Does Patrick Byrne really follow Overstock?
Filed under: Management, Scandals
Overstock.com (NASDAQ: OSTK)'s stock tumbled more than 41% on Friday after the company reported its second quarter earnings. But investors looking for an indication of how things are going at the Utah company got a pretty eye-opening look on the company's conference call.Chairman and CEO Patrick Byrne's answers to questions -- and his repeated pleas to CFO David Chidester for help and Chidester's corrections to Byrne's numbers -- demonstrate a CEO who simply isn't on top of the operations of his company as he devotes countless hours to lashing out at critics and spouting conspiracy theories.
Take a look at these examples from the conference call -- quotes taken from the Seeking Alpha transcript:Matt Schimler - Merrill Lynch: Also, what percentage then of your direct business is reselling returns?
Patrick Byrne: Got to be about a quarter of it. Isn't it Dave?
David Chidester: I don't think it's quite that high.
Byrne: What is our direct business showing up on a GAAP basis, David, as a percentage of sales?
Chidester: It's about 21%. That's right: the chairman and CEO of a publicly-traded internet retailer doesn't know what percentage of its sales come from the direct business. Can you imagine Steve Jobs' having to ask the CFO what percentage of sales come from the iPod?
Given that Byrne is obviously not to up on the company's fundamentals, you have to wonder about whether his predictions of profitability can be trusted.Permalink | Email this | Comments