies have articles on Wikipedia, but that's a separate issue.

...and I'm sure our own Gregory Kohs would have some thoughts on that subject.

[JohnA]

Having actually seen the Bloomberg news item to which Patrick Byrne referred, he makes it crystal clear in that programme that he has no objection at all to short selling or short sellers.

His beef is with naked short selling, which is a fraudulent trade also known as "failure to deliver". The clear effect of naked short selling is to drive down the share price of the stock, causing damage to the target company's ability to raise capital and adversely affecting their credit rating.

Now, that isn't to say that overstock.com doesn't have problems in the market, but I'm sure Patrick Byrne will have no quarrel with questions about that point. He might tell us that overstock is on a much more secure financial footing than it was.

The larger issue is the use or abuse of social media sites, of which Wikipedia is clearly the elephant in the room in this regard. Wikipedia's reputation as a supposedly neutral arbiter and disseminator of factual information is, as we well know, a sham and a mirage. The abuse by Gary Weiss through a network of sockpuppets and with help from on high in Wikipedia is the next scandal after Slimvirgin is finally nailed.

The ultimate issue, the Tyrannosaurus Rex in the room if you will, is the amorality of Web 2.0 with regard to such things as social responsibility, privacy, historical accuracy, scholarship, democracy and civil liberties.

Patrick Byrne is right in the sense that Wikipedia (and by extension WR) are part of a larger question about the real nature of the World Wide Web as a disseminator of information, and what citizens across the world should do about it.

Wikipedia is clearly too important to be left to the Gary Weisses, Slimvirgins and Jimbo Waleses of this world. That's why due diligence and investigation is clearly important.

WR can and has already made history. We should make some more.

[Somey]

Yeah, what he said!

Not that I especially care, but I'd note that this happened only when I harshly criticized someone who the administrator likes. So, yeah, I can see why some eyebrows went up.

Well, you're new here... so it might be best if I explain a few things...

Gary Weiss has at least two, and possibly four, accounts here, none of which are suspended or banned. So, any time someone criticizes Overstock or Patrick, Wordbomb (aka Judd B.) assumes that the critic is one of three people, most likely Weiss himself. As the Wikipedia folks will tell you, Wordbomb has a long list of Weiss IP's, editing patterns, e-mail addresses, site-specific aliases, things like that. This is all considered "cyber-stalking" by the WP folks, but if you work for a company and some guy comes along and is that bound and determined to bring your company down, what are you going to do? Just sit there and watch it happen?

So, there have been a couple of instances in which Wordbomb has posted something publicly accusing a WR member of being Gary Weiss. That's not something we like to see, especially if it's unwarranted. This time I thought I'd head him off at the pass, so to speak - not leastwise because other people might have assumed the same thing, simply because of the fact that Gary Weiss exists.

Long story short, as long as ol' Gary is out there, almost anyone who criticizes Overstock will be suspected of being him. This is why Gary is such a nincompoop - he's so over the top about it that he's created a situation in which not only is he dismissible, but everyone who agrees with him is also in danger of getting the same reaction!

Pwok has posted some very good stuff on WR in the past few weeks, and he doesn't deserve that kind of suspicion, even if he did get a little nasty there... As long as he bears in mind the fact that Patrick is a member here too, and that we don't like to see members attacking other members (at least not publicly), then everything should be just fine.

[Emperor]

In the midst of all this, naked shorting is a nothingburger of an issue. It is a garden-variety penny-ante fraud, if that. Overstock hardly qualifies as a sympathetic victim in my eyes. A tempest it might be, but it's a tempest in a teapot, not the whole china cabinet like CEO Byrne would have us believe. If anyone wants to get exercised about the stock market, what they ought to worry about is the so-called "plunge protection team" that's been keeping the stock market alive since 1998. And if they really want to delve into it, they should notice that the average ROE of an American corporation has gone from 11% to about 18-19% since the 1970s, and that it's come straight out of the pockets of the employees who are supposed to buy all the shit. Then look at debt levels. Then look at the 1920s. Gawwwwwleee, Sgt. Carter, you mean ...?

Nice post.

Patrick and Overstock should be happy they're making anything at all. They're just a crappy Amazon knock-off with sleazier advertising.

I agree pushing American workers into debt, overworking them, undereducating them, etc. is a recipe for disaster. But private businesses and even large corporations are not the problem. The government is going to keep taking more and more, coming up with more and more ridiculous programs, until there is nothing left. By the time I finish paying for those morons who took out ridiculous loans, and other morons to build new houses below sea level, and millions and millions of bureacratic nitwits to process all the mess, how am I supposed to start a new business?

[Jonny Cache]

I'm still concerned about this whole "dissident" thing. Most of the people who run this board — including myself — are quite firmly in the anti-corporate, non-capitalist camp, aren't we? We have a member who calls himself a "Marxist," one who calls himself a "communist," and several who are clearly socialists … And then there are quite a few neo-cons, and some businessmen. I myself am a businessman, I just happen to be a left-leaning one. And while I do own some stock, let's just say I don't consider myself a "trader" — in fact, I was thinking about cashing it all in in the next couple of months, and using the profits I've made to buy something useful, like a box of band-aids. (Except that I don't think the profits are going to quite cover a whole box!)

Regardless, one's preferred economic system (or feelings about capitalism) shouldn't have any bearing on whether or not they can feel welcome here. There's a good argument for the idea that a pro-Wikipedia member is a "dissident" in our specific context, but none of the people involved in this latest dust-up really fit that description … do they?

I carry my Diss-Identity Card with me at all times — it's the only way DuBois in da Hood will let me step across the greenline onto maize & blue turf.

Jonny (IMG:smilys0b23ax56/default/cool.gif)

This post has been edited by Jonny Cache:

[Unrepentant Vandal]

Most traders do not set out to fail to deliver. But my understanding is a stock trade is still settled after 4 days, and that considerable pit trading still goes on in the US equity exchanges. In this situation, naked short selling is bound to happen, because humans make mistakes. And no one has really explained how market makers can operate without naked shorting unless they were to make greater spreads - in which case there goes liquidity!

I absolutely agree that setting out to naked short sell is market manipulation, but that news report doesn't really provide any evidence of that.

[Pwok]

Well, you're new here... so it might be best if I explain a few things...

Gary Weiss has at least two, and possibly four, accounts here, none of which are suspended or banned. So, any time someone criticizes Overstock or Patrick, Wordbomb (aka Judd B.) assumes that the critic is one of three people, most likely Weiss himself. As the Wikipedia folks will tell you, Wordbomb has a long list of Weiss IP's, editing patterns, e-mail addresses, site-specific aliases, things like that. This is all considered "cyber-stalking" by the WP folks, but if you work for a company and some guy comes along and is that bound and determined to bring your company down, what are you going to do? Just sit there and watch it happen?

So, there have been a couple of instances in which Wordbomb has posted something publicly accusing a WR member of being Gary Weiss. That's not something we like to see, especially if it's unwarranted. This time I thought I'd head him off at the pass, so to speak - not leastwise because other people might have assumed the same thing, simply because of the fact that Gary Weiss exists.

Long story short, as long as ol' Gary is out there, almost anyone who criticizes Overstock will be suspected of being him. This is why Gary is such a nincompoop - he's so over the top about it that he's created a situation in which not only is he dismissible, but everyone who agrees with him is also in danger of getting the same reaction!

Pwok has posted some very good stuff on WR in the past few weeks, and he doesn't deserve that kind of suspicion, even if he did get a little nasty there... As long as he bears in mind the fact that Patrick is a member here too, and that we don't like to see members attacking other members (at least not publicly), then everything should be just fine.

Hey, I'm not upset. You've got a point about the member v. member stuff, and I think I've dialed it back a tad as it concerns CEO Bryne himself (as opposed to the issue he's flogging). As for the rest, I understand. I've got a little comment board attached to the site I created about that Matt Sanchez character whose biography on Wikipedia triggered my pissing match with them. From time to time some whackjob comes by and goes crazy so I have to ban them. It's not something I like to do, but occasionally it's got to be done.

By the way, what is "Wordbomb?" As you said, I am new.

Most traders do not set out to fail to deliver. But my understanding is a stock trade is still settled after 4 days, and that considerable pit trading still goes on in the US equity exchanges.

Pit trading is quickly vanishing as the exchanges go all electronic. I think it's a problem, because one of these years we'll see a virus or just a lock up among computer programs. I'm no expert in trading mechanics, but I think I recall that settlements got speeded up to one day sometime in the 1990s.


This post has been edited by Pwok:

[Unrepentant Vandal]

Pit trading is quickly vanishing as the exchanges go all electronic. I think it's a problem, because one of these years we'll see a virus or just a lock up among computer programs. I'm no expert in trading mechanics, but I think I recall that settlements got speeded up to one day sometime in the 1990s.

"One of these years"? Lock ups have already happened, you know... Albeit I'm not aware of anything all *that* serious happening. A virus would not be plausible on LIFFE connect though, so far as I can tell. Don't know about anything else!

LIFFE went all electronic in 98 btw. A very different art. And I'm now looking forward to a new allocation algorithm on swissy coming in later this month, it's already been introduced on the short sterlings but I haven't had a chance to play with it yet.

[Nathan]

By the way, what is "Wordbomb?" As you said, I am new.

WordBomb is Wikipedia Review user WordBomb, aka Judd Bagley of Overstock.com (explanation here in second paragraph)

[Somey]

By the way, what is "Wordbomb?" As you said, I am new.

Go back to the first two paragraphs of the first post in this thread - it's all right there.

Or, you could try the Cla68 version... However, I wouldn't recommend getting too deeply into the history of this dispute, unless you like it when your head starts to really, really hurt.

[Patrick Byrne]

I'll address two points in one post.



Vandal says:

It isn't practical to ensure that it is possible to borrow what is being sold, one just has to assume that it is. Inevitably this leads to occasional naked shorting.

That can be differentiated from deliberate naked short selling with no intention to settle - but there is little evidence of this happening...

I absolutely agree that setting out to naked short sell is market manipulation, but that news report doesn't really provide any evidence of that.

In fact, Vandal, the SEC hired an economist, Leslie Boni, to study that very question. She was unique in that she was granted access to a great deal more data than other researchers have ever been allowed. She used it to test the hypothesis that these unsettled trades are arising out of "random human error" as some say (I call it "The Dog Ate My Stock Certificate Defense"). If it were truly random human error, then these errors would be spread across the market like a smooth layer of peanut butter, right? In fact, however, they are heavily concentrated in a comparitively small number of stocks, which is inconsistent with the hypoethsis that they are random, and consistent with the hypoethsis that they are deliberate, or "strategic" (unless one is going to postulate the existence of dogs smart enough to eat only certificates of high neg rebate stocks).

Strategic delivery failures in U.S. equity markets
http://www.sciencedirect.com/science/artic...f955d51c395a8fe


Pwok says, "CEO Byrne introduced the Overstock.com dispute here, and I told him exactly what I thought of him, his company, and the dispute. "

You make my point for me once again, Pwok. Other than the introductory disclaimer identifying myself I have done everything possible to divorce this dispute from Overstock. The post to which I linked does not even mention Overstock. The fact is that so far you have refused to engage this subject beyond the facile bromides and knee-jerk insults one sees on a Yahoo message board. Good luck with that.

Patrick

[Unrepentant Vandal]

I don't have access to that paper (I did have an athens login not so long ago due to some help I gave a university, but no longer). Could you mirror it for a day or so?

[LamontStormstar]

and every single post, from admins and lesser mortals alike, would have the IP address from where it was posted displayed in the corner of the post itself.

So then Wikipedia could track every poster.

Everyone would use TOR, proxies, or at least switch to a nonstandard ISP (like a free one) to post. Most would not post at all.

Daniel, Greg, Somey, Whoever — Help !!!

All those years of maths and I just never learned to deal with numbers that had $, £, ¥, €, ¤, ad ∞ in front. Could somebody please ∑arise this stuff for phiduciary idiots like me?

TIA¬CREF …

Jonny (IMG:smilys0b23ax56/default/cool.gif)

This is a fine 25 minute Bloomberg Special report that explains it clearly and simply. Some with firefox say they have trouble viewing it, but it works on mine.

http://cdn.overstock.com/07-0313Bloom_PhantomShares_NSS.wmv

With respect, it explains but it doesn't analyse the issue, which makes it rather unhelpful. And the problem is not with others' firefoxes, it is with your webserver reporting an incorrect MIME type, something that is very easy to fix.

I posted a link earlier that explains it and there's no crap that takes a long time to download. Just stuff that takes a couple hours to read, but it does explain it.

[LamontStormstar]

As far as Wikipedia goes, yes, those pages are poorly written nonsense because a fellow named Gary Weiss controls them. Gary is protected by Slim Virgin. The rest can be learned about within this site.

I am not going to address the issues about our company here, but the general topic of naked short selling and its effect on American companies can be researched here:

Well you should address it here. Who tried to kill your company with naked short selling and how is Gary Weiss involved?


Why is your company unsure if it wants to be an online retailer or an online auction site? Why haven't you tried to fix the problem with the ebay-style feedback system? One fix is to take off the rating values and have it be pure comments and let the person who receives the comment be able to reply a second time if the feedback-leaver does a follow-up. If you ever want to compete with the online auction sites you should combine the retailer and auction aspect into a single search to gradually get more and more auction stuff to replace the online retailer aspect as at this point your selection as small. Maybe put the online retailer aspect into a single auction account that just used buy-it-now prices and let it get feedback.

I realize I'm not a rich CEO, though.

This post has been edited by LamontStormstar: