Patrick M. Byrne
Encyclopedia
Patrick M. Byrne is the president, CEO, and chairman of the board of directors
of Internet
retailer Overstock.com
. In 1999, Byrne took control of the company, then called D2: Discounts Direct, and changed its name to Overstock. He had previously served shorter terms leading two smaller companies, including one owned by Warren Buffett
’s Berkshire Hathaway
.
In 2002, Byrne took Overstock.com public. The company has since increased its revenue
to over $1 billion a year, and achieved full profitability in 2009.
In 2002, Byrne was named to BusinessWeek
’s list of the 25 most influential people in e-Business. and Ernst & Young
awarded Byrne the "2002 Milestone Award Winner Utah Region.". In 2010 Overstock.com was named the best retailer to work for in America by Forbes, noting that Byrne's 92% employee approval rating is the highest of any CEO in the nation.
Beginning in 2005, Byrne become known for his campaign against naked short selling
, a practice which he says has been used in violation of securities law to hurt the price of his and other companies' stock. Under his direction, Overstock.com has filed two lawsuits alleging improper acts by Wall Street firms, a hedge fund, and an independent research firm.
, former chairman of Berkshire Hathaway
's GEICO
insurance subsidiary and White Mountains Insurance Group. He holds a certificate from Beijing Normal University, has a Bachelor of Arts degree in Chinese studies from Dartmouth College
, a Master's degree from Cambridge University as a Marshall Scholar, and a Ph.D. in philosophy from Stanford University
.
Byrne was a teaching fellow at Stanford University from 1989 to 1991 and was manager of Blackhawk Investment Co. and Elissar, Inc. He 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.
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. Byrne has also focused on promoting education, particularly in support of implementing school vouchers and other educational reforms. Byrne was the largest donor to political causes in Utah in the period 2003-2006, while his father was the third-largest.
IPO of Overstock.com in 2002. The company was one of the first to go public under a system advanced by WR Hambrecht + Co
to retain a greater share of capital within the company rather than going to the investment bank underwriters used in conventional public offerings. Byrne has said that competing banks reacted against this, attempting to obstruct the success of the offering through negative reports and by shorting the company's stock. When Google
later in 2004 went public via a Dutch auction IPO, Byrne commented that Wall Street firms similarly pushed negative stories, but did not keep it from going forward successfully. Four years after the OpenIPO, one official of Hambrecht, its now former co-CEO Clay Corbus was added to Overstock's board of directors.
. Fortune writer Bethany McLean said that Byrne had become a "hero to those who believe that short-sellers are the operators of Wall Street's ultimate black box, predators who destroy companies through innuendo, bullying, political connections--and sometimes through an illegal practice known as 'naked shorting.'" Byrne financed and largely wrote a full-page advertisement in the Washington Post which said "Naked short-selling ... is literally stealing money from the widows, retirees, and other small investors." In a letter to the Wall Street Journal in April 2006, Byrne contended that "blackguards have practiced 'failure to deliver'" of securities, were "destroying businesses and (probably) destabilizing our capital markets." Since 2005, Overstock has filed two lawsuits relating to the matters under Byrne's direction.
In the first lawsuit, filed 2005, Overstock.com filed suit against hedge fund Rocker Partners
and the equities research
firm, Gradient Analytics
(formerly Camelback Research Alliance), saying they illegally colluded in short-selling the company while paying for negative reports to drive down share prices. The defendant (i.e. Gradient Analytics et al.) moved to have the case dismissed, however the California court ruled in August 2006 that the suit should be allowed to proceed. Gradient filed a counter-complaint against Byrne for libel. A portion of this suit was settled out of court on October 13, 2008, when Overstock.com and Gradient dropped the claims against each other after Gradient retracted allegations that Overstock's reporting methods did not comply with rules established by the FASB
, stated they believed Overstock.com complied with GAAP
standards, and that three directors were independent, and apologized. In December 2009, the suit against Rocker, whose name had since been changed to Copper River Partners, was settled by Copper River paying $5 million, payment of which Byrne stated he received on December 9, 2009.
Overstock.com filed a second lawsuit in 2007 against a number of large investment banks relating directly to alleged illegal naked short selling. Both cases remain in litigation.
Byrne's campaign against naked short selling and others who he feels have targeted him and his company has attracted controversy. In her article on Byrne's 2005 conference call, Bethany McLean said "From a distance he seems like a bully, accusing people who depend on their reputations of corruption. The time is rapidly approaching when he will have to deliver--both the numbers to prove that the business can make money and the facts to prove that the Sith Lord exists." In a column in the New York Times
in February 2006, journalist Joseph Nocera
described Byrne's actions as a "campaign of menace" and as an attempt to silence Overstock.com's critics. MarketWatch's Herb Greenberg
has called Byrne the runner-up for Worst CEO of the Year two years running. One of Byrne's claims, that naked shorting can cause heavy dilution of a company's stock by creating sales untied to any specific shares, has been criticized by Wall Street Journal
columnist Holman W. Jenkins
. Byrne has cited Overstock.com as an example of a company whose shares have been more than 100% sold short in one quarter, but Jenkins suggests that this merely reflects Overstock.com's heavy trading volume and relatively small public float. Jenkins further argues that brokers are inherently cautious in using the practice, due to the high risk of trading shares that are not guaranteed to be available. Byrne has denied that his campaign is primarily about Overstock.com. However, Byrne has also received favorable coverage, and was featured in a Bloomberg Television
show on Naked Short Selling
, "Phantom Shares", in March 2007.
In March 2006, John (Jack) Byrne, chairman of Overstock.com and father of Patrick Byrne, said that he was thinking of stepping down in disagreement over the campaign against naked shorting. In April 2006, John Byrne stepped down to become vice-chairman, and in July of that year he resigned from Overstock's board of directors. In August 2008, Jack Byrne said that after "much initial skepticism" he believed his son was "right all along" about the battle and lawsuits with short-sellers and analysts.
Byrne was instrumental in Utah's passage of a law aimed at curbing naked short selling. The legislation was repealed in February 2007, after state representatives were advised that it probably would not withstand judicial scrutiny due to federal preemption
. Byrne criticized the repeal, but Senate Majority Leader Curtis Bramble
said that legal advisers believed that the state would lose any litigation over the law.
A Securities and Exchange Commission investigation of Gradient was initiated but then dropped in February 2007. In July 2007, two American Stock Exchange
options market makers were fined and suspended for using Regulation SHO exemptions to "impermissibly engage in naked short selling" in trades involving options and stocks for their own account. Overstock shares were believed to be among the stocks traded. The market makers settled without admitting or denying the allegations. None of the defendants sued by Overstock were named in the decision, but the Dow Jones News Service said that the decision was likely to be used by Byrne in pursuing his case.
After the crisis in the North American markets in 2008, Byrne received positive press. A Salt Lake Tribune article reported that "These days, when people talk of Byrne, the word 'vindication' comes up a lot."
Byrne was criticized by the Lex column of the Financial Times
in November 2009, after Overstock.com fired its second auditor in nine months and filed an unreviewed quarterly financial statement with the Securities and Exchange Commission. Referring to his campaign against naked shorting, the newspaper said that "The weirdness of his message and his attacks on respected journalists who dared to disagree have not helped his cause."
with Peter Jennings
, Fortune
, CBS
Marketwatch, and BusinessWeek
, among others. He has also appeared on Bloomberg TV, CNBC
, and Fox News shows such as Your World with Neil Cavuto
. In 2002, Byrne was named to BusinessWeek
’s list of the 25 most influential people in e-Business in 2002: the magazine cited survival strength and vision as qualities that qualified Byrne for the list. and Ernst & Young
awarded Byrne
the "2002 Milestone Award Winner Utah Region." Also in 2003 Overstock came no.1 in MountainWest Capital Network (MWCN) Utah100 award for the fastest growing company in Utah. Fastest Growing category are based on percentage revenue increases in the five preceding years. Byrne also won the first-ever Utah Best of State Awards for Community Development in 2003.
Byrne also serves as co-chair (with Rose Friedman) for The Friedman Foundation for Educational Choice. The non-profit organization was founded by Milton
and Rose Friedman
and promotes school vouchers and other forms of school choice.
Byrne and his family contributed most of the funds in support of House Bill 148 in Utah
, a bill that would allow the state to provide funding vouchers for students who decide to leave public schools for private schools. In January 2008, it was reported that Byrne and his parents contributed about $4 million to the pro-voucher campaign, or three-quarters of its $5.4 million funding. Opponents of vouchers, funded mostly by the teacher unions, spent $4 million; approximately $3 million came from the National Education Association
. When that bill was defeated in a statewide referendum (62% opposing vs. 38% favoring), the Salt Lake Tribune reported that Byrne "called the referendum a 'statewide IQ test' that Utahns failed." He said, "They don't care enough about their kids. They care an awful lot about this system, this bureaucracy, but they don't care enough about their kids to think outside the box."
Byrne criticized Utah governor Jon Huntsman
for not sufficiently supporting the voucher campaign. According to Byrne, Huntsman had before he was elected stated that he was "going to be the voucher governor," and Byrne had donated $75,000 to Huntsman's campaign for governor in 2004. However, to Byrne's disappointment, the moment Huntsman was elected he went missing from the debate, and Byrne told the Associated Press that he would now bankroll anyone who could defeat Huntsman at the polls, "even a communist".
During the school voucher debate, Byrne said of high school dropouts, "Right now, 40 percent of Utah minorities are not graduating from high school. You may as well burn those kids. That's the end of their life. That's the end of their ability to achieve in this society if they do not get a high school education. You might as, just throw the kids away." He was criticized for the comment by the Utah NAACP
, but rejected their demand for an apology.
Board of directors
A board of directors is a body of elected or appointed members who jointly oversee the activities of a company or organization. Other names include board of governors, board of managers, board of regents, board of trustees, and board of visitors...
of Internet
Internet
The Internet is a global system of interconnected computer networks that use the standard Internet protocol suite to serve billions of users worldwide...
retailer Overstock.com
Overstock.com
Overstock.com , also known by its shortcut, O.co, is an online retailer headquartered in Cottonwood Heights, Utah, near Salt Lake City. Founded in 1997 by Robert Brazell, under the name D2: Discounts Direct, it was a pioneering online seller of surplus merchandise which, upon its failure in 1999,...
. In 1999, Byrne took control of the company, then called D2: Discounts Direct, and changed its name to Overstock. He had previously served shorter terms leading two smaller companies, including one owned by Warren Buffett
Warren Buffett
Warren Edward Buffett is an American business magnate, investor, and philanthropist. He is widely regarded as one of the most successful investors in the world. Often introduced as "legendary investor, Warren Buffett", he is the primary shareholder, chairman and CEO of Berkshire Hathaway. He is...
’s Berkshire Hathaway
Berkshire Hathaway
Berkshire Hathaway Inc. is an American multinational conglomerate holding company headquartered in Omaha, Nebraska, United States, that oversees and manages a number of subsidiary companies. The company averaged an annual growth in book value of 20.3% to its shareholders for the last 44 years,...
.
In 2002, Byrne took Overstock.com public. The company has since increased its revenue
Revenue
In business, revenue is income that a company receives from its normal business activities, usually from the sale of goods and services to customers. In many countries, such as the United Kingdom, revenue is referred to as turnover....
to over $1 billion a year, and achieved full profitability in 2009.
In 2002, Byrne was named to BusinessWeek
BusinessWeek
Bloomberg Businessweek, commonly and formerly known as BusinessWeek, is a weekly business magazine published by Bloomberg L.P. It is currently headquartered in New York City.- History :...
’s list of the 25 most influential people in e-Business. and Ernst & Young
Ernst & Young
Ernst & Young is one of the largest professional services networks in the world and one of the "Big Four" accountancy firms, along with Deloitte, KPMG and PricewaterhouseCoopers ....
awarded Byrne the "2002 Milestone Award Winner Utah Region.". In 2010 Overstock.com was named the best retailer to work for in America by Forbes, noting that Byrne's 92% employee approval rating is the highest of any CEO in the nation.
Beginning in 2005, Byrne become known for his campaign against naked short selling
Naked short selling
Naked short selling, or naked shorting, is the practice of short-selling a financial instrument without first borrowing the security or ensuring that the security can be borrowed, as is conventionally done in a short sale. When the seller does not obtain the shares within the required time frame,...
, a practice which he says has been used in violation of securities law to hurt the price of his and other companies' stock. Under his direction, Overstock.com has filed two lawsuits alleging improper acts by Wall Street firms, a hedge fund, and an independent research firm.
Background
Patrick Byrne is the son of John J. ByrneJohn J. Byrne
John J. Byrne is a longtime insurance industry executive who was CEO of GEICO, White Mountains Insurance Group and Fireman's Fund. He also served as chairman of Overstock.com.-Early background :...
, former chairman of Berkshire Hathaway
Berkshire Hathaway
Berkshire Hathaway Inc. is an American multinational conglomerate holding company headquartered in Omaha, Nebraska, United States, that oversees and manages a number of subsidiary companies. The company averaged an annual growth in book value of 20.3% to its shareholders for the last 44 years,...
's GEICO
GEICO
The Government Employees Insurance Company is an auto insurance company. It is a wholly owned subsidiary of Berkshire Hathaway that as of 2007 provided coverage for more than 10 million motor vehicles owned by more than 9 million policy holders. GEICO writes private passenger automobile insurance...
insurance subsidiary and White Mountains Insurance Group. He holds a certificate from Beijing Normal University, has a Bachelor of Arts degree in Chinese studies from Dartmouth College
Dartmouth College
Dartmouth College is a private, Ivy League university in Hanover, New Hampshire, United States. The institution comprises a liberal arts college, Dartmouth Medical School, Thayer School of Engineering, and the Tuck School of Business, as well as 19 graduate programs in the arts and sciences...
, a Master's degree from Cambridge University as a Marshall Scholar, and a Ph.D. in philosophy from Stanford University
Stanford University
The Leland Stanford Junior University, commonly referred to as Stanford University or Stanford, is a private research university on an campus located near Palo Alto, California. It is situated in the northwestern Santa Clara Valley on the San Francisco Peninsula, approximately northwest of San...
.
Byrne was a teaching fellow at Stanford University from 1989 to 1991 and was manager of Blackhawk Investment Co. and Elissar, Inc. He 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.
Byrne has a black belt in tae kwon do, and once pursued a career in professional boxing
Boxing
Boxing, also called pugilism, is a combat sport in which two people fight each other using their fists. Boxing is supervised by a referee over a series of between one to three minute intervals called rounds...
. 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. Byrne has also focused on promoting education, particularly in support of implementing school vouchers and other educational reforms. Byrne was the largest donor to political causes in Utah in the period 2003-2006, while his father was the third-largest.
Overstock.com
In 1999, Byrne was approached by the founder of D2-Discounts Direct, asking for capital. The company had generated slightly more than $500,000 in revenue the previous year by liquidating excess inventory online. Byrne found the idea of online closeouts intriguing, and invested $7 million for a 60 percent stake in the company in the spring of 1999. In September the same year he took over as CEO, and the following month the company was renamed Overstock.com.Worldstock
During a vacation in Southeast Asia Byrne found that many village artisans were held back by the lack of retail channels, as their production was fragmented and the quantities produced were small. He further realised that the Overstock model was perfectly suited for their needs. In 2001 he therefore set up the Worldstock division of Overstock. Worldstock searches through villages all over the world for people capable of producing quality products, by 2006 there were approximately 6,000 producers contributing. On average, about 70 percent of the retail price on all Worldstock items sold goes directly to the artist."Dutch Auction" IPO
Byrne initiated a Dutch auctionDutch auction
A Dutch auction is a type of auction where the auctioneer begins with a high asking price which is lowered until some participant is willing to accept the auctioneer's price, or a predetermined reserve price is reached. The winning participant pays the last announced price...
IPO of Overstock.com in 2002. The company was one of the first to go public under a system advanced by WR Hambrecht + Co
WR Hambrecht + Co
WR Hambrecht + Co. is a full service investment bank with headquarters in San Francisco and offices in New York, Boston, Philadelphia, and Tokyo. It specializes in using its unique auction process called OpenIPO to compete with the traditional methods of larger and more established banks. Recently,...
to retain a greater share of capital within the company rather than going to the investment bank underwriters used in conventional public offerings. Byrne has said that competing banks reacted against this, attempting to obstruct the success of the offering through negative reports and by shorting the company's stock. When Google
Google
Google Inc. is an American multinational public corporation invested in Internet search, cloud computing, and advertising technologies. Google hosts and develops a number of Internet-based services and products, and generates profit primarily from advertising through its AdWords program...
later in 2004 went public via a Dutch auction IPO, Byrne commented that Wall Street firms similarly pushed negative stories, but did not keep it from going forward successfully. Four years after the OpenIPO, one official of Hambrecht, its now former co-CEO Clay Corbus was added to Overstock's board of directors.
Campaign against naked shorting and analysts
In a conference call with analysts in August 2005, Byrne said that "there's been a plan since we were in our teens to destroy our stock, drive it down to $6--$10 ... and even a plan for how the company would then get whacked up." He said that the conspirators were part of a "Miscreants Ball," headed by a "Sith Lord," who he refused to identify but said "he's one of the master criminals from the 1980s." Byrne said the conspiracy included hedge funds, journalists, investigators, trial lawyers, the SEC, and Eliot SpitzerEliot Spitzer
Eliot Laurence Spitzer is an American lawyer, former Democratic Party politician, and political commentator. He was the co-host of In the Arena, a talk-show and punditry forum broadcast on CNN until CNN cancelled his show in July of 2011...
. Fortune writer Bethany McLean said that Byrne had become a "hero to those who believe that short-sellers are the operators of Wall Street's ultimate black box, predators who destroy companies through innuendo, bullying, political connections--and sometimes through an illegal practice known as 'naked shorting.'" Byrne financed and largely wrote a full-page advertisement in the Washington Post which said "Naked short-selling ... is literally stealing money from the widows, retirees, and other small investors." In a letter to the Wall Street Journal in April 2006, Byrne contended that "blackguards have practiced 'failure to deliver'" of securities, were "destroying businesses and (probably) destabilizing our capital markets." Since 2005, Overstock has filed two lawsuits relating to the matters under Byrne's direction.
In the first lawsuit, filed 2005, Overstock.com filed suit against hedge fund Rocker Partners
David Rocker
David A. Rocker is the founder of the hedge fund Rocker Partners, LP , and former columnist for TheStreet.com...
and the equities research
Securities research
Securities research is a discipline within the financial services industry. Securities research professionals are known most generally as "analysts," "research analysts," or "securities analysts;" all the foregoing terms are synonymous...
firm, Gradient Analytics
Gradient Analytics
Gradient Analytics, Inc., founded in 1996 by Donn Vickrey and Dr. Carr Bettis as Camelback Research Alliance, Inc. and based in Scottsdale, Arizona, is an independent equity research company.-External links:...
(formerly Camelback Research Alliance), saying they illegally colluded in short-selling the company while paying for negative reports to drive down share prices. The defendant (i.e. Gradient Analytics et al.) moved to have the case dismissed, however the California court ruled in August 2006 that the suit should be allowed to proceed. Gradient filed a counter-complaint against Byrne for libel. A portion of this suit was settled out of court on October 13, 2008, when Overstock.com and Gradient dropped the claims against each other after Gradient retracted allegations that Overstock's reporting methods did not comply with rules established by the FASB
Financial Accounting Standards Board
The Financial Accounting Standards Board is a private, not-for-profit organization whose primary purpose is to develop generally accepted accounting principles within the United States in the public's interest...
, stated they believed Overstock.com complied with GAAP
Generally Accepted Accounting Principles
Generally Accepted Accounting Principles refer to the standard framework of guidelines for financial accounting used in any given jurisdiction; generally known as accounting standards...
standards, and that three directors were independent, and apologized. In December 2009, the suit against Rocker, whose name had since been changed to Copper River Partners, was settled by Copper River paying $5 million, payment of which Byrne stated he received on December 9, 2009.
Overstock.com filed a second lawsuit in 2007 against a number of large investment banks relating directly to alleged illegal naked short selling. Both cases remain in litigation.
Byrne's campaign against naked short selling and others who he feels have targeted him and his company has attracted controversy. In her article on Byrne's 2005 conference call, Bethany McLean said "From a distance he seems like a bully, accusing people who depend on their reputations of corruption. The time is rapidly approaching when he will have to deliver--both the numbers to prove that the business can make money and the facts to prove that the Sith Lord exists." In a column in the New York Times
The New York Times
The New York Times is an American daily newspaper founded and continuously published in New York City since 1851. The New York Times has won 106 Pulitzer Prizes, the most of any news organization...
in February 2006, journalist Joseph Nocera
Joseph Nocera
Joseph "Joe" Nocera is an American business journalist and author. He became a business columnist for The New York Times in April 2005. In March 2011, Nocera became a regular opinion columnist for The Times' Op-Ed page, writing on Tuesdays and Saturdays...
described Byrne's actions as a "campaign of menace" and as an attempt to silence Overstock.com's critics. MarketWatch's Herb Greenberg
Herb Greenberg
Herb Greenberg is an American journalist, was a columnist and blogger for MarketWatch.com and a former columnist for The Wall Street Journal....
has called Byrne the runner-up for Worst CEO of the Year two years running. One of Byrne's claims, that naked shorting can cause heavy dilution of a company's stock by creating sales untied to any specific shares, has been criticized by Wall Street Journal
The Wall Street Journal
The Wall Street Journal is an American English-language international daily newspaper. It is published in New York City by Dow Jones & Company, a division of News Corporation, along with the Asian and European editions of the Journal....
columnist Holman W. Jenkins
Holman W. Jenkins Jr
Holman W. Jenkins, Jr. is a journalist, editorial writer and member of the Wall Street Journal Editorial Board. He writes the conservative-leaning weekly column, "Business World," that appears in the paper and online every Wednesday...
. Byrne has cited Overstock.com as an example of a company whose shares have been more than 100% sold short in one quarter, but Jenkins suggests that this merely reflects Overstock.com's heavy trading volume and relatively small public float. Jenkins further argues that brokers are inherently cautious in using the practice, due to the high risk of trading shares that are not guaranteed to be available. Byrne has denied that his campaign is primarily about Overstock.com. However, Byrne has also received favorable coverage, and was featured in a Bloomberg Television
Bloomberg Television
Bloomberg Television is a 24-hour global network broadcasting business and financial news. It is distributed globally, reaching over 200 million homes worldwide. It is owned and operated by Bloomberg L.P...
show on Naked Short Selling
Naked short selling
Naked short selling, or naked shorting, is the practice of short-selling a financial instrument without first borrowing the security or ensuring that the security can be borrowed, as is conventionally done in a short sale. When the seller does not obtain the shares within the required time frame,...
, "Phantom Shares", in March 2007.
In March 2006, John (Jack) Byrne, chairman of Overstock.com and father of Patrick Byrne, said that he was thinking of stepping down in disagreement over the campaign against naked shorting. In April 2006, John Byrne stepped down to become vice-chairman, and in July of that year he resigned from Overstock's board of directors. In August 2008, Jack Byrne said that after "much initial skepticism" he believed his son was "right all along" about the battle and lawsuits with short-sellers and analysts.
Byrne was instrumental in Utah's passage of a law aimed at curbing naked short selling. The legislation was repealed in February 2007, after state representatives were advised that it probably would not withstand judicial scrutiny due to federal preemption
Preemption (law)
-Legal:*Federal preemption, displacement of U.S. state law by U.S. Federal law*"Preemption" is also sometimes used in the United States to refer to the displacing effect state laws might have on ordinances enacted by municipalities, especially in the context of alcoholic beverage laws, gun laws,...
. Byrne criticized the repeal, but Senate Majority Leader Curtis Bramble
Curt Bramble
Curtis Scott Bramble is a contentious American politician and Certified Public Accountant from Utah. A Republican, he is a member of the Utah State Senate, representing the state's 16th senate district in Provo...
said that legal advisers believed that the state would lose any litigation over the law.
A Securities and Exchange Commission investigation of Gradient was initiated but then dropped in February 2007. In July 2007, two American Stock Exchange
American Stock Exchange
NYSE Amex Equities, formerly known as the American Stock Exchange is an American stock exchange situated in New York. AMEX was a mutual organization, owned by its members. Until 1953, it was known as the New York Curb Exchange. On January 17, 2008, NYSE Euronext announced it would acquire the...
options market makers were fined and suspended for using Regulation SHO exemptions to "impermissibly engage in naked short selling" in trades involving options and stocks for their own account. Overstock shares were believed to be among the stocks traded. The market makers settled without admitting or denying the allegations. None of the defendants sued by Overstock were named in the decision, but the Dow Jones News Service said that the decision was likely to be used by Byrne in pursuing his case.
After the crisis in the North American markets in 2008, Byrne received positive press. A Salt Lake Tribune article reported that "These days, when people talk of Byrne, the word 'vindication' comes up a lot."
Byrne was criticized by the Lex column of the Financial Times
Financial Times
The Financial Times is an international business newspaper. It is a morning daily newspaper published in London and printed in 24 cities around the world. Its primary rival is the Wall Street Journal, published in New York City....
in November 2009, after Overstock.com fired its second auditor in nine months and filed an unreviewed quarterly financial statement with the Securities and Exchange Commission. Referring to his campaign against naked shorting, the newspaper said that "The weirdness of his message and his attacks on respected journalists who dared to disagree have not helped his cause."
Awards and Media attention
Since Byrne launched Overstock.com in 1999, he and his company have garnered attention from numerous national media outlets in addition to its coverage of his campaign against naked shorting. Among them are the Wall Street Journal, ABC NewsABC News
ABC News is the news gathering and broadcasting division of American broadcast television network ABC, a subsidiary of The Walt Disney Company...
with Peter Jennings
Peter Jennings
Peter Charles Archibald Ewart Jennings, CM was a Canadian American journalist and news anchor. He was the sole anchor of ABC's World News Tonight from 1983 until his death in 2005 of complications from lung cancer...
, Fortune
Fortune (magazine)
Fortune is a global business magazine published by Time Inc. Founded by Henry Luce in 1930, the publishing business, consisting of Time, Life, Fortune, and Sports Illustrated, grew to become Time Warner. In turn, AOL grew as it acquired Time Warner in 2000 when Time Warner was the world's largest...
, CBS
CBS
CBS Broadcasting Inc. is a major US commercial broadcasting television network, which started as a radio network. The name is derived from the initials of the network's former name, Columbia Broadcasting System. The network is sometimes referred to as the "Eye Network" in reference to the shape of...
Marketwatch, and BusinessWeek
BusinessWeek
Bloomberg Businessweek, commonly and formerly known as BusinessWeek, is a weekly business magazine published by Bloomberg L.P. It is currently headquartered in New York City.- History :...
, among others. He has also appeared on Bloomberg TV, CNBC
CNBC
CNBC is a satellite and cable television business news channel in the U.S., owned and operated by NBCUniversal. The network and its international spinoffs cover business headlines and provide live coverage of financial markets. The combined reach of CNBC and its siblings is 390 million viewers...
, and Fox News shows such as Your World with Neil Cavuto
Your World with Neil Cavuto
Your World with Neil Cavuto , which debuted as the Cavuto Business Report on the network's launch in 1996, is an American business television program appearing on Fox News Channel.-About the program:...
. In 2002, Byrne was named to BusinessWeek
BusinessWeek
Bloomberg Businessweek, commonly and formerly known as BusinessWeek, is a weekly business magazine published by Bloomberg L.P. It is currently headquartered in New York City.- History :...
’s list of the 25 most influential people in e-Business in 2002: the magazine cited survival strength and vision as qualities that qualified Byrne for the list. and Ernst & Young
Ernst & Young
Ernst & Young is one of the largest professional services networks in the world and one of the "Big Four" accountancy firms, along with Deloitte, KPMG and PricewaterhouseCoopers ....
awarded Byrne
the "2002 Milestone Award Winner Utah Region." Also in 2003 Overstock came no.1 in MountainWest Capital Network (MWCN) Utah100 award for the fastest growing company in Utah. Fastest Growing category are based on percentage revenue increases in the five preceding years. Byrne also won the first-ever Utah Best of State Awards for Community Development in 2003.
Education lobbying
In 2005, Byrne provided financial backing to form the advocacy group First Class Education, whose goal is to change state laws to require schools to spend at least 65 percent of their operating budgets on classroom expenses. Proponents of the standard contend that it would free up money to increase teachers' salaries without requiring tax increases. Critics say that many services deemed "non-classroom" are necessary for education, including librarians, school nurses, guidance counselors, food service workers and school bus drivers.Byrne also serves as co-chair (with Rose Friedman) for The Friedman Foundation for Educational Choice. The non-profit organization was founded by Milton
Milton Friedman
Milton Friedman was an American economist, statistician, academic, and author who taught at the University of Chicago for more than three decades...
and Rose Friedman
Rose Friedman
Rose Director Friedman , also known as Rose D. Friedman and Rose Director was a professor at the University of Chicago Law School. She was the wife of Milton Friedman , the winner of the 1976 Nobel Prize in Economics, and sister of Aaron Director...
and promotes school vouchers and other forms of school choice.
Byrne and his family contributed most of the funds in support of House Bill 148 in Utah
Utah
Utah is a state in the Western United States. It was the 45th state to join the Union, on January 4, 1896. Approximately 80% of Utah's 2,763,885 people live along the Wasatch Front, centering on Salt Lake City. This leaves vast expanses of the state nearly uninhabited, making the population the...
, a bill that would allow the state to provide funding vouchers for students who decide to leave public schools for private schools. In January 2008, it was reported that Byrne and his parents contributed about $4 million to the pro-voucher campaign, or three-quarters of its $5.4 million funding. Opponents of vouchers, funded mostly by the teacher unions, spent $4 million; approximately $3 million came from the National Education Association
National Education Association
The National Education Association is the largest professional organization and largest labor union in the United States, representing public school teachers and other support personnel, faculty and staffers at colleges and universities, retired educators, and college students preparing to become...
. When that bill was defeated in a statewide referendum (62% opposing vs. 38% favoring), the Salt Lake Tribune reported that Byrne "called the referendum a 'statewide IQ test' that Utahns failed." He said, "They don't care enough about their kids. They care an awful lot about this system, this bureaucracy, but they don't care enough about their kids to think outside the box."
Byrne criticized Utah governor Jon Huntsman
Jon Huntsman, Jr.
Jon Meade Huntsman, Jr. is an American politician and diplomat who served as the 16th Governor of Utah. He also served in the administrations of four United States presidents and is a candidate for the 2012 Republican presidential nomination.Huntsman worked as a White House staff assistant for...
for not sufficiently supporting the voucher campaign. According to Byrne, Huntsman had before he was elected stated that he was "going to be the voucher governor," and Byrne had donated $75,000 to Huntsman's campaign for governor in 2004. However, to Byrne's disappointment, the moment Huntsman was elected he went missing from the debate, and Byrne told the Associated Press that he would now bankroll anyone who could defeat Huntsman at the polls, "even a communist".
During the school voucher debate, Byrne said of high school dropouts, "Right now, 40 percent of Utah minorities are not graduating from high school. You may as well burn those kids. That's the end of their life. That's the end of their ability to achieve in this society if they do not get a high school education. You might as, just throw the kids away." He was criticized for the comment by the Utah NAACP
National Association for the Advancement of Colored People
The National Association for the Advancement of Colored People, usually abbreviated as NAACP, is an African-American civil rights organization in the United States, formed in 1909. Its mission is "to ensure the political, educational, social, and economic equality of rights of all persons and to...
, but rejected their demand for an apology.
External links
- http://www.deepcapture.com/ Deep Capture, a financial blog by Patrick Byrne
- Overstock.com website
- Interview with Byrne on NPR July 4, 2003
- CNET interview with Byrne March 6, 2006
- "CEO with a Cause" interview on NBC Universal's Ivillage.com June 27, 2007
- "A day in the life of Overstock CEO Patrick Byrne", interview on The Register website, Mar. 10, 2008
- Daily Show Interview with Patrick Byrne on Naked Short Selling (humorous), March 16, 2009