Patrick Byrne, controversial founder and CEO of Utah-based Overstock.com, announced Thursday he is resigning immediately from the company and its board.
In a letter to shareholders, the 56-year-old Byrne cited his decision in July to go public about his involvement with investigations into Russian interference in U.S. elections and a romantic relationship he had with alleged Russian spy Maria Butina.
News reports sparked by the revelations, the eccentric multimillionaire said, are “bubbling (however haphazardly) into the public” — threatening, he added, to disrupt key business talks on the future of the discount online retailer.
“Though patriotic Americans are writing me in support,” Byrne continued, “my presence may affect and complicate all manner of business relationships, from insurability to strategic discussions regarding our retail business.
“Thus, while I believe that I did what was necessary for the good of the country,” Bryne said, “for the good of the firm, I am in the sad position of having to sever ties with Overstock, both as CEO and board member, effective Thursday, August 22.”
Share prices for Overstock.com leapt on the news, closing 8.3% higher in Thursday’s trading. That followed a drop of nearly 38% a week ago, when Byrne first confirmed reporting on his actions by self-described investigative journalist Sara Carter.
Byrne said the company had some delicate strategic discussions ahead that risked being damaged by further revelations, in light of investors’ reaction to his initial claims.
“If the hors d’oeuvre that was served recently caused the market such indigestion," he said, "it is not going to be in shareholder interest for me to be around if and when any main course is served.”
Attempts to reach Byrne for additional comment Thursday were not successful.
Allison Abraham, head of Overstock’s board of directors, said company executive Jonathan Johnson — whom Byrne backed in 2016 as a Utah gubernatorial candidate — would serve as interim CEO.
Johnson, in a statement, offered praise for Byrne’s 20-year tenure heading the company.
“Patrick’s vision for Overstock as an innovative leader has come to fruition,” Johnson said. “It will be my mission as I take the helm to continue and build on Overstock’s achievements and success.”
About 1,700 employees work at Overstock’s headquarters in Midvale, dubbed the Peace Coliseum.
The company issued a statement thanking Byrne for “his vision and leadership” in taking Overstock “from a fax-based liquidator to one of the most influential technology companies of our time.”
Byrne asserted about a week ago he was acting as an FBI informant during his three-year liaison with Butina, who has been jailed for 18 months after pleading guilty to conspiring to act as a foreign agent in the U.S. without notifying American authorities.
Their romantic relationship developed, Byrne said, while he “assisted in what are now known as the ‘Clinton Investigation’ and the ‘Russian Investigation’,” with FBI encouragement.
In an interview with The New York Times, Byrne said Butina’s repeated mentions of people involved in the campaigns of Hillary Clinton, President Donald Trump and others made him wary, eventually leading him to contact the FBI.
He said he remained “quite fond” of Butina, whom he met at a conference in Las Vegas in July 2015. He reportedly even urged her to “go home and be president of Russia one day.”
Coming forward with the revelations, he wrote in his statement Thursday, “was not my first choice, but 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.”
He said he now would be "leaving things to the esteemed Department of Justice (which I have doubtless already angered enough by going public) and disappearing for some time.”
Byrne said he had been contemplating resigning for more than a year and used his departure Thursday to try to guide investors to support several of his ideas while at Overstock, including three subsidiary companies devoted to blockchain technology.
He called those firms — Medici Land Governance, Bitt and tZERO — “arguably the leading blockchain disruptors in existence,” with potential, Byrne said, to generate “trillions” by revolutionizing the sectors of land governance, banking and capital markets.
Byrne also offered praise for key members of Overstock.com’s retail leadership team, including Chief Marketing Officer JP Knab; data scientist and machine-learning specialist Kamelia Aryfar; and Dave Nielsen, newly hired head of the firm’s retail business.
Aryfar, Overstock’s chief algorithms officer, also issued a statement praising Byrne as “a true visionary.”
“Dr. Byrne successfully created and molded Overstock over the years by pioneering the marriage of tried-and-proven competitive business principles with cutting edge data analytics and technology,” Aryfar said.
The departing CEO also singled out Johnson, whom Byrne backed in 2016 against Gov. Gary Herbert. After beating Herbert in the GOP convention, Johnson — who received nearly $850,000 in campaign contributions from Byrne — was defeated in the primary.
“You could not have a more stable, prudent leader,” Bryne said Thursday of Johnson. “The reason we have been such good partners is that Jonathan is the exact opposite of me in many respects.”
Saying he was their “humble servant,” Byrne closed his letter by wishing shareholders “a smooth and level road. … And don’t forget to shop Overstock.com!”
