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Overstock Insiders Revolt After Crypto-Crazed CEO Dumps 900,000 Shares

Last Updated September 23, 2020 12:43 PM
P. H. Madore
Last Updated September 23, 2020 12:43 PM

By CCN.com: Overstock CEO and crypto enthusiast Patrick Byrne felt the need to defend his sale of about 900,000 shares of company stock. Byrne wrote a letter defending his decision, as news of his choice had reportedly sent insiders into a tizzy and dropped O shares about 16% earlier in the week.

Overstock Stock Price Recovers After Mid-Week Slump

overstock stock price
Overstock shares faced significant downward pressure after Patrick Byrne revealed that he had sold 900,000 shares of stock. | Source: Yahoo Finance

Byrne explained in a public letter that he was investing in blockchain projects alongside Overstock and that he needed the money to keep his commitments, including to charity.

While there is a definitive correlation with the news and the change in price, it’s notable that the market has been incredibly volatile on the whole lately.

This is not the first time the CEO’s stock sales have made headlines. He assured investors all was well when he sold $20 million worth last year . Byrne spends a portion of the letter explaining that he could not sell for most of the past year due to having information that would have made it unethical to do so.

Miffed at people questioning his right to sell the stock, Byrne said he does not intend to defend himself again.

“I owe shareholders staying within the law and not making decisions based on inside information, not explanations of my life and projects outside Overstock,” he wrote.

$350+ Million Company, $100,000 CEO Salary

Patrick Byrne Overstock crypto blockchain
Patrick Byrne defended his stock sale, noting that his $100,000 salary ranks among the lowest compensation packages for a company of Overstock’s size. | Source: YouTube

Byrne said that he needs money to supplement his $100,000 annual salary and invest in several blockchain projects. His salary ranks among the lowest compensation packages for a company on the order of Overstock, valued at over $360 million even after the recent decline.

“A year ago, I told shareholders that I would be making significant sales to fund a variety of projects. Since then I have invested $12.5 million in blockchain projects, approximately 2/3 of that directly alongside your company’s investments (thus, I am not only not running from eating my own cooking, I have been asking for a double helping of it). I have donated and pledged to donate approximately $50 million to charity[…]

“As we recently discussed in our Q1 2019 earnings call and shareholders meeting that occurred the same day, the quicker-than-expected rebound towards profitability of our top-of-class e-commerce machine coupled with our Medici Ventures keiretsu companies bringing world-changing products to market has me as optimistic as ever about the future. I simply had to supplement my nominal salary with stock sales in order to fulfill personal commitments to invest personally in blockchain projects such as Medici Land Governance, along with a need to meet charitable pledges such as those outlined above.”

Overstock previously announced that it would sell its retail business to focus on blockchain ventures, though it appears to have walked back those plans.

Overstock’s Complicated Relationship With The World At Large

One of the first major retailers to accept cryptocurrency, with a CEO who actively supports crypto, Overstock played the crypto boom of 2017 exceptionally well. Just like the rest of the crypto-oriented market, however, the company’s shares have fallen over 80% since their height in January 2018.

Investors responded with enthusiasm when Byrne announced the company would be moving heavier into blockchain, but things have moved relatively slowly for crypto-focused subsidiary Medici Ventures. Shares dropped when the company revealed it was included in an SEC probe into crypto-related companies .

Reportedly, Overstock also has a long and complicated relationship with the world at large.

Take, for example, this post from 2005, which details a supply-chain in a state of chaos and flux.  Then five years later, this NY Observer writer  outlined a rather unpleasant experience with criticizing the firm .