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Okay, now that I have the attention of people (or perhaps, just “person”) who can’t be bothered to go back to the original post, this blog’s purpose is to go over Mark Mitchell’s gargantuan showpiece one section at a time.  Last week’s post was about the 13th section of that work, and thus the star of that section was the feature topic here.  This week has nothing to do with him, so he will not be mentioned.  Simple enough?

So it’s now April 2004, and, to even Mitchell’s disbelief, Patrick Byrne is once again on Kudlow & Cramer.  Mitchell chalks it up to Byrne’s naiveté about how the financial markets work, a trait he continues to exhibit to this very day.

But for some reason, Mitchell decides that a transcription of the last fifteen seconds of the interview, when the show is running up against a fixed commercial break and the hosts are scrambling to sum up and maybe get one more answer from their guest, is the best way to represent how it went.

Indeed, one might actually suspect that Mitchell is attempting to make the reader believe that those last few seconds were how the entire interview went, with Byrne being pressed to finish every response in three seconds flat.  But of course, a prestigious journalist like Mitchell would never stoop to something so misleading as that, right?  Surely he would put those moments in context, right??

Well, no actually.  Just a transcription of those last fifteen seconds and no further comment.  No attempt to explain what is “confusing heck out of” either Kudlow or Cramer, whoever is speaking at the start of the transcription (Mitchell doesn’t say).

And even then, Mitchell’s transcript leaves out some of what Byrne said in those last few moments.  Blogger Tracy Coenen put the “I’m all about the GAAP remark” statement of Byrne’s that Mitchell quotes, into context in an entry a few months back, and noted what Mitchell carefully removed, remarks to the effect that anyone who reported EBITDA (Earnings Before Interest, Taxes, Depreciation and Amortization) numbers was “a crook”.  Which, as Coenen went on to note, was very… interesting in the context of what metrics Byrne’s company reported in later years.

So much for another short section.  Next week things get serious.  Mostly.



  1. Hey Underbond:

    The Sith Lord wants to extend his gratitude by awarding you a 10% off retail coupon towards the purchase of Sith Lord memorabilia at the next picnic on Thanksgiving Day.


    Sam E. Antar (miscreant Number 39 of 55)

    • Dave Patch
    • Posted October 7, 2008 at 2:14 pm
    • Permalink

    Sam, was e-mailed a post you put up on SI linking this latest story. Funny post. I like how you used the name “Underbond” when referring to the author instead of Kevin Podsiadlik. why is that?

    I find it most amusing in this time of market turmoil that this is the best you guys have to offer. Even the hedge funds are starting to whine about self-fulfilling prophecies of a demise now that their clients are pulling their own version of a run on the bank.

    Your man Joe Nocera wrote all about it this morning as he writes …“It becomes a self-fulfilling prophecy,” said one hedge fund manager. Firms fearing redemptions sell off stocks, which hurts their performance. Which undermines their investors’ confidence. Which means there are likely to be even more redemptions. Around and around it goes.

    And to think, Bear Stearns went down after having a run on teh bank as did Lehman. back then teh hedge funds were claiming their actions had nothing to do with the fall. Now Hedge funds big and small are talking about nehgative performance DIRECTLY related to the run on the funds due to rumors of poor performance.

    • Fred Allen
    • Posted October 7, 2008 at 2:24 pm
    • Permalink


    • Fred Allen
    • Posted October 7, 2008 at 2:25 pm
    • Permalink

    Ooops on cAPS kEY. lol

  2. Dave Patch:

    You claim:

    “Sam, was e-mailed a post you put up on SI linking this latest story.”

    Actually, I posted the link on SI.

    I was not emailed. I read the blog and posted the link on SI. You are a low quality shill for Patrick Byrne.

  3. Dave Patch:

    You claim that the SEC is trying to nail you. Are they still investigating you?

  4. “Ooops on cAPS kEY. lol”

    Kind of like Dave Patch’s looney rants.

    • dave patch
    • Posted October 9, 2008 at 2:07 am
    • Permalink

    Boy are you dumb Sam.

    If you read carefully it says I was e-mailed a post YOU put up LINKING this latest story. I don’t believe anywhere in this do I claim you were e-mailed a story. Then again, you are good at making up stories to fit your needs.

    Is the SEC still trying to nail me? Go ask them. I understand the OIG has found that those individuals supervising investigations are both “vindictive” and “retaliatory” and since I have been the most outspoken – and correct I might add – about their failed operations it would not surprise me.

    How do you like all that is going on Sam? The SEC is under investigation on multiple fronts (, abusive shorting is the talk of the town, and Wall Street is imploding. I think I called each one of those didn’t I. You on the other hand have only called accounting fraud on OSTK and guess what – the investigation was closed without cause for action. That puts me ahead 3-0.

    • Fred Allen
    • Posted October 9, 2008 at 3:18 am
    • Permalink

    Patch, you are so delusional!! And clueless…

    • Dave Patch
    • Posted October 9, 2008 at 12:25 pm
    • Permalink

    Fred, you come out with such intelligent posts.

    Chanos on CNBC This Morning: “The one thing I have in common with the CEO of, Patrick Byrne, who I’ve never met, is that we are calling for strict, strict rules on delivering shares.” Says the OMM was a “loophole you could drive an armored tank division through.” Says CPIC has called for end to all loopholes and no exceptions for delivery!

    Now I ask, is Chanos willing to have all trades he owns that resulted in an FTD bought in for guaranteed delivery?

    • Dave Patch
    • Posted October 9, 2008 at 12:27 pm
    • Permalink

    delusional —> the guys who are in denial regarding this issue and do not think that significant change is right around the corner.

  5. Dave Patch wrote:

    “Sam, was e-mailed a post you put up on SI linking this latest story.”

    Now Dave Patch claims:

    “I don’t believe anywhere in this do I claim you were e-mailed a story.”

    Dave Patch is not only a shill for whom CEO Patrick Byrne hired an attorney (that did not cost Dave Patch even a penny), Patch seems to have lost his grip on reality, too.

  6. Dave Patch writes:

    “Is the SEC still trying to nail me? Go ask them.”

    Actually, I am asking you. You made the charge so you need to respond. Why not back it up instead of ranting your allegations. Start here: Is the SEC investigating you or not? A simple “yes” or “no” answer would suffice. If your answer is yes, please provide details to back up your claim.

    • dave patch
    • Posted October 12, 2008 at 8:08 pm
    • Permalink

    Sam, you have lost it.

    Oh, as for short sellers distorting a market in a scheme of financial terrorism. Take a look at what short sellers were doing to Morgan stanley leading up to the short sale ban.

    On September 15, 2008 the number of short sales executed on Morgan Stanley more than tripled the average short sale volume of the previous 9 trading days as it spiked to over 7.6 million shares from an average of 2.5 million shares. The market closed down on the day over $5.00 closing at $32.19. September 16 witnessed another doubling in short volume to 15 million shares as the volatility in Morgan Stanley grew with a trading range of $23.00 – 32.00 closing at $28.00.

    September 17, 2008 witnessed a doubling again as 30 million shares were shorted on that day and the markets volatility increased as well with the days trading range spiking between $16.00 and $26.00/share closing at $21.00. And finally, September 18, 2008 volatility ranged from $11.70 to $24.72 before closing at $22.55. On that day the short sale volume was 21 million shares.

    This was what the SEC was witnessing and this is what they responded to.

    Now this is the real substance that should be discussed instead of your childish ploys and diversions.

  7. To Dave Patch:

    Can you respond to the lie by the mad doctor Patrick Byrne (CEO of detailed below?

    On December 11, 2001, during the Fox News show, “Your World with Neil Cavuto,” in response to questions from Brenda Buttner, Patrick Byrne claimed:

    “We’ve grown from $3,000 a month two years ago to $10 to $11 million this month [2001]. We’re profitable.”

    Brenda Buttner asked:

    “Your real honest-to-goodness profit, not pro forma?”

    Patrick Byrne responded:

    “None of that stuff.”

    Let’s review’s reported losses during fiscal year 2001:

    Q1 2001: Net Loss $3.3 million
    Q2 2001: Net Loss $3.8 million
    Q3 2001: Net loss $3.8 million
    Q4 2001: Net Loss $2.9 million
    Total: Net Loss $13.8 million

    Sam E. Antar (former Crazy Eddie CFO and a convicted felon)

    • dave patch
    • Posted October 13, 2008 at 12:29 am
    • Permalink

    Sam, I came to discuss the present and the best you got is to ask me to explain an interview taken nearly 7 years ago?

    I don’t work for Overstock but to take that comment at face value I would assume that in the month the statement was made they were profitable. You are looking at a three month snapshot. ‘this month’ they may have been profitable. Either way, not sure how that relates to today.

    Got any comments on the data I provided about Morgan Stanley in September of 2008? You know, the year we are in.

  8. Dave Patch:

    Let’s get closer to the present.

    23 April 2004 CNBC: Kudlow & Cramer:

    Mr. BYRNE: “Well, first of all, I’m all about GAAP. I have been so critical of the companies that do–I don’t believe in one-time charges; I don’t believe in EBITDA. If somebody talks EBITDA, put your hand on your wallet; they’re a crook.”

    Since Q2 2007, has been reporting EBITDA in reports filed with the SEC. Based on Patrick Byrne’s statement to CNBC, is he a “crook”? Should investors “put your hand on your wallet” when it comes to investing in


    Sam E. Antar (former Crazy Eddie CFO and a convicted felon)

    • Fred Allen
    • Posted October 13, 2008 at 4:02 am
    • Permalink

    Uhh, Patch. Did you write this paranoid, conpiracy-laden theory or did Bud? What a pair of whacktoids!!

    • Dave Patch
    • Posted October 13, 2008 at 4:18 pm
    • Permalink

    Press Release Announces Settlement of Claims Against Gradient Analytics and Its Principals

    All Attention Now on Copper River and Its Principals

    SALT LAKE CITY, Oct. 13 /PRNewswire-FirstCall/ —, Inc. (Nasdaq: OSTK) announced it has settled all claims against Gradient Analytics and its principals and officers named as defendants in Overstock’s defamation case filed in Marin County, California. chairman and CEO, Patrick Byrne said, “I am pleased to publish this statement from Gradient Analytics:

    Gradient issues this Statement concerning research reports previously

    published by it regarding, Inc. Having reviewed all SEC

    filings, relevant accounting literature, and all other information

    available to it, Gradient now believes that, to the best of its

    knowledge, Overstock’s stated accounting policies did in fact conform

    with Generally Accepted Accounting Principles (GAAP) and regrets any

    prior statements to the contrary.

    Some of Gradient’s prior reports asserted that certain Overstock

    directors — i.e., Allison Abraham, John Fisher and Gordon Macklin —

    were not independent directors according to Gradient’s criteria for

    evaluating independence. However, under NASD Rules, those directors were

    independent. Gradient extends its apology to the Macklin family for any

    remarks or observations concerning the suitability or independence of Mr.

    Gordon Macklin, who served with distinction as a past President of the

    NASD, was widely regarded as a pioneer in the financial industry, and,

    due to his expertise, was asked to serve on many corporate boards.

    Gradient has examined and improved its internal policies concerning how

    it communicates with clients, including hedge funds, and the media.

    Gradient acknowledges that former Executive Vice President of Research

    Matthew Kliber, a named defendant in this litigation, was not responsible

    for any of Gradient’s research on Overstock.

    Gradient regrets that the parties have been embroiled in litigation over

    its reports and looks forward to both sides’ moving forward with their

    respective businesses.

    Byrne added: “I wish Gradient Analytics the best in their future endeavors. will now focus on the remaining defendants, Copper River, David Rocker, and Mark Cohodes.”

    The details of the settlement reached today are confidential.

    What say you now Sammy?

  9. Dave Patch asks,”What say you now Sammy?”

    As detailed in my blog, has violated SEC Regulation G, its revenue accounting was not reported in compliance with GAAP as discovered by the SEC, and the company and certain members of its management has made false and misleading disclosures.

    Gradient’s statements about GAAP in its press release refers to issues in the litigation related to gross vs. net accounting for revenues that was questioned by Gradient in 2004-2005 and is unrelated to the issues I have written about.

    By the way Dave, you still have not answered by questions about Byrne’s comments on EBITDA.


    Sam E. Antar (former Crazy Eddie CFO and a covicted felon)

    • dave patch
    • Posted October 13, 2008 at 9:51 pm
    • Permalink

    I would say you are a piece of work. The SEC investigated Overstock, per your request, and found nothing. Gradient has now admitted that they have seen the documents and admit error. And you still seem to be on this personal vendetta. Is this how all convicted criminals act? Who pays you to keep up this charade?

  10. Dave Patch:

    The SEC investigated Gradient, too. Yet you and Patrick Byrne (who hired an attorney for you) disagreed with the SEC when they issued a no-action letter to Gradient.

    Can you respond to Patrick Byrne’s statements about EBITDA?


    Sam E. Antar (former Crazy Eddie CFO and a convicted felon)

  11. Dave Patch:

    Has the Sith Lord taken over Google?

    Google search: despicable behavior by ceo

    Google search: ceo deceptions

    Google search: regulation g violations

    Google search: Patrick Byrne


    Sam E. Antar (former Crazy Eddie CFO and a convicted felon)

  12. Joe Nocera Blog:

    Hell Freezes Over: Overstock Settles With Gradient!

    1. “Gradient now believes that, to the best if its knowledge, Overstock’s stated accounting policies did in fact conform with Generally Accepted Accounting Principles (GAAP), and regrets any prior statement to the contrary.”

    Well, of course Overstock’s stated principles conform to GAAP — every company’s stated principles conform to GAAP. The real question —unmentioned in this release — is whether Overstock abused GAAP in its financial disclosure documents, which was part of the focus of the Gradient reports. In other words, in its statement Gradient doesn’t not appear to be “regretting” anything it actually wrote about Overstock.

  13. Hey Dave Patch:

    You recall that Gradient settlment you used to in an effort to vindicate Patrick Byrne (who hired a lawyer for you)?

    From Zac Bissonnette blog:

    Here’s the best part: One of the imaginary demons that Patrick Byrne was out battling was Gradient Analytics, a small independent research outfit that Overstock sued for putting out negative research reports. Earlier this month, the lawsuit was settled. In that press release, Overstock said that “Gradient now believes that, to the best of its knowledge, Overstock’s stated accounting policies did in fact conform with Generally Accepted Accounting Principles (GAAP) and regrets any prior statements to the contrary.”

    Here’s my question: was Overstock aware of the need for an earnings restatement when it settled the lawsuit? Or did it push through a settlement just before it disclosed that Gradient’s allegations of accounting issues were proven to be right on the money? We may never know.

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