From time-to-time, I like to cut and paste from the ever-entertaining stock message boards about Overstock.com (NASDAQ:OSTK). I admit to being a casual observer. I don’t post on those message boards, but do read on occasion. And this exchange was too good to ignore. Plus I like to have the opportunity to read some of my favorite postings again without having to search the boards… they’re right here at my fingertips.

This message was posted last night on Investor Village. CEO Patrick Byrne likes to post on message boards as “Hannibal,” discussing Overstock issues while not disclosing his true identity. While regular readers of these boards likely know it’s Patrick, many others probably don’t. Do you think Patrick ought to provide full disclosure with each of his messages? I do.

Here’s what “Hannibal” had to say:

Shooting Fish in a Barrel Shooting Fish in a Barrel

Hey Sports Fans,

I came home from work early with a toothache. I see so many people defend me here. That’s nice. I wonder if even you defenders get how nonsensical are most of the attacks. As far as I can tell, whenever there is some unknown, the bad guys invent the worst interpretation possible, knowing no one here (including them) knows the truth on that point. They have wiggle room, and they wiggle.

So for those supporters who do wonder what the truth is on these points the miscreants raise, I’ll fill some squares in here. None of these trip any Reg FD issues, I think it is safe to say.

1) In the early days of Overstock I got a lot out of reading message boards. Both supporters and detractors posted things that I had not seen or thought of, and was able to take to heart. Call it, “The Power of the Swarm.” In fact, there was a short-oriented analyst that posted his analysis of something (I forget what it was) that was actually really valuable, and we changed what we were doing based on it. Then the organized hedge fund choagies showed up, and clogged, and it became less and less valuable on that score. Still, I tend to come to Investor Village at least once/week, and while I do not read every post, I do skim and still occasionally find useful thoughts.

I think I have all of these people on Ignore, yet occasionally I respond to one. How is that? From reading your interchanges with them. If it looks from reading your posts that one of the miscreants has said something interesting, I use the “In response to” feature, or else just sign out so that all the ignored messages appear. I did that today, see what they are clogging about, and will throw up some answers. It feels odd doing so, because it is hard to believe anyone would fall for their crapola, but I might as well give my supporters the ammunition.

2) “Gag order”? There is no gag order. In Overstock II (that is, our case against the Prime Brokers), some documents will be turned over in discovery marked “Highly confidential,” and are for attorneys’ eyes only. That is pretty normal, I think, and in any case, fine by me. Probably even for the best, because otherwise, I would someday write something on DeepCapture that they would say I learned through discovery, and I do not want that to happen.

3) The “1,000 companies” question? The miscreants ask for examples. If you give one like “Taser” they say something like, “It does not count because it did not go under.” If one gives as an example a company that did go under, they say, “That does not count because it is a crappy company: see, it went under!” In other words, no data disconfirms their theory. When someone holds a theory which no data can disconfirm, it is not a theory, it is dogma.

The truth is, the range of responsible estimates themselves vary all over. Bob Drummond’s piece in Bloomberg (“Games Short Sellers Play”) said that hundreds of companies are victimized each month. Robert Shapiro has given numbers ranging in the hundreds to a thousand or more. Those in the industry who are on my side (and there are many) widely describe that number as being a vast underestimate. One could argue that any company that went BK while on the Reg SHO list is possibly an example, just as one could argue that anyone who dies in a hospital where some psychopath had poisoned the food is possibly a murder victim (some would have died anyway, some wouldn’t have, but one should still not poison hospital food, right?).

But I return to the point they have dodged here. My response to all their hooey is, “Could be. Or maybe not. Let us see the data.” When the regulator is refusing to release data on the grounds that it could crack the system, it does not fill me, for one, with confidence.

3) From my brief acquaintance with their current claims they cannot seem to make up their minds about whether I tout the stock or not. I have a clip around here somewhere I’ll have to dig up. It is Jim Cramer, in 2004 or 2005, claiming that I was manipulating OSTK because I was always under-promising then trouncing the numbers. Then the Party Line became that I was touting the stock by “promising” high numbers that I did not deliver. Again, their theory is that I manipulate OSTK, and the data they adduce in support of their theory is either that we surpass expectations, or miss them. A theory that is confirmed by all possible data is not a theory, it’s dogma.

4) Somebody quoted a miscreant saying something to the effect that I had to know no one would believe me about saying the stock was risky (I cannot find the post now). Again, that’s just dumb. I think I’m the most transparent CEO around, and when I said that this was a risky and manipulated stock, I meant it. Sometimes a cigar is just a cigar. I don’t even understand the miscreant’s claim: what Machiavellian purpose might I have been pursuing by saying that?

5) Seedy bars and CNBC fax machines – As I mentioned in DeepCapture, I had two witnesses to the conversation where a threat was conveyed. And that was just the beginning: the threats are fully documented. And I stand by the fax machine comment 100% (and in fact, have confirmed it with another source). It is hilarious to me that miscreants quote that as though it were given that one should reject it a priori. It sure seems to have touched a nerve with CNBC. But no, I am not going to reveal publicly who told me that: as a journalist I must protect my sources. People can decide for themselves whether to believe me or not on that one.

6) If any of you good guys ever want me to give you ammunition by answering some of their accusations, please feel free to ask. Just post a question here and drop me an email to draw my attention to it. As long as I can answer while staying within the four corners of Reg FD, I will.

7) I have one great misgiving hovering over all this tit-for-tat, and that is, it plays into their agenda of clogging the discourse. In my view, all of their stuff reads like Sam Antar. It amounts to, “In 2002 you said that you don’t like blue but I saw you in a blue shirt last week and you carried the book Blue Highways by William Least Heat Moon and your eyes are blue so does that mean you don’t like what you are reading and how do you answer the charge that you are prejudiced against Native Americans?” It is total gibberish unworthy of response. You have to ask yourselves, why are they doing it? And I think it is all part of their scheme to clog away any understanding of what this fight is really about.

What is this fight about? Stealing from a recent blog, these are the claims I began making publicly in 2005:

a) The SEC had grown inappropriately close to Wall Street (which SEC Senior Investigator Gary Aguirre and a Senate Judiciary Committee report have since confirmed);

b) The New York state Attorney General Eliot Spitzer was a corrupt finger-puppet (subsequent events have confirmed the corruption, and I am waiting for anyone in the press to see the “finger-puppet” implication of Spitzer’s favorite girl, Ashlee, living rent-free in the summer home of Spitzer’s biggest donor, Jim Chanos);

c) Certain hedge funds had grown inappropriately close to certain journalists of the financial press (which CNBC’s own Jim Cramer has since confirmed);

d) As a result of the indolence of the SEC, New York Attorney General, and financial press, a circle of hedge funds were taking down companies through:

• naked short-selling (which SEC Chairman Chris Cox has since confirmed);
• class action lawsuits by Milberg Weiss (which a DOJ indictment and a stack of convictions has since confirmed);
• “independent research” which was in fact bought-and-paid for (to which I already had a stack of affidavits attesting).

When the miscreants go on their chants about how I make claims I do not back up, I would suggest you stick that in their face, rather than play their game of arguing about which companies that were poisoned deserved it.

Regards,
Patrick

And the response by poster “medchal” went like this:

Now, I’d suggest you should call a recess to handing out non-answers and get back to your company. After all, you have to continue handing out airy profit and revenue estimates, as well as thinking up what you’re going to say early next year about why Overstock didn’t make $10 MM this year.

Hi, Hannibal!

What a long message about nothing. Your sycophants will love it!

1) Why waste a whole paragraph answering something no one asked? We know you sometimes read posts by people you have on ignore. Who cares? Lots of us sometimes do that. But why announce your ignore list with a flourish, as you often do and just did again, if you’re going to ignore the ignores?

2) Yes, there is no gag order, as I said. It’s your clueless acolytes who raised that as a defense against your recurrent failure to produce evidence you claim to have. Let’s try to get the facts straight, since we agree on most of this: There is no gag order. Therefore, every time one of the delusionsals here refers to it, I’ll simply point toward your post and remind him. There is, of course, that order that you characterize as saying that “…some documents will be turned over in discovery marked ‘Highly confidential,’ and are for attorneys’ eyes only.” But that’s not exactly what the order says, is it? That order specifically identifies you as a trouble spot in handling confidential information, and that is not “pretty normal”, regardless of what you think. In fact it’s unique in my experience. But we agree that it’s no excuse for your lack of production of all the evidence you allude to.

3 [a?]) You don’t have to spend 262 words to tell us you have no answer. Just say so. Tell your flock gathered here that you can’t name a single company destroyed by naked shorting. Forget that “could be” dodge. Since you’ve made that claim dozens of times with increasing hyperbole (now it’s up to hundreds per month?), you owe your sheeple an example. Then, as someone who moaned loudly and publicly at one time about what “naked shorting” was doing to USXP, please tell Harvey he isn’t going to get his money back, because Altomare is a crook. It’s people like you are largely responsible for his ill-founded hopes and opinions, and you owe it to him at least to straighten him out at this late date so he can get on with his life. That’s unless, of course, you have a garage full of secret evidence that indicates otherwise, but just can’t produce it due to your journalistic code of honor, in which case you should at least let Harvey see it. Go ahead and be a man: Disillusion him once and for all, or buck him up with some non-invisible evidence.

3 [b?]) “From my brief acquaintance with their current claims they cannot seem to make up their minds about whether I tout the stock or not.” Let me help you out on that (and save your effort to find that clip): You tout the stock. Handing out unrealistic earnings numbers, as you did in December, and prior to December–and as you are doing now–is touting the stock. Beating your breast about your own moral purity and laying the blame for poor performance on others, as you do constantly, is also touting the stock. See 4) below.

4) “Somebody quoted a miscreant saying something to the effect that I had to know no one would believe me about saying the stock was risky….” Wrong on two counts, Hannibal: a) I am not a “miscreant” by any acceptable definition of that word, and you can’t find an iota of evidence that I am, even though I suppose you’ll just say you have it, as you always do. (It’s probably stacked up in some garage, right?) I’ve never misled anyone about your company’s earnings, as you have. I’ve never made outlandish claims about others without being willing to produce the evidence, which is one of your favorite pastimes. And I have never set stalkers on anyone, as you have. b) Nice try with “something to the effect” and “I cannot find the post”. You folks have a lot of trouble finding things when you wish to misquote something. As you probably know full well, I did not say that “no one would believe [you] about saying the stock was risky”. What I said was, “Byrne knows no one will listen to his phony warnings about not buying the stock.” There’s a world of difference between people believing you and people listening to you (meaning, in common English parlance, heeding your warnings). The fact is, you enjoy your demigod status with your fawning admirers, and you know statements like that are not going to stop them from buying and holding the stock. Don’t dispute this with me. Ask one of them if he buys or owns less OSTK because of your statements. The confusion in his answer, as he tries to uphold your contradictory statements, will be a joy to behold.

5) “I stand by the fax machine comment 100% (and in fact, have confirmed it with another source).”… “But no, I am not going to reveal publicly who told me that: as a journalist I must protect my sources.” Gosh, Hannibal, I stand by my amused disbelief of your preposterous stories 100%, too, and I have just found eight additional sources that refute that fax machine fairy tale. Unfortunately, I am not going to reveal my sources, either, even though they’re better than yours. Everyone should simply believe my sources because I have more of them than you do. He who cites the greatest number of invisible sources wins the “journalism” war, right? After all, we’re all “journalists” here, even though some of us draw a salary for supposedly spending our time running public companies for the benefit of stockholders.

6) “If any of you good guys ever want me to give you ammunition by answering some of their accusations, please feel free to ask.” I suppose by “good guys” you mean the ones that swear a lot, toss virtual poison at their “enemies” (real and imagined), suggest suicide to those with whom they disagree, and dwell on prisons and executions. Yeah, the “good guys”. I just hope you can give them a lot better than you did in the windy message I am replying to. Why didn’t you give them some ammunition right now? As far as I can see, you have answered not a single accusation. And YOU can’t come up with the name of a single company destroyed by naked shorting! Coy answers may satisfy you and your congregation, Hannibal, but they won’t satisfy anyone else. So, the next time you get into one of your fey moods and decide to stick something in my face (as you put it), trying sticking a few verifiable facts there, would you? Don’t bother to hand off the chore to the peanut gallery here, because I really don’t read most of them.

And the Cliff Notes version? Patrick Byrne yelling “there’s a conspiracy because I say so, but I’ll never provide evidence, even though I’ll say I have, and I’d rather just call names and stalk people.” Medchal pointing this out.

And no, I do not have anything to add to this discussion because it’s all been covered nicely already.