Posts filed under “Really, really bad calls”
Our story so far:
Back on December 9th, my young niece informed me (via Facebook) that she had discovered her name publicly posted on a DeepCapture website.
That was the first discovery of the “Facebook Friends scraping” operation.
My assumption was that the asshats at DeepCapture had exploited a Facebook security lapse, and grabbed all of the friends and family of any one who had the temerity to so much as discuss this 3rd rate retailer, Overstock.com. (See DeepCapture.com Scraping Facebook Friends).
The reality turned out to be far more insidious than that: A career douche bag (and possible pedarast) named Judd Bagley decided to engage in some fraudulent pretexting. He assumed a false persona on Facebook, using someone else’s name and photo (perhaps committing a Felony in NYS). He then began cyber-stalking the children, friends and family of numerous journalists, bloggers and fund mangers. After friending all the kiddies, Bagley posted their names, friends, etc. at the Deep Capture site.
At that point, I had seen enough. I spoke to my lawyer (more on this later), then I put up a post titled Boycott Overstock.com. (Note that legal counsel is only allowing me to reference items already published publicly. There are other things I am not at liberty to discuss — yet)
One would think that the CEO of an online retailer might have enough common sense not to piss off the blogosphere before the Christmas shopping season. That assumes all retail CEOs are not functional idiots; As it turns out, what appears to be the case for only most retail CEOs.
Our story continues: Soon thereafter, a modest article appeared in the NY Observer about the pretexter/possible pederast. It was to my eyes, way too generous considering the sleazoid subject of the article, who, in addition to stalking children online, is a probable sociopath (look it up — the shoe fits).
The fun never stops: Today in The Big Money, former Fortune writer Roddy Boyd delivers a brutal smackdown on the clueless CEO who has ran Overstock.com into the ground: Titled America’s Nastiest CEO, it is about a Overstock.com executive Patrick Byrne.
Rather than excerpt it, I can briefly sumarize: Overstock has engaged in a variety of actions and inactions that are likely to subject it to various future civil, regulatory and tax proceedings in various courts. The heart of the article reflects a tax scam run by the firm to avoid paying New York State retail sales taxes. I would expect the New York and/or the SEC to use Boyd’s article as a road map for any prosecution. It is clear upon first reading this article that not only is this a disastrous retail operation, but it is run by a deeply disturbed individual who seems to have never tripped across “The Truth” even by accident.
But you have yet to hear the most amusing part: Gary Weiss points out that the trading in Overstock today reflects some frantic sellers in advance of this brutal article. Someone appears to have known that bad news was coming, and they dumped plenty of shares.Its something else for the SEC to investigate — whether or not insiders at Ovestock dumped shares, or warned others to do the same.
Here is a bit of irony: On paper, you might be led to think that Byrne is a bright guy — undergrad at Dartmouth, a Ph.D. in philosophy from Stanford, a Marshall scholar. It just goes to show you that having book smarts, being people savvy and possessing common sense can all be mutually exclusive.
The whole sordid tale of Overstock.com has one rule of thumb here that investors should learn for their own benefit: Anytime a CEO complains about short sellers, run dont walk to the nearest exit.
America’s Nastiest CEO
Think business journalists are too timid? Look what happens when you go after a struggling firm.
By Roddy Boyd
The Big Money, January 19, 2010 – 4:31pm
“The debate about the CPI was really a political debate about how, and by how much, to cut real entitlements.” -Greg Mankiw, chairman of George W. Bush’s Council of Economic Advisers from 2001-2003 > I’ve been meaning to get to the absurd argument put forth last week by Michael J. Boskin in the WSJ, titled…Read More
Frederick Sheehan is the co-author of Greenspan’s Bubbles: The Age of Ignorance at the Federal Reserve. His new book, Panderer for Power: The True Story of How Alan Greenspan Enriched Wall Street and Left a Legacy of Recession, was published by McGraw-Hill in November 2009. He was Director of Asset Allocation Services at John Hancock…Read More
I have to call foul on a surprisingly foolish article in today’s NYT. Less than a month into 2010, it is already a leading candidate for the dumbest article of the year. It reads like it was written by the PR firm for a group of VCs and Palo Alto law firms.
There were numerous ignorant comments in the article, but this is the one that actually made me laugh out loud:
“Newer restrictions, like those on executive compensation, have made I.P.O.’s even less attractive to some entrepreneurs, said Doug Collom, a partner at Wilson Sonsini Goodrich & Rosati, a Silicon Valley law firm. “Lawyers now have a profound significance in the boardroom,” he said.”
WTF is this idiot talking about? Last I checked, none of the Silicon Valley tech firms had received TARP money during the bailouts. The exec comp restrictions this dimwitted Wilson Sonsini lawyer mentioned came with the nearly trillion dollar taxpayer bailout/subsidy for insolvent banks and the incompetent execs who ran them into the ground — not dot com start ups.
What a tool.
I cannot figure out who is more responsible for this brain dead exercise in ignorance and spin — the writer who (re)typed it from a press release, or the editor who let this nonsense slide by.
Here’s some more stupidity:
“In the last two years, only 18 tech start-ups have gone public, compared with 143 in the two years prior. The Sarbanes-Oxley Act of 2002, which tightened corporate governance and accounting rules, has taken a lot of the blame.”
Astonishingly, the article fails to note the massive decrease in IPOs across all sectors due to the recent turmoil. Even more amazingly, the author somehow fails to deploy so much as one single word regarding the total collapse in the markets, or the simple fact that investors have seen precisely zero gains over the past 11 years.
Quite bluntly, I am embarrassed that this is what passes for Journalism today.
UPDATE: January 18, 2010 3:02pm
Here is a chart of IPOs going back about 3 decades. Note after the 1987 and 2000 and 2008 crashes, the IPO numbers plummeted. I do not know what the actual impact of Sarbanes Oxeley was on IPOs, but the data shows that after SARBOX passed, the number of new IPOs actually went up.
I am NOT suggesting there is a correlation between SARBOX and any subsequent increase in IPOs; I am merely pointing out that blatherings of those mentioned above is factually incorrect, and belied by actual data.
Have a look at these two charts, courtesy of Jim Bianco. They show the number, and the dollar amount raised in IPOs; There appears to be no correlation with SARBOX, but a huge correlation with market crashes.
IPOs by Deal Volume 1991-2010
IPOs by Dollars (billions) 1991-2010
More charts after the jump.
For Many Start-Ups, a Spot on the Nasdaq Is No Longer the Goal
CLAIRE CAIN MILLER
NYT, January 17, 2010
Excel Spreadsheet for IPOs anbd secondaries, Bianco Research
Equity IPO And Secondary
Some Factoids about the 2009 IPO Market
Jay R. Ritter, Cordell Professor of Finance
University of Florida, Jan. 14, 2010
In today’s Barron’s, Mike Santoli very politely and quietly, using language suitable for a family dinner, calls Charles Biderman out for his clueless commentary about secret government cabals: “One conspiracy theory gaining undeserved traction on Wall Street lately holds that the Federal Reserve or another government entity might — or must — have been a…Read More
My publisher writes: Anyhow, I have a favor—Ben Stein has written a book for us, Little Book of Investing Dos & Don’ts — I’m wondering if I sent you some chapters you could write a sentence or two for the back jacket… I told them to read my prior Ben Stein posts: Farewell To Ben…Read More
Category: Really, really bad calls
There’s been a lot of chatter lately about secret cabals and the plunge protection team. I notice it seems to be coming primarily from those folks who missed the rally off of the lows. Rather than admit their errors, they are rationalizing them with discussions of secret government equity buyers. I addressed the PPT in…Read More
This is simply infuriating: “The Federal Reserve Bank of New York, then led by Timothy Geithner, told American International Group Inc. to withhold details from the public about the bailed-out insurer’s payments to banks during the depths of the financial crisis, e-mails between the company and its regulator show. AIG said in a draft of…Read More
In a post yesterday, my west coast pal Paul discusses how the Chicago School of Economics Circling the Theoretical Drain: “In the current issue of the New Yorker there is an alternatively depressing and fascinating piece (Letter from Chicago) by John Cassidy about how the Chicago School of economics – monetarism, rational expectations, efficient market…Read More
One of the memes I’ve heard recently in the climate debate is that there is no scientific consensus — that there is actually strong disagreement. The main basis of this argument is that 31,486 dissenting scientists have signed a petition against the belief that Global Warming is man made at the PetitionProject.org. I don’t want…Read More