Warning: This Could Be Your CEO!

Does Mr. Byrne have any connection to Senator Robert Bennett (R. Utah), whose interest in Regulation SHO & naked short selling seems to have been piqued by his “constituents” back in Utah? Interestingly, Mr. Byrne “is also the general partner of High Plains Investments LLC, an investment company located in Park City, Utah, and considers himself an investor by trade” according to Overstock.com:

From: Investrend

Of Stocks And Socks: Senator Bennett Bores In On Sec’s Dismal Naked Short Sales Record

March 14, 2005

March 14, 2005 (FinancialWire) When U.S. Senator Robert Bennett (R-Utah), Chief Deputy Whip for Senate Republicans, questioned U.S. Securities and Exchange Commission Chair William Donaldson this past week about a naked short selling article he read from FinancialWire, he indicated he was setting the stage for a full scale inquiry into the SEC’s failure so far to halt the illegal activity. Bennett read Donaldson the story about the man, Robert Simpson, who filed that he bought all of the stock of Global Links (OTCBB: GLKCE) and figuratively stored the stock in his sock drawer only to see millions of shares traded almost daily thereafter. Complaints about similar trades have been lodged regarding Overstock.com (NASDAQ: OSTK), Martha Stewart Living Omnimedia (NYSE: MSO) and Krispy Kreme (NYSE: KKD), to name a few. A video of the exchange between Bennett and Donaldson is at http://banking.senate.gov/index.cfm?Fuseaction=Hearings.Detail&HearingID =140 at the 1:19:30 mark, and also at Investrend Information at http://www.investrendinformation.com Bennett questioned Donaldson in his appearance before the US Senate Committee on Banking, Housing, and Urban Affairs. The Senator chairs the committee s Subcommittee on Financial Institutions, and serves on the Subcommittee on Securities and Investment. He also serves on the Senate Small Business Committee and is Vice Chair of the Joint Economic Committee. This article in a national publication shows that people are still selling short, Bennett told Donaldson. Regulation SHO is clearly not working. He told the SEC Chair that short sales under Regulation SHO are not settled in the 13 days allowed because one broker passes off to another, and so on, inferring that this process can go on indefinitely. Donaldson said that his staff would be glad to meet with Bennett s staff to describe what the Commission is doing to resolve these matters under Regulation SHO. The SEC Chief of Market Regulation, Annette Nazareth, in a recent interview with Floyd Norris of the New York Times (NYSE: NYT), dismissed complaints about naked short selling as people who want their stock to go up. Senator Bennett told Donaldson that he is raising the issue because of complaints received from his constituents back in Utah. It is not clear if Nazareth, if and when she meets with Bennett s staff, will use the same dismissive statement regarding the Senator s constituents. Meanwhile, Robert Simpson s sock drawer may soon have a lot of folks poking around in it. There are already disputes as to how many shares are really outstanding. For up-to-the-minute news, features and links click on http://www.financialwire.net FinancialWire is an independent, proprietary news service of Investrend Information, a division of Investrend Communications, Inc

Why isn’t Dr. Bryne concerned about his safety while Bob is ? Certainly with Bryne lastest post the bad guys have equal reason to be angry .

Bob, what exactly do you want ? A list of those doing a naked short selling ? Has the SEC said they plan on getting a list ?

haha…. “billions”!!

o’brien says:

” I don’t want a member of my family to find out the hard way that when billions are in the balance some may decide to take matters into their own hands.”

hahahaha!

Listen O’brien: Even if you are correct in your conspiracy theories… remember one thing … the market always…, yes always, corrects its short term mistakes.

What about Tivo? … look at the stock chart and you’ll see what I mean…. Thanks Tivo!

Value, by the markets measure, is always a great deal! Need me to explain Obrien??

I’m sure there are “tivo bulls” who went long at $10 and then seen the stock drop to below $4 and thought… must be those darn hedge funds beatin me outa my hard earned money…

But some might have said that on Monday of this week you could have bought a great brand (that being Tivo) for around $300 million. What a deal! Oh, and obviously the market agreed. And that is all that matters.

I seriously wished more CEO’s were like him…

From the worldstock.com pages:

Since 1983 I have spent a fair bit of my life in China, Thailand, Cambodia, Vietnam, and the Levant. Like many visiting such places, I was overwhelmed by the destitution I saw there. Perhaps as a result, my graduate studies centered on philosophy and development theory, yet over time I grew skeptical of the advice the West has offered the world’s poor for the past fifty years, and of the bromides of the World Bank, the IMF, NGOs, and charities.

Years after I left such academic matters behind me to become an investor, the opportunity arose to create an Internet outlet store. From the start we designed Overstock with one mission: to create an e-retailer optimized for liquidation: that is, to work within fractured supply channels of numerous, scattered vendors, scooping up products in lots too small to be moved efficiently through mass retail.

In 2001 I took a break from Overstock to visit India and Southeast Asia. Unlike an earlier visit to Cambodia in the 1980s, this time I was able to travel widely by motorcycle. As I went from village to village, I came across small groups of artisans making first-rate silver and woodwork, table settings, silks, and home décor products. Some of these cooperatives included the disabled, many of whom had lost limbs to landmines, or women with no legitimate job opportunities at all. One afternoon I crashed my motorcycle on a dirt path and lay tolerably banged up in the tropical sun, watching farmers work their fields. Some children took me to their village, and that night, sitting on a cot in the dark, perhaps under the influence of too much of their painkiller, I reflected on what I had seen. I remembered a Hanoi nail factory I had visited in 1988, staffed and managed almost entirely by the blind (to this day, one of the most incredible things I ever witnessed). I thought about the famous Grameen Bank of Bangladesh, a pioneer in micro-credit for village entrepreneurs (often women) who take loans to buy small capital goods, such as sewing machines, to support themselves. I thought about similar small cooperatives of artisans in Lebanon, Palestine, and Peru, which I had either seen or read about.

I lay there speculating from the economic and business perspectives I lacked as a youth, and saw a common thread running through these communities, a thread I had previously missed. They have in common, of course, their poverty, coupled with a desire for work, self-respect, and the chance to provide for their families. Yet beyond their disabilities, obstacles, and lack of capital, a larger problem confronts them all: their output comes into the world through highly fractured supply channels of numerous, scattered producers, in lots too small to be moved efficiently through the mechanisms of mass retail.

Finally it was too obvious even for me to miss! The central problem of artisan production and liquidation are indistinguishable: How does one marry scattered small-lot production to mass demand? Because their central problem is the same, the structure of the liquidation market is precisely that of the market for artisans’ goods. And by one of those weird coincidences that seem to govern my life, I had spent two years building the most effective mechanism ever created for marrying scattered supply to mass demand: Overstock.com.
Internet Retailing Meets Artisans: Missions and Dilemmas

Upon returning to the States from Cambodia, I formulated plans for Worldstock, a store within Overstock devoted solely to carrying the works of artisans, especially disadvantaged artisans, and selling them as inexpensively as possible so as to maximize the amount of return for them. The first questions that needed to be addressed were, of course, ethical.

One obvious question concerns child labor. The essence of trade is that it is conducted by free and rational agents, yet children are not “free and rational” in any relevant sense. Children working in factories cannot meaningfully choose the condition of their employment, and so their output is morally tainted. (I decided, however, that children might legitimately help their parents in informal, cottage-industry settings, if their work were limited and they go to school.)

Beyond this, however, I found that I was stepping onto a battlefield strewn with landmines. For example, how can an American liquidator negotiate fairly with a supplier from a poor country in a context of asymmetric power, information, and capital? Would providing new economic opportunities to traditional cultures reinforce entrenched patterns of the oppression of women? Should trade be conducted with people working in countries whose governments are guilty of human rights violations, or would that support tyranny?

Over time I arrived at the best set of principles I could formulate, based on my own personal observations, education, and experience. I chose them by reflecting on the products with which I hope to build Worldstock: goods whose purchase would support women, disabled people, and traditional artisans such as Native Americans, or other disadvantaged people, goods produced through micro-credit, and goods whose production or consumption is carried out in an environmentally sound manner. The common denominator of all our Worldstock products, I decided, would be sustainability: the businesses we will support are those that sustain rather than use up people, cultures, and natural resources.
Economic Sustainability

One way goods can be socially responsible is by offering sustainable livelihoods to disadvantaged people: for example, casualties of war (such as land-mine victims and widows); aboriginals and traditional peoples bypassed by over-centralized development; and women with no viable job opportunities who have fallen on hard times. Through trade we seek to provide stable employment which is healthful enough that it does not “use up” workers in the short term, and with which people can build a life for themselves in the long term. By purchasing their products, our customers are in effect bypassing a top-heavy, hand-out approach to poverty, opting instead for an organic approach that nurtures local cultures and practices.
Cultural Sustainability

Development often causes massive cultural dislocations. For example, efforts to stimulate job creation in cities can lead to increasing urban unemployment as stimulatory effects get washed out by waves of workers forsaking traditional crafts for urban jobs. By buying the products of artisans working in traditional settings, we aim to support traditional practices while ameliorating the cultural disruptions that often accompany development.
Environmental Sustainability

Goods can contribute to environmental sustainability. For example, organizations such as the Worldwatch Institute and One World Products, Inc., aim to save the Brazilian rain forest by researching and selling replenishable products from it rather than burning it for pasture. Moreover, some goods are surrogates for commercial goods, but are produced in nonindustrial, eco-friendly ways.
Worldstock Adoptive Principles

Corporations are often accused of disingenuousness concerning the socially responsible practices of which they boast, so suspicion haunts any firm making claims such as those outlined above. Consequently, along with the foregoing principles governing what products we acquire, we are also committed to the following principles governing our pricing, negotiations, and disclosure.

Razor-thin margin pricing

Some retailers buy goods that contribute to economic, cultural, or environmental sustainability, but then mark them up 300 or more, with the result that only a small fraction of the sales proceeds actually gets to the producers. We have decided on a radically different course. While a small profit is necessary to afford the ever larger inventories that growth requires, my dream is to price our Worldstock goods inexpensively so as to grow the department rapidly and spread the model to as many people as possible. So while the answer to the question, “What percentage of the price actually goes to the producers?” varies by product, in general, it runs in the range of 60 – 70 of your purchase price goes to the producers. The remainder is pretty much entirely consumed in our own costs of importing, duties, handling, shipping, credit card fees and marketing.

Fair negotiation

I am a capitalist. As you read this, I’m doing everything I can to edge out the competition. That’s how we sell TVs, jewelry, and computers at the prices we do. But that hypercompetitive mentality is not appropriate for Worldstock. When disparities in wealth, options, and information between two parties go beyond a certain level, negotiations can no longer be fair. We do not want to chisel Peruvian widows in order to “get the goods,” and I have no doubt that socially conscious consumers don’t want us doing that on their behalf. Consequently, for this department, we do not negotiate roughly with suppliers, but rather remind them that if they charge us too much, we will not be able to sell their products or place reorders; lower prices to me will create higher volume for them. In effect, the buying behavior of our customers dictates how hard the producers themselves face pushback. I could think of no fairer system.

Transparency

Principled disagreement exists among proponents of fair trade.

For example, some Worldstock products are purchased from development organizations, NGOs, nonprofits and micro-credit banks, which organize producer associations and in some cases (landmine survivors, for example) provide training for producers. Some believe that socially responsible goods should be acquired only through such agencies to ensure credibility.

Others claim that limiting purchases to such agencies perpetuates a mindset of dependency, which says, “An agency, not individual initiative, offers the only way to get ahead.” For example, imagine that in my own travels I find (as I have) a small workshop in a village in the Bekka Valley of eastern Lebanon, where a few women work together, making exquisite shawls. Their products do not carry the imprimatur of any UN organization or development agency, but in my view their wares are appropriate for Worldstock. Should I forgo the shawls because they lack the certification of an NGO, or should I trade in them to reward their initiative?

My answer to this dilemma is simple: transparency. We buy socially responsible products from reputable fair-trade importers, NGOs, micro-credit facilities, humanitarian organizations, and directly from artisans themselves. All producers sign a statement of principles concerning the manner in which the goods are produced, and we conduct our own investigation of such suppliers and their reputations. Therefore, a customer who trusts my claim that buying a given shawl contributes to the well-being of a village in eastern Lebanon can buy the shawl knowing where it came from. On the other hand, that customer might choose to buy only those products we acquire through formal channels, such as Rehab Craft Cambodia (an NGO building a self-sufficient business channel for Cambodians with disabilities). By providing sourcing information in our product descriptions, we minimize dilemmas about social responsibility: we are honest and transparent and let the customer decide.
Conclusion

Artisans around the world have trouble reaching their natural markets due to poverty, poor information, and the disadvantage of being small-lot producers in an age of high technology and mass distribution. Yet they are capable of making exquisite centerpiece products. These artisans could feed their families, vaccinate their babies, and send their children to school, if we in the developed world were to purchase the high-quality goods they know how to make. We realized that Overstock could bridge this global gap. The result is Worldstock, a store emphasizing sustainability, fairness, and transparency while empowering artisans to achieve their dreams for themselves and their families.

Sincerely,
Patrick M. Byrne
CEO