(Bloomberg) -- Patrick Byrne, the eccentric former chief executive officer of Overstock.com Inc., sold his entire holdings in the company he founded and said he would park the proceeds in gold and cryptocurrency.
Byrne cashed out nearly 5 million shares for about $90 million, according to a regulatory filing late Wednesday. The sales started Monday after a 65% surge took the stock to the highest in almost a year last on Sept. 13. The stock plunged 20% that day and is down 35% so far this week. As of 8:24 a.m. in New York, the shares traded lower by 7%.
In a Wednesday blog post titled “A Message to My Former Colleagues at Overstock,” Byrne, 56, said he planned to plow the proceeds in securities that are “counter-cyclical to the economy,” including gold, silver, and two types of cryptocurrencies by Friday. Byrne also said he would be willing to provide a “capital injection if needed by buying back into Overstock” once he’s legally allowed to do so.
Byrne resigned as Overstock’s CEO last month after comments about the “Deep State” and his involvement in a government espionage probe. In Wednesday’s blog post, he said he stepped down after insurance brokers balked at the prospect of covering Overstock while he was still in charge. The filing came the same day the company delayed its plan to issue a “digital dividend” and formally register the new shares.
Byrne sold his shares at lower and lower prices in the past three days, ranging from $21.84 at the beginning of the week to $16.32 on Wednesday, the filing shows.
Overstock on Wednesday delayed its dividend to allay concerns that it would not be liquid and potentially snarl some transactions if it only traded at Overstock’s affiliated brokerage. Registering it would let it trade more widely, and the company also plans to remove a six-month lockup on the new shares.
Short sellers, for instance, would have found it difficult to meet their obligation to deliver the dividend on borrowed shares to the lender. That hurdle sparked a squeeze that drove Overstock’s shares higher by 65% in the prior two weeks.
Byrne’s August exit came after a series of public announcements where he cited entanglements with the “deep state” that included cooperating with law enforcement agents he called “Men in Black” with their “Clinton Investigation” and “Russia Investigation.” Byrne said he’d been romantically involved with Maria Butina, a Russian operative jailed for failing to register as a foreign agent. The founder had previously battled Wall Street short sellers for two decades.
To contact the reporters on this story: Courtney Dentch in New York at firstname.lastname@example.org;Sarah Ponczek in New York at email@example.com
To contact the editors responsible for this story: Chris Nagi at firstname.lastname@example.org, Dave Liedtka
©2019 Bloomberg L.P.