Patrick Byrne, the former CEO of Overstock who resigned abruptly in August, has dumped his 13 percent stake in the e-commerce company he founded 20 years ago to buy cryptocurrency and precious metals, he announced late yesterday.
In a blog post at his DeepCapture.com, Byrne said that, by the end of the week, he will have reinvested all of the proceeds into “investments that are counter-cyclical to the economy.”
“Gold, silver and two flavors of crypto,” he wrote.
A longtime proponent of cryptocurrency — Overstock was one of the first companies to accept crypto payments, launched the tZERO security token trading platform and acquired the company behind Ravencoin — Byrne was ahead of the curve, but perhaps too much so, as the external pressures against him compelled his resignation from the company last month.
Byrne’s final gambit – a crypto dividend approved in July – worked to lift Overstock’s share price to a 52-week high last week, but the value of the shares fell by half as his plan unraveled.
Yesterday, after the market closed, Byrne filed a statement with the Securities and Exchange Commission (SEC) that he had sold 4.7 million Overstock shares worth nearly $100 million. The transactions were over the previous three trading sessions, as the stock price fell from a high of $29.38 on Friday to $15.65 today.
Byrne’s blog post followed a statement from Overstock, announcing a halt to the crypto dividend policy after a New York Post report detailed the behind-the-scenes maneuvering – due to what Byrne described in his post as a leak from “the Deep State’s pets at the SEC.”
“They leaked that they were going to Bazoomba our digital dividend,” he wrote.
The November dividend was to be paid out as a digital security listed on tZERO. The dividend was actually a digital rights issue that would grant one digital voting series A-1 preferred stock, representing 10 shares of common stock, or 10 shares of voting series B preferred stock, that could only be traded through a Dinosaur Financial Group brokerage account and that only after being held for a six-month waiting period.
Overstock told the SEC in the filing that a new crypto dividend would be announced shortly that would exclude the long holding period and other restrictions to allow the digital rights to be traded freely and immediately.
The “leak” to the New York Post revealed that the crypto dividend was conceived by Byrne as a means to squeeze Overstock’s short sellers, who he knew would reject its complications and wind-up their positions.
The plan actually worked as Overstock’s share price surged. That is, until Byrne’s own sell-off began this week, as the Post reported that brokers at JPMorgan and Morgan Stanley were rescuing Overstock’s short sellers, offering them dollars at an equivalent value to the blockchain-based stock.
In the blog post, Byrne wrote that when word reached him of Wall Street banks stepping in to stymie his short of the shortsellers, he moved into action.
“Once that started getting back to me, I realized this: Whenever I have had any question about whether the SEC would or would not do something totally outrageous in order to hurt our company to benefit their clients on Wall Street, they never let me down: they always did the evil thing. So, Pettway decided it was time to eject, especially because he knows I need the ammo to go to war against the Deep State.”
Byrne said that he would buy Overstock shares again if the company were to bottom out in a coming economic crash, while his move into crypto assets would grow his assets under those conditions.
“You will have a friend who has sunk (almost) his entire fortune into investments that will soar if a crisis occurs.”
In the meantime, he said his net worth and “ammo” would be more secure on the blockchain, far from the reach of his enemies.
“The crypto is stored in the place where all crypto is stored: in mathematical mist, behind long keys held only in the memory of someone who is quite good at storing such things in memory (with paper backups in the hands of a priest I met 35 years ago who never sits [sic] foot in the West).”
“The other thing accomplished by the investment moves I described above is that my ammunition gets moved outside acts of retaliation from the Deep State. That is important because, in fact, I am now going to shellac them. Actually, ‘shellac’ is too weak a word for what I intend to do to the Deep State. Sit back and enjoy the show.”
The gallivanting, roguish, 6’8” executive resigned from Overstock last month after admitting to his affair with the Russian spy Maria Butina, in an attempt to avoid dragging the company further into the personal scandal.
Butina, who is now in jail for “conspiracy to act as an agent for a foreign government,” entered the US with a student visa to attend a dinner party in New York City hosted by Rockefeller heir George O’Neill for his Center of National Interest think tank that tries to bring the US and Russia together. In addition to the Rockefeller scion, her case ensnared the former head of the National Rifle Association and a gunrunner caught up in the 1980s Iran-Contra scandal, all three deemed her handlers here.
In a brief and bewildering letter to his shareholders, and filed with the SEC, Byrne confirmed the affair and claimed he had several roles as a confidential informant for law enforcement.
Byrne said that Warren Buffet had advised him to come clean and leave his job to prevent Overstock from being further enmeshed in a spy-versus-spy battle that had nothing to due with the online furniture business. Or crypto currencies, for that matter, although Byrne believes his enemies were motivated to target him because of his crypto evangelism.
Patrick Byrne image via CoinDesk archives
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