Nick Wagner, KSL

Overstock CEO resigns days after sharing statement regarding 'Russian investigation'

By Jacob Klopfenstein, KSL.com | Updated - Aug 22nd, 2019 @ 11:45am | Posted - Aug 22nd, 2019 @ 10:18am



SALT LAKE CITY — Overstock.com CEO Patrick M. Byrne has resigned, according to a letter he wrote to shareholders that was released by Nasdaq on Thursday.

The news comes after Byrne released a statement last week in which he said he assisted in the “Russian investigation” starting in 2015. Shares for Utah-based Overstock dipped after Byrne released the statement last week.

Byrne's resignation is effective as of Thursday, he said in the letter.

“Though patriotic Americans are writing me in support, my presence may affect and complicate all manner of business relationships, from insurability to strategic discussions regarding our retail business," Byrne said Thursday in the lengthy statement. "Thus, while I believe that I did what was necessary for the good of the country, for the good of the firm, I am in the sad position of having to sever ties with Overstock."

Byrne had been contemplating possibly resigning for more than a year, he said in Thursday's letter.

"I believe that going forward my presence will definitely not be conducive to such strategic discussions (about the future of Overstock)," Byrne wrote. "And if the hors d'oeuvre that was served recently caused the market such indigestion, it is not going to be in shareholder interest for me to be around if and when any main course is served."

Freelance journalist Sara Carter wrote several stories claiming that Byrne had turned over to the U.S. Department of Justice documents relating to the Russian investigation, as well as the agency's "Hillary Clinton probes."

Carter's stories also claimed that Byrne had had a romantic relationship with Maria Butina, a 30-year-old Russian woman who was sentenced to 18 months in jail earlier this year after she was accused of being a secret agent for the Russian government.

In the statement last week, Byrne said Carter's stories were accurate. He also claimed to be the "missing Chapter 1" in the Russian investigation.

On Thursday, Byrne acknowledged the news about his involvement in the Russian investigation, saying that it was "bubbling" into the public. He said he came forward in July to a group of journalists to discuss those government matters.

He said doing so was not his first choice, but did not elaborate besides saying that his Rabbi helped him see that "coming forward" meant telling the public — not just the government — the truth about his involvement.

"I was reminded of the damage done to our nation for three years and felt my duty as a citizen precluded me from staying silent any longer," Byrne wrote. "So, I came forward in as carefully and well-managed fashion as I could."

Also in the release, Byrne discussed the future of Overstock. He founded the Midvale-based e-commerce company in 1997 but has recently been looking to sell the retail side of the business and focus, instead, on blockchain.

Blockchain started as a way to exchange cryptocurrencies such as Bitcoin, but has evolved into a more robust system of digital information transfer methods.

Byrne wrote that he believes "the blockchain revolution will reshape key social institutions."

He did not disregard the company's retail roots, saying that the company has the best retail leadership team it has ever had.

The company's stock prices were listed at $26.06 before Byrne released the letter last week. After he released the "Russian investigation" statement, stock prices dipped to $15.68 at their lowest point.

As of Thursday morning, Overstock.com stock prices had risen back up to $20.88, according to Nasdaq.

"It has been an honor to serve you through thick and thin, threats grand and arcane, for the past 20 years," Byrne concluded the letter. "I wish all shareholders a smooth and level road."

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