Patrick Byrne, CEO of online retailer Overstock and high profile blockchain enthusiast, has moved to defend his recent sale of around 900,000 shares in the company.
He did so as Overstock’s stock price slumped mid-week and shareholders kicked up a fuss. In a ‘take no prisoners’ letter, he said: “An unanticipated stir has been created this week among shareholders by my sale of approximately 900,000 shares of “founder’s shares” of Overstock, referenced in Form 4 filings on 15th May 2019, and today on 17th May 2019. Oddly, people of whom I have never heard are writing me demanding answers regarding my timing, reasoning, and purpose in such sales.”
“Apparently, some find it unsettling and demand answers from me about why, after 20 years of working (generally without salary or compensation), I might sell several tens of millions of dollars’ worth of stock,” he continued. “Frankly, I had no idea that shareholders would demand explanations of why and how I might want to use my cash derived from my labour and my property to pursue my ends in life. Not once have I ever asked a shareholder for his reasons in any decision he made. Yet, given the consternation this has caused, I will give answer, to preclude further recurrence of mass vapours.”
A year ago, Byrne told shareholders that he would be making significant sales to fund a variety of projects. He has since 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, much of it involving education and education reform.”
“Last Friday, I pledged another $1 million to cancer research (assuming the PMC hits its $60 million goal this year). And most exciting, I am working on an interesting (though as yet unapproved) $1 million art project in Birmingham, Alabama in honour of Dr. King. While I was taught it is gauche to make a big deal of one’s giving, such explanation has been called for by the numerous far more gauche letters I have been receiving. So, there it is.”
He explained that he could not sell for much of the past year due to being in possession of information that made it unethical to do so. And he pointed out that for many years he did not draw a salary in his role as CEO, “and even today it’s a matter of public record that my annual salary is $100,000”.
“I do not intend to ever give such an explanation 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,” Byrne concluded.
Overstock, one of the first major retailers to accept cryptocurrency, previously announced its intention to sell its retail business to focus on blockchain ventures, although it now appears to have put the brakes on these plans.
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