The Five Dumbest Things on Wall Street This Week

5. Byrne Unit

Overstock (OSTK) spent another week in the sick ward.

The Salt Lake City-based online discount retailer posted weak 2005 results Tuesday, missing analysts' estimates by a wide margin. CEO Patrick Byrne blamed internal systems problems and said the issues would take two or three quarters to fix, and warned that Overstock's growth would slow for 2006. The company even declined to announce its fourth-quarter bottom line, saying it was discussing some accounting questions with its auditors.

It seems only natural that the setback should have spelled selloff for Overstock shares. But instead, the heavily shorted stock rose 5%, confounding observers. "It is certainly possible that there is short-covering," says Rebecca Jones Kujawa, an analyst with Stanford Group in Boca Raton, Fla., told TheStreet.com's Jonathan Berr.

Of course, there's some irony there. Last summer, Byrne stirred things up on Wall Street by claiming Overstock shares were the victim of a short-selling conspiracy. Byrne alleged that the setup was orchestrated by "one of the master criminals of the 1980s" who was "supposed to end up with our company." He declined to name the figure but likened him to the "Sith Lord" of Star Wars renown.

This time around, there was less talk of Jedi knights and light sabers. "I am terribly sorry, and disappointed -- as are my colleagues," Byrne said in his letter to shareholders. "While we have staunched the bleeding, I anticipate it will take six to nine months to rehabilitate the patient and get him running again."

Rehab sounds like something the folks at Overstock should be familiar with.

Dumb-o-Meter score: 79. Byrne, baby, Byrne.

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