Northwest Arkansas Democrat-Gazette
Overstock CEO cites controversy, resigns
He quits after remarks rattled stock
SAN FRANCISCO — Patrick Byrne, CEO of Overstock.com for two decades, resigned Thursday saying he’d become “far too controversial” to helm the ecommerce company known for selling discounted sofas and jewelry.
Byrne, 56, tendered his resignation in a 1,600-word email statement to shareholders in which he vowed to disappear “for some time.”
The company had issued a bizarre statement last week in which Byrne referred to the “Deep State,” called federal agents “Men in Black” and confirmed a journalist’s stories detailing his relationship with Maria Butina, a gun-rights activist who was sentenced to prison for being an unregistered agent of Russia.
Overstock.com’s shares fell 36% in the two days after the statement was made public. The company’s shares jumped more than 10% Thursday and closed up 8.3%.
“Though patriotic Americans are writing me in support, my presence may affect and complicate all manner of business relationships, from insurability to strategic discussions regarding our retail business,” Byrne said Thursday.
Overstock.com based in Midvale, Utah, named company veteran and board member Jonathan E. Johnson III as interim CEO.
Overstock got its start in 1997 as an Internet marketplace for excess inventory. Byrne took it over in 1999 and turned it into an e-commerce giant that specializes in home goods, furniture and
decor. The company posted sales of $1.8 billion in 2018.
In his statement last week, Byrne said he had helped law enforcement on three occasions, the last being “less about law enforcement and more about political espionage conducted against Hillary Clinton and Donald Trump (and to a lesser degree, Marco Rubio and Ted Cruz).”
In his meandering letter to shareholders, Byrne said his rabbi had helped him realize he should speak publicly about his role in federal investigations.
Aspects of Byrne’s story remain fuzzy, but some of it can be fashioned from a New
York Times account of its interview with him, Overstock’s statements and articles published on the website of a Fox News contributor named Sara Carter, which Byrne “confirmed.”
In those, Byrne is depicted as becoming involved with Butina after they met in 2015. Butina is a self-styled Russian gun-rights activist who befriended senior officials from the National Rifle Association and Republican Party in the run-up to the 2016 election.
Byrne said he had met Butina at a libertarian convention in Las Vegas in 2015. Over the course of their relationship, he said, Butina spoke increasingly about meeting or seeking to meet people involved in the campaigns of Clinton, Trump and others. That, he said, had made him wary. He eventually began communicating with the FBI about his interactions with her.
Butina is serving an 18-month prison term after being accused by federal prosecutors of trying to infiltrate powerful political circles in the United States at the direction of the Russian government. She ultimately pleaded guilty to a lesser charge.
“If the hors d’oeuvre that was served recently caused the market such indigestion, it is not going to be in shareholder interest for me to be around if and when any main course is served,” Byrne wrote in his resignation letter.
“I wish all shareholders a smooth and level road,” he concluded. “And don’t forget to shop Overstock.com!”