Patrick M. Byrne

Patrick M. Byrne is President and CEO of Overstock.com. He is most known for his recent allegations that naked short sellers (whom he has referred to as the "dark lord of the Sith") have been targetting the stock of Overstock.com.

Background

Patrick Byrne received a bachelor’s degree from Dartmouth College (Asian Studies & Philosophy), a master’s degree in philosophy from Cambridge University as a Marshall scholar, and a doctorate in philosophy from Stanford University.

Byrne served as Chairman, President and CEO of Centricut, LLC, a manufacturer of industrial torches, then held the same three positions at Fechheimer Brothers, Inc., a Berkshire Hathaway company manufacturing police, firefighter, and military uniforms. Currently Byrne is CEO and President of Utah-based internet retailer Overstock.com.

'Jihad' against naked shorting

In 2005, Byrne contended that a market-wide conspiracy to commit Naked Short Selling was targeting Overstock.com. Short selling is a way for an investor to bet that the share price of a company will decline, namely by borrowing shares from someone else, selling them, and then when the price is lower buying them back to return to the person one borrowed shares from. In naked short selling, the shares are not borrowed beforehand. The practice is controversial, and its prevalence is open to dispute.

Byrne held a conference call which was widely publicized because of its many allegations, including his contention that a "conspiracy" was targeting his company, and his comparing his company's adversaries to the "dark lord of the Sith". He repeated the conspiracy allegations several times during 2006, contending the markets were "broken."

Byrne subsequently commenced what he described as a "jihad" against naked short selling and short-sellers who he described as targeting his company. He filed suit against a hedge fund, Rocker Partners, which he claimed colluded with a stock research firm and the press to drive down the price of his stock. The defendants vigorously denied the charges. He also waged a public campaign against the practice, in the media and Internet.

Besides controversy over what many allege to be unstable behaviour of Byrne, there is a more general debate about whether a CEO should be concerned about naked short selling of the stock of his company. The reason is because if the CEO believes in the strength and future prospects of his company, naked short selling would cause the price of the company to temporarily fall, allowing the CEO to buy more of the valuable company at cheaper prices.

In March 2006, the chairman of Overstock.com, John Byrne -- Patrick Byrne's father -- said that he was thinking of stepping down in disagreement over his son's "jihad" over naked short-selling. This development contributed to the controversy over Byrne's behavior. [1] In April 2006, John Byrne stepped down to become vice-chairman, and was replaced by Patrick Byrne.

Media attention

Since Byrne launched Overstock.com in 1999, he and his company have garnered attention from numerous national media outlets. Among them are the Wall Street Journal, ABC News with Peter Jennings, Fortune, CBS Marketwatch, and Business Week, among others, and is a frequent guest on Bloomberg TV, CNBC, and Fox News shows (such as Cavuto and Kudlow & Cramer). In 2002, Byrne was named to Business Week’s list of the 25 most influential people in e-Business: the magazine cited survival strength and vision as qualities that qualified Byrne for the list. In 2003 Ernst & Young awarded Byrne an “Entrepreneur of the Year” award in the category of Lifetime Achievement.

More recently, however, he has received critical treatment in the press, largely because of his allegations conerning an alleged naked short-selling conspiracy. He is also criticized for his often sharp attacks on stock research analysts critical of his company, his lawsuit, and his sometimes personal attacks on individual members of the press.

Byrne has asserted that he is under attacks from "dishonest" members of the press, and has singled out journalists at Marketwatch.com, Dow Jones News Service and the New York Post. He has alleged that one reporter is "crooked," and that another receives payments from hedge funds via an ATM.

Byrne's allegations, which his critics deride as bizarre and patently false, have drawn sharp criticism from media outlets as diverse as the Wall Street Journal, New York Times, Fortune and the New York Post.

In a column in the New York Times in March 2006, journalist Joseph Nocera condemned Byrne's attacks on analysts and the press as a "campaign of menace."[2]

Personal life

Byrne has a black belt in tae kwon do and once pursued a career in professional boxing. He is a cancer survivor, and has ridden a bicycle across the country to raise awareness and money for cancer research at the Dana Farber Cancer Institute.

External links

• Overstock.com
• Byrne's Pan-Mass Speech
• Fortune Magazine article on short-selling crusade
• New York Times article on Overstock.com
• "The bizarre world of Patrick Byrne's Overstock" - The Register