Overstock founder Patrick Byrne, who resigned abruptly as CEO last month, has sold his entire stake in the online retailer.
Byrne unloaded close to 5 million shares, worth about $90 million before taxes, according to a regulatory filing Wednesday evening. Byrne was previously the company’s largest shareholder. Last month, after resigning, he told Forbes that he intended to hold onto his shares, saying he had “great, great enthusiasm for the prospects of the company.”
However, Byrne said he would be putting the proceeds into gold, silver and cryptocurrencies. He referred to these investments as “countercyclical to the economy.”
Byrne went on to say that in the event of an economic downturn, the value of these assets would rise, and he would be in a position to provide a capital injection to Overstock. “You will have not just access to capital, you will have access to the friendliest capital imaginable: my own,” he wrote.
He also said his decision to sell his shares was prompted by a fear of retaliation from the government, which he referred to as the “Deep State,” for reasons that were not entirely made clear. “If I had stayed at Overstock or even remained a large owner of OSTK, they would try to break Overstock as a way of crippling me,” he wrote.
Byrne stepped down as Overstock’s longtime CEO in August, after disclosing that he had been involved as a federal informant in the investigation of accused Russian spy Maria Butina. In his resignation letter, he cited his involvement in “certain government matters” as complicating “all manner of business relationships from insurability to strategic discussions regarding our retail business.”
However, there is more to the story. In recent years, Byrne had become captivated by blockchain technology, a decentralized, distributed ledger technology that underlies cryptocurrencies like Bitcoin. He had funneled Overstock’s dwindling resources into blockchain ventures—more than $200 million since 2014—yet had little to show for it. The company’s blockchain investment arm, Medici Ventures, has yet to generate meaningful revenues and racked up losses of $61 million in 2018.
Byrne also began exploring a sale of the retail business in 2017, but to date no buyers have materialized. Overstock, once reliably profitable, lost $206 million last year and $110 million in 2017. The company’s heavily shorted stock has plummeted from $87 in early 2018 to $15.30 at the start of trading on Thursday as some $1.5 billion in market capitalization has evaporated.