Overstock's Byrne Rewrites History on the 'Sith Lord'

Byrne takes a blue pencil to his Sith Lord ravings

My favorite flipped-out CEO, Patrick Byrne of Overstock.com (OSTK), has been working intently at his day job, which is haunting Internet message boards in pursuit of whatever demons (mostly in his head) that are bothering him. Lately Byrne has a new jihad: rewriting the history of his famously paranoid "Sith Lord" conspiracy theory in August 2005.

As Bethany McLean later described in Fortune:

Even hardened denizens of Wall Street were shocked by a conference call that Patrick Byrne, the CEO of online retailer Overstock.com, held on Aug. 12. "I want to get something off my chest," Byrne announced. Then he launched into a rant about a "miscreants ball" in which he mentioned hedge funds, journalists, investigators, trial lawyers, the SEC, and even Eliot Spitzer. "I believe there's been a plan since we were in our teens to destroy our stock, drive it down to $6--$10 ... and even a plan for how the company would then get whacked up." The "designated final owner," who provided the "orchestration," was someone Byrne dubbed the "Sith Lord," a person he refused to identify other than to say that "he's one of the master criminals from the 1980s."

It was just the first of many such episodes for Byrne, who subsequently established a unique position in Corporate America as a kind of one-man lunatic fringe. Today, his credibility has bottomed out to the point that nothing he does, not even hiring the washed-up former journalist Mark Mitchell to shill for him, generates the publicity that it might have a year or so ago. Not even personally and openly running a smear site is greeted with more than a shrug of the shoulders. The "oh my goodness" factor (to use Joe Nocera's phrase) is gone.

Now, probably just for the joy of lying, Byrne is trying to go back and change what he said in the Sith Lord rant. He can't, for the simple reason that he said it, but little things like that have never stopped Byrne. Note the exchange of comments at the bottom of this blog post (that's right, Byrne spends his waking hours responding to criticism on obscure blogs):

William [a previous commenter] is lying. For exmaple, he writes, “Another lie Patrick was caught in was his recent assertions that he never said his fantastic claim about a ‘Sith Lord’, who was supposed to be controlling a vast web of people who were naked shorting Overstock, really referred to an individual.” This is a lie. At first the Party Line was to exaggerate what I had said: once I succeeded in getting people to understand the truth (in this case, by pointing out that the “Sith Lord” comment was made in passing at the end of an hour speech), the Party Line became … well, just what William is regurgitating above.

In fact, as a transcript from 2005 attests, Byrne didn't just drop in a comment at the end of the speech. It was an extended and specific rant, in which he said that the Sith Lord was "a name that everybody on the phone, every single person on the phone would recognize this person’s name. He’s one of the master criminals from the 1980s, and he’s back in business."

He went on in that same conference call to say, "the man I’ve identified here as the Sith Lord of this stuff I just say, you know who you are and I hope that this is worth it, because if the feds catch you again, this time they’re going to bury you under the prison. And I’m going to enjoy helping."

The Sith Lord, of course, turned out to be imaginary, and Byrne went on to move on to other demons, starting with Bethany McLean, and including me and others who have criticized him. He now has three stooges on his payroll -- Mitchell, the ever-nauseating Judd Bagley and Evren Karpak -- whose job it is to smear people Byrne doesn't like.

Having made a fool of himself on larger outlets once too often, Byrne now begs for interviews on low-wattage AM stations, where he spews his nonsense to whomever will listen. His latest "media appearance" was a chat on Internet radio with a gent who runs a flooring company. Here's an amusing item on his latest rant from Tracy Coenen's blog. (Note Byrne saying that the financial press makes Byrne "throw up in his mouth a little." I have no doubt that Byrne throws up in his mouth, and frequently, but not because of anything he reads.)

Any other corporate board would have long ago tossed out Patrick Byrne on his keister. But he just goes on and on like the Energizer rabbit, endlessly lying, the gift that keeps on giving.