Shares of Overstock.com have tumbled 36 percent so far this week after the online retailer’s chief executive said he had helped authorities investigate Russian interference in the 2016 presidential election.
“Starting in 2015 I (operating under the belief that I was helping legitimate law enforcement efforts) assisted in what are now known as the ‘Clinton Investigation’ and the ‘Russian Investigation,' ” CEO Patrick Byrne said in a statement released Monday. “It was the third time in my life I helped the Men in Black."
“I will speak no more on the subject,” he added. “I plan on sitting back and watching the United States Department of Justice reestablish Rule of Law in our country.”
Investors reacted by selling off the company’s stock. Shares fell 18 percent on Tuesday and another 22 percent Wednesday, to close at $15.97.
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“Here’s a highly controversial CEO with a fresh controversy,” said Tom Forte, an analyst for D.A. Davidson & Co. “In addition to his day job running Overstock.com, it looks like Byrne was a low-level government informant who was involved in two controversial investigations. Put that all together and you have major investor anxiety."
Share this articleShareOverstock did not immediately respond to an email seeking comment.
The e-commerce site, which specializes in home goods, is the latest U.S. retailer to find itself ensnared in political controversy. Online furniture company Wayfair came under fire last month after employees found it had sold $200,000 worth of beds and other furniture to a Texas detention center for migrant children. Shares of the company’s stock have fallen 7 percent since.
“This is a different flavor of the same kind of situation,” Forte said. “Investors are concerned that this could have a negative impact on performance.”
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Walmart, meanwhile, is facing calls from politicians, advocacy groups and its own employees to change its gun sales policies after two recent shootings at the company’s store resulted in at least 24 deaths. The company’s stock has fallen 4 percent since a mass shooting at a Walmart in El Paso on Aug. 3.
Overstock got its start in 1997 as an Internet marketplace for excess inventory. Byrne took it over in 1999 and turned it into an e-commerce giant that specializes in home goods, furniture and decor. The company posted sales of $1.8 billion in 2018.
“The frustrating thing for investors is that this is happening at a time when the business itself is in the best position it has been in a long time," Forte said.
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