StockBeat: Overstock Rallies as CEO Quits Days After Delivering Confession
Investing.com - Chief executives and founders fall on their swords for any number of reasons, but the series of events that led Overstock.com (NASDAQ:OSTK) founder and chief executive Patrick Byrne to quit on Thursday may well be talked about for some time.
Byrne resigned from the e-commerce company, just a week after conceding in an interview with Fox News that he "assisted in what are now known as the Clinton investigation and the Russian investigation."
Byrne’s resignation set off a big rally in shares in Overstock.com (NASDAQ:OSTK). The cloud of conspiracy hanging over Bryne would likely prove a distraction for the company going forward. Shares were up more than 10% Thursday afternoon. But it had a wild ride just getting there.
Explaining his decision to quit in a letter to investors, Byrne said coming forward was "hardly my first choice," but felt that his presence could "affect and complicate all manner of business relationships, from insurability to strategic discussions regarding our retail business.”
He had admitted last week that he had been romantically involved with Maria Butina, the Russian operative who infiltrated American politics and is now serving an 18-month prison sentence for being an unregistered foreign operative. That news sent Overstock.com (NASDAQ:OSTK) Overstock shares plunging from the Aug. 9 close of $25.19 to as low as $15.46 over the next three days.
And he said he conducted his affair while informing on it to the FBI.
Byrne, who holds degrees from Dartmouth, Cambridge and Stanford, has been controversial in the past, deriding naked short sellers and others as he built up Overstock and, at the same time, becoming passionate about blockchains and crypto-currencies. Overstock began as an online retailer of surplus and returned merchandise. It does that and sells new merchandise as well.
Overstock's shares are actually up nearly 57% this year, but that was after plunging in 2018 from as high as $89 in the early part of the year.
Byrne's parting words also included some insight on the way forward for the company.
“The best thing to do for shareholder interest is to use cash flow to mature our blockchain keiretsu firms to fruition while we keep running our Retail business focusing on refining it as an exquisite gem of a technology platform, rather than again trying to go head-to-head with any firm in the process of dropping billions of dollars in losses,” Byrne said.
Overstock said it would appoint Jonathan Johnson, an Overstock board member and president of Overstock’s blockchain subsidiary Medici Ventures, as interim CEO.
The e-commerce company also said Kamelia Aryafar, the chief algorithms officer, would become executive vice president of Overstock's retail business.
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