Overstock Chairman Chooses Son Over Company

Discussion
Mar 03, 2006
George Anderson

By George Anderson


The chairman of Overstock.com, John “Jack” Byrne, says that, if he steps down from his post after the annual shareholders’ meeting this April, it will be because he’d rather keep his relationship with his headstrong son than become a board chairman elsewhere.


The son in question is Overstock.com’s CEO Patrick Byrne and, as his father told The Wall Street Journal, he’s not sure the younger Byrne is making the best use of his time pursuing what he calls a “jihad” against short sellers.


In August, Overstock.com filed a lawsuit against the Rocker Partners hedge fund and the research firm of Gradient Analytics. The suit alleges the two companies conspired together to publish negative analyses of Overstock.com’s business.


Moderator’s Comment: Do you think that Patrick Byrnes self-described “jihad” against short-sellers is taking his focus off of running the company? What
is your assessment of the Overstock.com business?

George Anderson – Moderator

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5 Comments on "Overstock Chairman Chooses Son Over Company"


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Jim Leichenko
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Jim Leichenko
15 years 23 hours ago

By recent media and analyst accounts, Overstock.com has far bigger problems than short-selling. Namely, their warehouse operations and customer service have seen a precipitous drop in quality in the last year. Customer complaints detail situations where they either aren’t receiving merchandise at all or are receiving only partial shipments and then having months of frustration trying to get Overstock.com customer service reps to rectify the problem.

One account suggested that the problem is limited to their media warehouses in the Southeast (where CDs and books are shipped), which were severely affected by the hurricanes this fall. However, a Dec. 05 article in the British online publication, The Register, detailed the reporter’s similar firsthand experience with an electronics purchase. If this continues, it spells a dire situation for any retailer. Overstock.com needs to concentrate on restoring its operations and service to its previous excellent level, which, along with its low prices and great TV commercials, helped make it a household name. The lawsuits are an unnecessary distraction from Overstock.com’s core business.

Michael L. Howatt
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Michael L. Howatt
15 years 23 hours ago

My take is the we either have a “Son knows best” twist where the father is giving way to the more aggressive businessman, or a son who has just bitten off the Silver Spoon. Either way, Jack doesn’t seem to be pushing back so it can’t be hurting the business.

Don Delzell
Guest
Don Delzell
15 years 23 hours ago
As a practice, in coaching executives and predominantly, entrepreneurs, I challenge them to look at their time and energy as their greatest asset. It often is. Invest it, don’t waste it. Be “intentional” around the use of that time, spending it with a clear understanding of the ROI. My belief is that being CEO of any company of any size involves almost 100% “intentionality” behind all actions and behaviors taken within the context of the business. Much of the culture flows outward from that core individual, either in support of him or her, or in opposition. It is possible that shareholder equity, the long term strategic health of the company, and its ability to compete effectively in the marketplace are enhanced by this “jihad” against short sellers. I really do not know. As a consultant to the company (which I am not) I would certainly question that assumption deeply. Patrick Byrne adds unique and irreplaceable energy, skills and presence to his company. Any time and attention spent in a low value area is potentially a… Read more »
Mike Muoio
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Mike Muoio
15 years 23 hours ago

This is a futile struggle waged by a guy who has lost his way. Shorts are part of the market and always will be. Maturity for a CEO is defined in how issues like these are handled.

The CEO at the big “O” has some learning on the agenda or perhaps an exit.

Mark Lilien
Guest
14 years 11 months ago

Short sellers wouldn’t be short sellers if the entire management and the board focused 100% of its time and vision on improving the company’s financials. Companies with great financials have enthusiastic investors not enthusiastic short sellers. The most satisfying revenge against short sellers? Improve the financials so the stock price rises and the shorts lose their shorts.

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