How strange is this? Tim Mullaney, the e-business editor at BusinessWeek, sends a detailed and exhaustive list of questions to Scott Blevins, Overstock.com’s director of public relations, via e-mail on Tuesday. The questions are intended for chairman and President Patrick Byrne and other company executives.
Byrne responds — I do not know when, but obviously yesterday or today — and proceeds to post his responses, as well as Mullaney’s initial questions, online. The executive wrote: “Since you did nothing to indicate the interview was off-the-record I am treating it as on-the-record (that is the journalistic convention, I believe), and so have reprinted your letter below. I trust also that you do not mind me responding in this public forum, as you also failed to stipulate otherwise (as some reporters have when they interview me by email).”
You can read the entire exchange here.
Byrne’s company also issued a press release this morning explaining why he responded on the Internet. The press release reads in part: “Had I not responded to Tim’s extensive questions, or had I responded privately, there is some tiny chance that he may have taken liberties with the truth. My responses also contain operational detail to which I feel all investors should be alerted. So given that Tim intended this to be an on-the-record interview, I treated it as on the record, and am publishing it myself first. Please know that the tenor and sense of fair-mindedness are absolutely normal for the group I have decided to confront. Please keep in mind when reading their work in the future that the only thing unusual about this interview was that (God bless the New Media) it was conducted in a fashion I could take directly to the public. Beyond that, res ipsa loquitur.”
For those of you who haven’t taken Latin in a while, that means “the thing speaks for itself.”
Does he not trust the business media that much? And when was the last time you saw a company issue a press release about its CEO responding to a list of questions from a business reporter? It’s not like Overstock’s shares are suffering. It’s stock had outperformed the S&P 500 and the Nasdaq in the past two years, according to this chart. And on Friday, its shares fell less than half a percent.
Maybe he responded in the way he did because of Mullaney’s past coverage. In March 2004, Mullaney began a story about Byrne and Overstock with this lead: “Patrick M. Byrne, chairman of Overstock.com, promotes his company as the place to shop online for prices up to 80% below list. But, Overstock may be overstating some discounts. Spot checks by BusinessWeek found close to 100 instances where Overstock misstated the manufacturer’s suggested list price on items like digital cameras, clothes, and TVs. The $240 million e-tailer carries about 12,000 items, outside of its huge book and music store. For a few, it undershot the list price. But most errors made discounts seem larger. ‘If they’ve falsely claimed what the manufacturer’s list price is, that’s not lawful,’ says Andrea Levine, a director of the Council of Better Business Bureaus. Byrne says there was no intentional deception. He blames most slips on manufacturers’ changing list prices.”
Now that Mullaney’s questions — and Byrne’s answers — have been made public on the Internet, I wonder if BusinessWeek will continue to pursue the story.
I have never seen a company or an executive respond to an interview request like this before, but I do know Byrne’s reputation as being combative with Wall Street. (In fact, check out the part of Overstock’s Web site devoted to the CEO speaking out against Wall Street.)
Byrne has also treated an e-mail from a New York Post business writer asking similar questions this week in the same manner. See here. Byrne and Overstock also issued a release about the Post questions, and noted that its reporter signaled that a story would run in the Sunday paper.
I’d be worried as a business journalist if I thought that all companies I dealt with were going to respond in this manner — it would eliminate consumers wanting to purchase our publications. But I think few CEOs would ever take such drastic measures in responding to a reporter’s questions.
The Web site at which these were found, www.thesanitycheck.com, thinks that some “market manipulator” has been planting these questions about the company’s cash flow and other accounting issues with the media.
My question is: What’s so wrong with that? If the investor has information that he/she thinks is important, then it’s the business media’s job to determine if there’s something to it. I don’t think any business journalist — particularly those at publications such as BusinessWeek and the New York Post — would take the investor’s words as gospel without checking them out first.
How soon we seem to forget that it was a hedge fund manager shorting Enron stock that initially tipped off Fortune reporter Bethany McLean to its funky accounting.
Strange times in the land of business journalism when the Internet/blogging becomes a public forum for a CEO rather than the more traditional means. Then again, Byrne is operating a non-traditional company.