There He Goes Again

He’s everywhere!

He’s on Fox Business News parsing the Friday unemployment numbers with Rebecca and the Happy Hour crew!

He’s in Success Magazine giving tips on, well, success!

He’s in the Salt Lake Tribune dissing corporate spin doctors!

The “He” is none other than Patrick Byrne—Doctor Patrick Byrne, we should say—the CEO of a public company called Overstock.com that recently reported a decline in first quarter revenues and a loss.

Now, declining revenues and net losses are nothing out of the ordinary in Corporate America these days—what the recession and all. Still, a tough environment should be right in Overstock.com’s wheelhouse, with plenty of “overstocked” merchandise looking for a home, and millions of downsized consumers looking for a deal.

Oddly enough, however, Overstock.com seems unable to take advantage of the same environment that is providing record sales and earnings for close-out or low-priced merchants such as Ross Stores and Family Dollar, not to mention Internet giants like Amazon.com.

Still, that isn’t stopping the company’s voluble CEO from offering his opinions on everything from the better-than-expected unemployment report last Friday (Inflated by statistical adjustments, opined the Doctor) to the key to successful entrepreneurship (Are you sitting down? It is this: “find a need and fill it”).

As for corporate spin-doctoring, Byrne had this to say:

Overstock.com CEO Patrick Byrne suggests that rather than trying to influence the market through the timing of earnings releases, some companies use the content of their announcements to paint an overly positive picture of the results.

“They’ll use all kinds of corporate pap to try and put a positive spin on their results,” he said. “They might talk about their pro-forma results and only later in the release reveal their actual results.”—Salt Lake Tribune, June 6, 2009 This from a CEO whose company that regularly reports “Adjusted EBITDA” along with “operating profit (loss)” and “net income (loss).” Possibly because, generally speaking, Adjusted EBITDA tends to be one of the few positive below-the-line numbers in the press release.

This from a CEO who once proclaimed that his company had “passed through the tipping point,” and thus “we can crush” expectations, and “we are really on a roll here.” Unfortunately that was early in 2005, which would turn out to be another money-losing year for Overstock.com (and 2006 would not turn out any better: Byrne would later call it “a wipe-out year”).

This from a CEO who once crowed that his company was “competitive with Blue Nile,” the well-run online engagement ring retailer, saying “we intend to dominate in the $1,000 to $5,000 range” of diamond engagement rings—something his company never came remotely close to doing.

And this from a CEO who, during that “wipe-out year” of 2006 explained an operating glitch as follows:

It’s funny that you ask that. We actually have a truck full of important parts trucking in through — coming in from L.A. through southern Utah, ran into a cow and tipped over the cab, and that actually, literally, has stopped the project for two weeks. But short of any more cows on the interstate, I don’t see how that gets delayed. That’s just bolting things together. For “pap” and “positive spin,” it doesn’t get much better—or more worse, depending on your point of view—than that.

Jeff Matthews I Am Not Making This Up © 2009 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 investment advice. It should never be relied on in making an investment decision, ever. Nor are these comments meant to be a solicitation of business in any way: such inquiries will not be responded to. This content is intended solely for the entertainment of the reader, and the author.