Breaking News: Overstock.com's Patrick Byrne still employed, Gary Weiss still mad about it

While I keep tabs on the Overstock.com situation because I regularly read the offerings from journalist Gary Weiss, fraud buster and convicted felon Sam E Antar, and fraud buster Tracy Coenen, I don't devote a lot of space at Lee Distad's Professional Opinion to the antics of Overstock's Surrealist and Conspiracy Theorist CEO Patrick Byrne.

There's two reasons for this. One, as I've said before, I generally only cover real companies, ones that have customers, have something resembling a business plan, and either do something constructive, or create something other than antipathy. The other reason is that I think Dr. Byrne is of the "bad press is better than no press" school of thought, and I refuse to give him the attention that he apparently seeks so desperately.

However, not everybody feels this way. Garry Weiss, author of Wall Street verus America just can't stop himself from kicking the same anthill over, again and again.

gary-weiss.com: Stop Presses! Overstock CEO Patrick Byrne Tells the Truth
the Today we have a real "man bites dog" story: Overstock CEO Patrick Byrne, whose wack-a-doo public statements rarely have any relationship to reality, has finally spoken the truth. Not the whole truth, by any means, but a reasonably close approximation.In a posting on his personal message board today, devoted mainly to a knucklehead rant on the market, Byrne acknowledged that he is the target of an SEC investigation -- not a good citizen giving information to the agency on "miscreants," as he has said in the past. He also said that the probe concerns his (cough cough) "irregular" actions.

I enjoy Gary Weiss' work, but he really needs to talk to somebody, or take up yoga or Tai Chi or something, because he's gonna give himself an ulcer from being that furious, and being angry at Byrne and Overstock seems so futile, given what a sad and tawdry spectacle they present.

Most recently, Dr. Byrne has attracted attention by having his henchman PR Flack conduct a hamfisted character assassination of a 19 year-old satirical blogger. On the bright side, the minor foofrah has brought the talents of young Zac Bissonnette, at Hedge Funnies.com to my attention. The kid is a genius, and I've added him to my list of regular stops in the blogosphere.

Of course, having written this, I'm probably now on The List . I will likely be dismissed as another one of the evil, ominous sockpuppets doing the bidding of the "Sith Lord"responsible for OSTK's dwindling share price (as opposed to OSTK making no money in, well, ever).

Regarding sinister conspiracies, my good friend Charles Farley, who is a total mensch once said to me "No one ever invited me into some International Jewish Conspiracy. God knows they should, with all these donations I make to the Schul!"

Of course, if there is a sinister conspiracy to discredit and ruin Patrick Byrne, I expect them to pay up. The "'Sith Lord" should drop me a line, and we can discuss which Swiss Bank account he will wire the money to.

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Whole Foods CEO busted for trolling the internet

I was going to leave this story alone. I really was. I said to myself "Self," I said "You're better than this. You don't need to go there."

Of course, I rebutted myself with "Really? Then what about all that crap about Paris Hilton a couple of weeks ago?"

I had to admit, I had a point.

Anyway, this story has already been flogged all over the blogosphere, so I'll keep it short:

WSJ: Whole Foods Is Hot, Wild Oats a Dud -- So Said 'Rahodeb'
Rahodeb was an online pseudonym of John Mackey, co-founder and chief executive of Whole Foods Market Inc. Earlier this year, his company agreed to buy Wild Oats for $565 million, or $18.50 a share.
For about eight years until last August, the company confirms, Mr. Mackey posted numerous messages on Yahoo Finance stock forums as Rahodeb. It's an anagram of Deborah, Mr. Mackey's wife's name. Rahodeb cheered Whole Foods' financial results, trumpeted his gains on the stock and bashed Wild Oats.

Even if Mr Mackey did not issue material non-public information, or make statements that impacted Whole Foods' stock price, his behavior, while not necessarily illegal, is definetely unethical, and probably incredibly thoughtless. You might even call it stupid.

For starters: Yahoo! Finance? Good God, that's the lowest of the low. I used to think that bulletin boards devoted to bodybuilding, powerlifting and other iron sports were full of bizarre, damaged personalities, until I took my first forray into browsing the world of internet stock boards. "Bedlam" doesn't even begin to cover it. I've ranted about this before, so I'll leave it there.

Secondly, as the officer of a publically traded company, Mr Mackey has a duty to shareholders to disseminate information through appropriate channels. If nothing else, hiding behind a pseudonym and cheerleading your own company to investors is sleazy as hell. No amount of circumlocution or fuzzy logic on his part can rationalize his way out of this.

Needless to say, the usual suspects in the blogosphere have all drawn the same parallel, comparing Mackey's behavior to that of Overstock.com's perennially surreal CEO, Patrick Byrne.

Long or Short Capital: The Patrick Byrne Award for Operational Focus and Excellence: Whole Foods CEO Rahodeb
I’m undecided if it’s a better or worse call than being a bat-crazy Quixote in public like Byrne. This is less ethical but more competent as as opposed to more ethical and less competent. But this is decidedley worse than not wearing a condom in Haiti, which is our standard threshold for management competence.

Dealbreaker: Only You Can Stop CEO Internet Addiction!
It's happened before. As Gary Weiss has shown, some chief executives simply cannot be trusted with the internet. If you are working in the IT department at a public company now, you might want to look into disconnecting your boss's internet connection. It's for his own good.

Gary Weiss: John Mackey, Patrick Byrne, and a Snoozing SEC
Mackey, it seems, posted anonymously on message boards to bash a competitor and boost the company's share price -- amazing behavior that came to light not because of an SEC enforcement action, on any number of possible grounds ranging from securities fraud to Regulation FD, but in a lawsuit by the Federal Trade Commission.

Gary Weiss seems especially indignant that the SEC seems to be uninterested in the unethical behavior of either Mackey or Weiss' favorite poster boy for bad governance, Patrick Byrne.

I will however go out on a limb and say that the Whole Foods story will diverge from the Overstock.com train wreck sooner rather than later. I forsee that John Mackey will be sent packing by his own board, under pressure from regulators and the media.

Why?

Because Whole Foods makes money. Because they're successful. Because there will be a lot of concerned parties on Wall Street with a vested interest in making sure that Whole Foods continues to succeed. Now that Mackey has shown what kind of thoughtless, half-cocked decision making he's capable of, he's a liability. Those concerned will want to have him ejected before he does something that scuttles the ship.

Compare that to OSTK, whose vested interests are limited solely to buy-and-hold investors who still believe in Santa Claus, and are still praying that one quarter, any quarter, their baby will show a profit. If your company was as beneath most people's radar as Overstock.com, you might resort to public temper tantrums to get attention too.

Anyway, Mackey will be crucified in the media, and will probably get the sack before the month is out. There, I said it.

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It's Good To Be Noticed, Plus a Great New Discovery

Heartfelt thanks to journalist Gary Weiss, who had kind words for this blog yesterday.

Two excellent blogs have come to my attention recently. They are essential reading for anyone wanting to really understand how companies work and why they go belly up.

One is Lee Distad's Professional Opinion, by one of the sharpest business bloggers there is, and the other is the FraudFiles Blog, by ace forensic accountant Tracy Coenen.

In addition to gratitude for the compliment, I am doubly grateful for having Ms Coenen's FraudFiles Blog brought to my attention. While I am personally more of a connoisseur of companies that are incompetent than ones that are actually corrupt, I do relish a good scandal, regardless. Her blog is going into my Favorites right now.

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Gary Weiss is Mad As Hell Over the Solengo/Dealbreaker.com Imbroglio

gary-weiss.com: The Latest in the Case of Solengo vs. Sanity

Forbes' columnist and freelance investigative journalist Gary Weiss has turned his badgeresque charm on Solengo Capital.

You know, if Dealbreaker.com hadn't scooped the contentious marketing brouchure, it would have been someone else. This is the internet. To paraphrase some attorney I heard quoted somewhere, getting a document back from the internet once it's been distributed is like pissing in a swimming pool and trying to get your pee back.

As I had pointed out before, the foofrah over this would have passed by now if they had let it go, with no real long-term impact. However, since Solengo's principals have gone on the offence, the story of this little imbroglio has spread throughout the blogosphere, if not the old media (something about which Mr. Weiss feels especially indignant).

Now what's happening is a combination of guerilla/viral anti-marketing, where anonymous commenters are posting links in the comment sections of blogs such as Weiss' to temporary hosting sites where interested parties can download a .pdf of the now-infamous brochure.

Newsflash to Solengo's principals: the genie won't go back in the bottle.

Again, if it wasn't Dealbreaker.com it would have been someone else. Dealbreaker.com's relatively high profile in the blog world might be the justification for seeking an injunction on them, but that's all the more reason to have let it ride.

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Wal-mart going into India? Who should we feel sorry for?

Journalist Gary Weiss has a new article in Forbes about Wal-mart's proposed venture into India.

Sorry, but I've never been a big fan of Wal-Mart's business practices. I love the stores--they're the first place I go when I run out of glue and kitty litter--and I even owned the stock some years ago. But Wal-Mart's aggressive attitude toward suppliers and its impact on small business give me an uneasy feeling in the pit of my stomach.
It's a bit how I feel when I see a Rottweiler sniff a kitten. Is it going to lick the kitty, or turn it into lunch?
Wal-Mart's (nyse: WMT - news - people ) plans to invade India give me just that kind of lump-in-the-gut feeling.

I'm not a fan of Wal-mart, though not in the same league as the leftie chest-thumpers.
My question is not can India survive Wal-mart, but can Wal-mart survive India?

Wal-mart is very good at what it does, but by nature of its mass, it is hidebound and rigid, and not especially good at adapting to conditions and situations that are off its planogram.

Wal-mart's entrance into Canada was checkered by gaffs and blunders caused by their master plan hitting the iceberg of the reality of a different retail market and a different culture. The most colorful were the english language-only Grand Opening flyers circulated in french speaking Quebec. It took time and millions of dollars to turn the boat around and get Wal-mart in synch with Canadian consumers.

India is a very different place from the US or Canada. Wal-mart's corporate myopia may not recognize that initially.

Don't expect Wal-mart to be able to barge into India without hemmoraging a lot of cash. I think that in the long term, they will be able to adapt, but they will learn some painfully expensive lessons before they gain anything like market dominance.

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