Intellectual Gunslingers Running Amok…in Utah

Public shareholders of Overstock.com are in for a rude awakening. It seems their company was taken over by its very own President without so much as an SEC filing!

At least, that’s how I read the following introduction to a recent article in the Utah Statesman, the “official student newspaper” of Utah State University.

Jason Lindsey, creator and owner of Overstock.com and an innovator in the world of e-business, who graduated from USU in 1996 with bachelor’s and master’s degrees in business and accounting, revisited his alma mater to speak to a group of around 150 people about his business and the things he’s learned from it. Having once written for a student newspaper that I hesitate to name—not for reasons of confidentiality or bad feelings or anything like that, but because it was called, and I am not making this up, the “Brown & White” (worse, those were the team colors)—I sympathize with the article’s author for not getting the Overstock.com ownership structure straight.

As described here previously (“Blame it on the Ramones” from April 2005), complete and faithful accuracy is not necessarily a hallmark of student newspapers, no thanks to yours truly.

While the Utah Statesmen writer clearly does not grasp the significant difference between public and private ownership, my guess is the responsibility for the misunderstanding rests not with her but with the subject of the article, who perhaps did not make it clear that Overstock.com is in fact a public company owned by the shareholders.

Not by “founder and owner” Jason Lindsey’s own personal LLC.

But that’s beside the point. The point being the very first life-lesson Lindsey shared with the audience, which is, as described in the article, as follows:

“Choose integrity,” Lindsey said of his first lesson. “It’s what makes societies and relationships work.

Now, “choose integrity” is quite the noble sentiment.

However, Lindsey apparently never bothered to inform the good students at Utah State about the antics of his business partner, Overstock.com CEO Patrick Byrne.

Byrne, as long-time readers know, has publicly mused about the evil doings of, and I quote, “Israeli mobsters,” “crooked” reporters, SEC “lapdogs” and other “tools of Satan” that are all part of purported a short-selling conspiracy against his company.

I make none of those up, nor the following:

“The mastermind is a name your readers would recognize who’s been to prison before. He organizes bear raids on companies. He works through a group of four to five hedge funds….The hedge funds have half a dozen reporters on their payroll….The reporters are condoms used and discarded by them.”

“Integrity” is not quite the noun coming to mind just now.

But perhaps Mr. Lindsey doesn’t grasp much in the way of nuance, for his very next sentence reveals the thin intellectual curtain draped behind his “choose integrity” theme:

“The reason people aren’t rushing to the Middle East and investing in the infrastructure of these countries we’re in is because there’s no rule of law. There’s no way to know someone with a machine gun will come and take away what you build there. Or the government, for that matter.” In fact, not only are people rushing to the Middle East and investing in the infrastructure, but entire companies—Halliburton, for example—are moving there in order to participate in the very infrastructure boom Mr. Lindsey seems not to know exists.

Still, if he doesn’t know what’s going on in his own back yard, how’s he supposed to know what’s going on half way around the world?

Jeff Matthews I Am Not Making This Up

© 2007 NotMakingThisUp, LLC

The content contained in this blog represents the opinions of Mr. Matthews. Mr. Matthews also acts as an advisor and clients advised by Mr. Matthews may hold either long or short positions in securities of various companies discussed in the blog based upon Mr. Matthews’ recommendations. This commentary in no way constitutes a solicitation of business or investment advice. It is intended solely for the entertainment of the reader, and the author.