CNET On Cramer & Short Sellers: "financial press is easily duped by short sellers and hedge funds"
Overstock CEO reflects on Cramer debacle
By Greg Sandoval, CNET.com
Patrick Byrne, CEO of Overstock.com and one of the Internet's most controversial figures since alleging that hedge fund managers conspire with journalists to manipulate the stock market, has been receiving support recently from some surprising corners.Bloomberg News
aired a report on March 13 (which is also available on YouTube) that seems to back up many of the allegations
Byrne has made over the past two years. Then there are the startling comments from James Cramer, the hedge fund manager-turned-host of the popular CNBC television show Mad Money.
During an interview for TheStreet.com in December, Cramer offered a primer on how hedge funds cheat the stock market. In the video, which surfaced last week on YouTube and has since been removed at the request of TheStreet.com, Cramer claimed the financial press is easily duped by short sellers and hedge funds and that federal regulators aren't smart enough to stop it.
Were Cramer's statements the smoking gun Byrne's supporters have been waiting for? He's not so sure.
"The (Securities and Exchange Commission) works for Wall Street," Byrne said in an interview last week. "It doesn't work for Main Street. On a good day, the SEC is up to taking on Martha Stewart over a $60,000 issue. They are not up to taking on Jim Cramer and half a dozen powerful hedge funds."
Byrne sparked controversy in August 2005 by accusing a number of investment bankers, financial journalists and hedge fund managers of collaborating to ruin the reputations of companies to profit when their stock prices tumbled. Byrne claimed that his online store was victimized by such a scheme. In a now infamous 2005 conference call, he said the conspiracy was overseen by a mastermind he compared to a "Sith Lord" out of the Star Wars movies.
Byrne's detractors accused him of trying to divert attention away
from his company's poor financial performance. In 2005, Salt Lake City-based Overstock reported a $25 million loss
. The company's share price, which hit $77 in 2004, closed trading on Tuesday at $17.29.
Salt Lake City, Utah-based Overstock
in 2005 filed suit against Rocker Partners, a short-selling hedge fund, and Gradient Analytics, a research firm. He accused them of conspiring to manipulate Overstock's share price. The SEC opened an investigation into the companies but dropped the probe last month without taking any action. But Byrne hasn't given up. Overstock last month filed a $3.4 billion suit against 12 brokerage firms....read more: here
4/13/2007 06:06:00 AM
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