Overstock shares surge after CEO Patrick Byrne quits
(Adds detail on Aug. 11 letter, updates share move)
By Noel Randewich
Aug 22 (Reuters) - Overstock.com's stock surged 9%
on Thursday after Chief Executive Officer Patrick Byrne
resigned, saying distraction and fallout related to his
involvement in a Federal Bureau of Investigation Russian
espionage probe made it difficult for him to lead the online
His resignation follows a drop of over 30% in Overstock's
shares over two days earlier this month, with investors rattled
after Byrne claimed in a statement that he had secretly been
involved with the FBI, starting in 2015.
The stock briefly surged 15% after the resignation
"While I believe that I did what was necessary for the good
of the country, for the good of the firm, I am in the sad
position of having to sever ties with Overstock, both as CEO and
board member," Byrne said in a resignation letter addressed to
shareholders on Thursday.
"It has been an honor to serve you through thick and thin,
threats grand and arcane, for the past 20 years."
In a letter to investors on Aug. 11, Byrne confirmed a
report by Fox News contributor Sara Carter on her website https://saraacarter.com/russia-probe-twist-a-billion-dollar-ceo-a-convicted-russian-agent-and-the-fbi
that he had a personal relationship with Maria Butina, a
convicted Russian agent currently in a U.S. prison. Butina
admitted to conspiring with a Russian official to infiltrate a
gun rights group and influence U.S. conservative activists and
In Byrne's Aug. 11 letter, which referred to the "deep
state," he said that starting in 2015 he assisted federal law
enforcement officials, whom he called "the Men in Black." He
said he was involved in probes "about political espionage
conducted against Hillary Clinton and Donald Trump."
A libertarian with a doctorate in philosophy from Stanford
University, Byrne for over a decade has publicly battled short
sellers targeting his company as it competes against larger
rivals, including Amazon.com Inc and eBay Inc.
He is known for making brash and freewheeling comments.
On Thursday, he lauded the remaining Overstock executive
team with pop culture references, calling the chief marketing
officer "Commander Data," after a Star Trek character. He said
another executive called an artificial intelligence system
"Skynet," after the Terminator movie series.
In a separate statement, Overstock said it appointed company
veteran Jonathan Johnson as interim CEO.
Overstock is currently more targeted by short sellers than
99% of U.S. companies, according to Refinitiv. Total short bets
against Overstock stand at $267 million, equivalent to almost
50% of its float, according to S3 Partners, a financial
Byrne is also a vocal proponent of blockchain technology and
In May, he lashed out at investors who questioned the
motivation behind his sale of about 15% of his Overstock shares,
saying he had to supplement his $100,000 a year salary and
vowing never to "give such an explanation again."
The stock has fallen more than 70% from record highs in
January 2018, when Overstock was benefiting from Byrne's plan to
launch a digital token, and from hype around Bitcoin.
"On any normal day, my presence is not conducive to
strategic discussions regarding our retail business. I believe
that going forward my presence will definitely not be conducive
to such strategic discussions," Byrne wrote in his resignation
(Reporting by Arjun Panchadar in Bengaluru; Editing by Shounak
Dasgupta and Richard Chang)
First Published: 2019-08-22 18:14:25
Updated 2019-08-22 20:35:30
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