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Overstock’s ex-CEO sells his $90M stake, says he’s worried about ‘Deep State’

libadmin September 19, 2019
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Patrick Byrne in 2007. (Steve C. Wilson/AP)
September 19 at 2:50 PM

Patrick Byrne, the firebrand founder of Overstock.com who abruptly quit as chief executive last month, has dumped his $90 million stake in the company.

Byrne sold off more than 4.7 million shares this week, according to a company filing, and said in a blog post that he will invest the proceeds in gold, silver and two cryptocurrencies to shield his fortune from “acts of retaliation from the Deep State.”

“I have been following the US economy and the deteriorating world situation, and I am growing worried,” Byrne wrote in an open letter to former colleagues Wednesday. His new investments, he said, would soar during “a recession (or even worse, if The Big One comes),” allowing him to provide cash to Overstock as necessary.

The 56-year-old, who used to be Overstock’s largest shareholder, set off a frenzy last month when he said he had been involved in multiple FBI investigations and had romanced Maria Butina — a Russian gun rights activist who is now serving 18 months in prison for trying to influence U.S. policy ahead of the 2016 election — allegedly at the behest of federal authorities. Shares of Overstock fell 36 percent in the days after Byrne’s comments, and he resigned a week later.

In an email to The Washington Post, Byrne — who said he was traveling in Asia — said he has cashed out of roughly $125 million worth of company shares in the past year.

He decided to sell off everything this week, he said in the blog post, after he got word that the Securities and Exchange Commission — “the Deep State’s pets” — was going to scuttle Overstock’s plans to pay its next shareholder dividend in a company-issued cryptocurrency.

Overstock said Wednesday it was postponing its plans while it sorts out regulatory logistics. A spokesman for the SEC declined to comment.

Selling off his stake, Byrne wrote, was also a way to protect the company from regulators who “would try to break Overstock as a way of crippling me.”

“With me no longer an executive, a board member, or even a shareholder, it becomes pointless for them to try to get at me that way,” he wrote. “There are other ways they will come for me, but there is no edge for them to come through Overstock to do it.”

Overstock shares have fallen nearly 40 percent in the past week. They were trading Thursday at about $16 a share, down from a peak of $84.35 in January 2018.

Overstock, founded 20 years ago as an online marketplace for excess merchandise, is best known for selling furniture, bedsheets and other home goods. In recent years, though, the company has shifted its focus from retail to new blockchain ventures.

Byrne also has become vocal about his alleged involvement with the FBI. In a company news release last month, he said that he had been working with the “Men in Black” on their investigation of Russian interference in the 2016 election and that his “Rabbi,” Warren Buffett, had advised him to tell the American people what he knew. (The FBI declined to comment.)

Byrne said that he had not wanted to come forward but that seeing “my country pull itself apart while I knew many answers” convinced him that it was time to speak out. This week, he doubled down on that promise.

“You think me controversial now, but you ain’t seen nothing yet,” Byrne wrote Wednesday. “I know enough to fry the Deep State to ashes.”

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