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Overstock CEO says he had to sell shares to supplement his wages

(Reuters) – Overstock.com Inc. Chief Executive Officer Patrick Byrne lashed out on Friday, investors who questioned its recent sale of shares, saying he had to supplement his $100,000 per year salary, and swear never, “such a statement again.”

Overstock.com Inc. Chief Executive Officer Patrick Byrne. Thanks Overstock.com/via REUTERS

His letter to shareholders here followed a 21% slump on Wednesday and Thursday in the Overstock price of the share to the lowest since 2012 after he should the sale of 500,000 shares earlier in the week.

On Friday communication, Byrne said that he had sold more than 400,000 shares. In all, Byrne recently sold 900,000 “founders shares” of more than 15% of its stake in the company. Stock shares rebounded 3% on Friday.

“I simply had to supplement my nominal salary with sales in order to fulfill personal commitments to invest personally in blockchain projects such as the Medici Country Governance, together with a need to satisfy charitable pledges,” Byrne wrote.

“I’m not going to ever make such a statement again. I thank the shareholders stay within the law and not make decisions on the basis of inside information, not the explanation of my life and projects outside of Overstock,” said Byrne.

Byrne for more than a decade, has openly fought short-sellers targeting his company as it competes against larger rivals, including Amazon.com and eBay.

Addressing his letter: “Dear people,” Byrne said he was surprised by the “unexpected stir” caused by his stock sales.

“To be honest, I had no idea that the shareholders would demand an explanation of why and how I want my money derived from my labor and my property, to pursue my ends in life,” Byrne wrote, italicizing the word “my”.

“Not one time have I ever asked a shareholder for his justification in the decision that he made. But given the consternation this has caused, I give an answer, to exclude from further repetition of the mass of vapors.”

The company’s largest shareholder, Byrne said he told investors a year ago that he would be “significant sale of the shares of fund for various projects, including the blockchain investments.

Byrne, a libertarian with a phd in philosophy at Stanford University, previously sold about 775,000 shares in September. For this week’s sales that he had about 16% of the Stock.

Total short bet against Overstock currently stand at $157 million, which corresponds to more than 50% of the float, according to S3 ners, a financial analysis firm. The retailer is more focused on short-sellers than 99% of AMERICAN businesses, according to Refinitiv.

The stock has fallen from about 90% of the record high in January 2018, when the Overstock was benefiting from its plan to launch a digital token of the hype around cryptocurrencies.

Following Byrne’s letter and Overstock’s stock slump this week, veteran short-seller Marc Cohodes, once a fierce critic of Byrne for reversing the course and the purchase of Overstock shares in October 2017, tweeted that “The (sic) time that he step aside as CEO, but would be a great President, but enough is enough.”

According to the company’s annual proxy, Byrne for many years, has denied any bonus and has asked that his total compensation is not more than approximately $ 100,000 per year. In 2018, his base salary was $ 96,779 and with holiday pay and other adjustments” is paid a total of $104,231 for the year.

Byrne has committed to approximately 1.9 million of its 5.8 million shares that he owned prior to this week’s sale as collateral for credit from banks, according to Overstock annual report.

Reporting by Aishwarya Venugopal in Bengaluru; Writing by Dan Burns and Noel Randewich, additional reporting in New York by Chuck Mikolajczak; Editing by Cynthia Osterman

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