A piece by longtime RealMoney contributor and author of The Big Picture declaring he was fed up with Overstock.com and Deep Capture has created quite a stir. We're reprinting the piece below with Ritholtz's permission.
Whatever little patience I had with Patrick Byrne and his overzealous friends at DeepCapture.com has now become officially exhausted.
As I noted last week (
), this group found the Facebook friends and relatives of any journalist, critic, fund manager or blogger who dared to criticize
(or Deep Capture), and then published the list.
The publicized names were not just colleagues and friends, but family members, including teenagers and kids.
, the entire operation was a pretexting scam, run by Judd Bagley, former director of communications at Overstock. His sleazy cyber-stalking/identify theft approach probably violated some law somewhere.
I don't know why I am on the Overstock enemies list. I am in favor of
, but I am against naked shorting. I've never said much about Overstock.com (see
) as they are mostly below my radar. The massive over-reactions to any criticism shows just how tenuous their business must be.
And whatever legitimacy the anti-naked shorting crowd had is thoroughly undercut by its association with Patrick Byrne. He is an imperfect messenger for what is a small but real problem. Having Byrne lead the crusade against naked shorting is like having Bernie Madoff chair a commission on Wall Street ethics; They are each simply the wrong person to lead any discussion on the issues.
My personal opinion on his obsession? It appears to me that Overstock CEO Patrick Byrne has used the naked shorting issue over the years as a distraction, a cover to take the focus off of problems at his company. Add some intimidation of journalists and sleazy behavior and you have the strategy one might expect from a mediocre CEO of a 3rd rate online retailer. The facts are that Overstock has a history of losing money (
called it an "unprofitable retail liquidation Web site"), and more recently of having
. Apparently, it's long been
Oh, and as a side note: I have no position in OSTK, long or short.
Here is a rhetorical judgment question: Why would anyone, especially the CEO of an online retailer, do anything to piss off the online world -- just around the holidays? How dumb is THAT?
I am totally out of patience with this bully, with Overstock.com, and the trolls at DeepCapture.com. Here is what I propose to do:
Request the FBI investigate and prosecute the identity theft, online cyber-stalking, and fraud of Judd Bagley of Overstock.com.
Request the SEC investigate Patrick Byrne, Judd Bagley, and Overstock.com for their part in this scam. If they find it to be a fraudulent scheme, then they should prosecute.
Call for a boycott of Overstock.com.
Lastly, some free advice to the Overstock
Board of Directors
: You have a fiduciary duty to the owners of your firm. It does not appear to me that you are fulfilling it. Your CEO appears to be distracted from running the firm. At a certain point, you will be called out for how you handled your obligations. Wise up...
As to Facebook, I guess it's time to defriend everyone who isn't actually a friend or relative. (I was getting bored with it anyway.)
At the time of publication, Ritholtz had no positions in the stocks mentioned, although holdings can change at any time.
Barry Ritholtz blogs at the popular
, offering up his macro perspectives on the capital markets, the economy, technology and digital media.
He is CEO and director of equity research of
, a quantitative research firm.
Ritholtz holds a bachelor's degree in political science (with a concentration in philosophy) from the State University of New York at Stony Brook, and a J.D. from the Benjamin N. Cardozo School of Law, where he studied corporate law and economics.
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