More on the Accounting Shenanigans


Patrick Byrne Overstock Accounting IrregularitiesThis year, Patrick Byrne and company have taken a liking to discussing the (NASDAQ: OSTK) financials using non-GAAP measures. This means that they present certain financial figures that are not computed in accordance with GAAP (accounting rules).

Who cares? As long as they disclose that they’re non-GAAP measures, it doesn’t matter, right? Wrong. You see, companies use non-GAAP measures for one of two things: Continue reading

Update on Mark Shurtleff’s Comments From Sam Antar’s Blog


Sam Antar posted this on his blog today regarding Mark Shurtleff’s letter about Sam. He says he just received notification from TODAY that there was a comment waiting for approval by him. I reiterate my earlier concern: Why didn’t Shurtleff contact him directly via phone or email?

Blog Update Note (11/15/07): I received the following request from Utah Attorney General Mark Shurtleff to post a comment on my blog today. In a letter addressed to “to whom it may concern,” dated November 8, 2007, written by Mark Shurtleff, Utah Attorney General, and released by through a press release on November 14, 2007, he claimed: Continue reading

Sam Antar v. Patrick Byrne of


Overstock Patrick BryneThe regular readers of this blog are familiar with the issues at The company can’t turn a profit to save its life, but CEO Patrick Byrne blames that on short sellers. The fact is that the financial statements have some curious things in them, but Byrne never gets around to actually straightening out all the discrepancies.

This week Sam Antar offered Byrne an opportunity to do just that… explain discrepancies and answer questions.

You see, Patrick Byrne thought he was being cute during last week’s earnings call when he said:

Sam Antar, if you want to join us as an [inter-locketer], I have to stick around — I have to leave in 15 minutes but I’m hoping you’ll join, Sam.

This is none other than the Patrick Byrne who believes a Sith Lord is masterminding a conspiracy that is causing to be a horrible company. The same Patrick Byrne whose underlings threaten teenage bloggers. The same Patrick Byrne who is so interested in his job that he’s busy playing on the internet while he’s supposed to be paying attention to an earnings conference call for investors. The same Patrick Byrne who posts messages about on discussion boards without disclosing that he is the CEO of the company he’s hyping. The same Patrick Byrne whose financial statements hint to the possibility of earnings management. Continue reading

Sam Antar dishes out some free advice on staying out of prison


In today’s post entitled Advice from a convicted felon: How the government investigates and prosecutes white collar criminal cases, Sam Antar gives us an education on how the federal government goes after the “fish” in a criminal case.

And Sam should know. After all, he’s the former CFO of Crazy Eddie and has years of experience related to government criminal investigations. He refers to the big fish (someone like the CEO or President or majority owner of the company), the middle fish (middle management) and the small fish (non-management employees). Continue reading Cooking the Books?


This is Sam Antar’s final installment in his three part series on all the “unusual” things showing up in Overstock’s financial statements. Unusual because they don’t align with multiple statements made by CEO Patrick Byrne in a variety of interviews and earnings calls.

The bottom line is this: Byrne and Overstock management have made statements about their inventory that cannot possibly all be true. They are in conflict and cannot coexist, therefore at least some of the statements must be false. Continue reading and its phony earnings figures


Patrick Byrne, CEO of O.coToday on the White Collar Fraud Blog, Sam Antar has the first part of a three part series on the inventory numbers at It’s curious how Overstock’s inventory numbers always seem to create more questions than they answer.

Sam has some insight into this. As the former CFO of Crazy Eddie, a company that eventually folded after a massive fraud was uncovered, he says that one of the keys to perpetrating the fraud for as long as they did was deflecting attention away from suspicious items. Always put the focus back on the positive; keep everyone looking away from the negative.

In that vein, Overstock’s CEO Patrick Byrne (who is the target of a federal investigation) seems adept at doing exactly that. Unless, of course, a fraud investigator or investigative reporter is looking at his numbers. Continue reading

The house of cards


Quite a lot happened this past week at Is the house of cards finally falling down?

Some think so. Gary Weiss even wrote a blog post entitled “Will the Last Director Please Turn Out the Lights.” And Sam Antar is wondering why people are distancing themselves from CEO Patrick Byrne.

The directors are dropping. It’s always a bad sign when one’s daddy is the first to resign from the Board of Directors, don’t you think? The stated reason for the departure of John J. Byrne was:

On July 31, 2006, John J. Byrne announced his retirement from the Board of Directors of the Company due to his new role as Chairman of White Mountains Insurance Group. The resignation did not result from a disagreement with the Company on any matter relating to the Company.s operations, policies or practices.

It is interesting that the resignation supposedly has nothing to do with disagreements, but in an interview with CNet News a few months earlier, Patrick admitted that he and his father disagreed about his “jihad against short sellers”: Continue reading

Why the Overstock Inventory Issue Matters


It has been suggested that discussing the inventory issues at is a waste of time. Surely there is more interesting stuff going on. like Sith Lords and such.

So I’ll explain why it’s so important.

Inventory is a financial statement line item that is notorious for being abused. Some companies are loath to record proper reserves, and so inventory may be on the balance sheet at too high a value. On the other hand, when a company has a really good quarter, it may be tempting to overstate the reserve to create a little “cookie jar” for later. (The idea is that we recognize additional expense in this good quarter, since we still have “room” for more expenses. Then during a later quarter when numbers aren’t as good, we can dip into that reserve to pump up the earnings.) Continue reading