Overstock chief Byrne resigns after Russian probe link
By Arjun Panchadar | Reuters
Overstock.com’s stock surged 5% on Thursday after Chief Executive Officer Patrick Byrne resigned following his claim of being involved in a Federal Bureau of Investigation probe into Russia and former U.S. presidential candidate Hillary Clinton.
His resignation follows a drop of over 30% in the online retailer’s shares over two days earlier this month, with investors rattled after Byrne claimed in a statement that he had secretly been involved with the FBI, starting in 2015.
The stock briefly surged 15% after the announcement of Byrne’s resignation.
“While I believe that I did what was necessary for the good of the country, for the good of the firm, I am in the sad position of having to sever ties with Overstock, both as CEO and board member,” Byrne said in a resignation letter addressed to shareholders on Thursday.
“It has been an honor to serve you through thick and thin, threats grand and arcane, for the past 20 years.”
A libertarian with a doctorate in philosophy from Stanford University, Byrne for over a decade has publicly battled short sellers targeting his company as it competes against larger rivals, including Amazon.com Inc and eBay Inc. He is known for making brash and freewheeling comments.
According to a report in the New York Times, Byrne admitted he had had a three-year relationship with now-jailed Russian spy Maria Butina that eventually became romantic.
On Thursday, he lauded the remaining Overstock executive team with pop culture references, calling the chief marketing officer “Commander Data,” after a Star Trek character. He said another executive called an artificial intelligence system “Skynet,” after the Terminator movie series.
In a separate statement, Overstock said it appointed company veteran Jonathan Johnson as interim CEO.
Overstock is currently more targeted by short sellers than 99% of U.S. companies, according to Refinitiv. Total short bets against Overstock stand at $267 million, equivalent to almost 50% of its float, according to S3 Partners, a financial analytics firm.
Byrne is also a vocal proponent of blockchain technology and cryptocurrency.
In May, he lashed out at investors who questioned the motivation behind his sale of about 15% of his Overstock shares, saying he had to supplement his $100,000 a year salary and vowing never to “give such an explanation again.”
The stock has fallen more than 70% from record highs in January 2018, when Overstock was benefiting from Byrne’s plan to launch a digital token, and from hype around Bitcoin.
“On any normal day, my presence is not conducive to strategic discussions regarding our retail business. I believe that going forward my presence will definitely not be conducive to such strategic discussions,” Byrne wrote in his resignation letter.