If you like to read about delusional rantings and paranoid conspiracy theories, you can’t help but follow full-time message board poster Patrick Byrne. He moonlights as the CEO of failing online retailer Overstock.com (NASDAQ:OSTK), but his real purpose in life is uncovering conspiracies.

The funny thing is that if Byrne was a little more lucid, someone might listen to him. Is there corruption on Wall Street? Of course. Is it the grand conspiracy by which financial reporters take their orders from hedge fund managers and write whatever will make the hedgies billions of dollars? I doubt it. But that’s Byrne’s theory.

And I suspect at one time he might have been able to get some traction with the theory if he hadn’t acted so looney and destroyed any shred of credibility that he might have had. (Now I’m not suggesting that he ever really had much, just trying to give him the benefit of the doubt.)

The conspiracy theories were unveiled in August 2005. Byrne doesn’t call them “conspiracy theories,” but any rational person knows that’s what he means. On an August 12, 2005 conference call for Overstock.com, he said this:

I’m calling this story and I’m going to tell you , The Miscreants Ball.

[snip]

I’m going to talk about, I’ll call it the Not Necessarily Miscreants’ Ball.

[snip]

And here’s the funny part. As this went on I started realizing that there was actually some more orchestration here being provided, by what I’m calling here is the Sith Lord or the mastermind. Now, can I tell you who that designated bottom feeder was who was supposed to end up with our company? Can I tell you? I can. But I’m not going to today. The Sith Lord is, can I tell you who that is? Well, I could tell you it’s a name that everybody on the phone, every single person on the phone would recognize this person’s name. He’s one of the master criminals from the 1980s, and he’s back in business. But I’m not going to. I’ll just call him the master mind today.

So that’s the system. Now people may say Byrne, you’re being paranoid and whatever.

[snip]

And lastly, the man I’ve identified here as the Sith Lord of this stuff I just say, you know who you are and I hope that this is worth it, because if the feds catch you again, this time they’re going to bury you under the prison. And I’m going to enjoy helping.

The Register reported in 2005:

Take Overstock, whose CEO Patrick Byrne has held calls with financial analysts in which he delved into his sexuality and experiences with cocaine, in the midst of a tirade on how a cabal led by a “Sith Lord” was out to destroy his company.

Bethany McClean at Fortune wrote:

Then he launched into a rant about a “miscreants ball” in which he mentioned hedge funds, journalists, investigators, trial lawyers, the SEC, and even Eliot Spitzer. “I believe there’s been a plan since we were in our teens to destroy our stock, drive it down to $6–$10 … and even a plan for how the company would then get whacked up.” The “designated final owner,” who provided the “orchestration,” was someone Byrne dubbed the “Sith Lord,” a person he refused to identify other than to say that “he’s one of the master criminals from the 1980s.” And that’s just the basic outline.

Earlier this year, Byrne went on television and ranted about a supposed fax machine at CNBC, to which the hedge funds send instructions for the journalists each day.

So it’s abundantly clear that Patrick thinks the boogeyman is alive and well. I once had a client like that. He told me grand stories about how George Bush was in on a conspiracy to harvest his DNA to create the ultimate human being, that stem cell research was really aimed at finding a way to use his DNA, and that major news channels were covering up the conspiracy. The client’s problem? He was paranoid schizophrenic.

Byrne doesn’t want people talking about his Sith Lord rants, though. So he lies about them and tries to change history, writing on a message board (bold added by me):

Incidentally, in retrospect that this is where the cover-up formally began. All that the shills would report of my claims were that I was mad that OSTK went down and something about a Sith Lord, even though the former issue (OSTK trading) had been taken up for just a few minutes at the start of the presentation, and the “Sith Lord” comment was made in passing at the end. No surprise: that is all that the shills would report on is what makes them shills.

The whole call is about conspiracy theories, and the Sith Lord was mentioned more than once. Byrne continuously rants about oddities like the secret fax machine, yet wants us to believe that he’s in touch with reality?

He also denies that the Sith Lord was a real issue raised by him in a comment on this blog:

William is lying. For exmaple, he writes, “Another lie Patrick was caught in was his recent assertions that he never said his fantastic claim about a ‘Sith Lord’, who was supposed to be controlling a vast web of people who were naked shorting Overstock, really referred to an individual.” This is a lie. At first the Party Line was to exaggerate what I had said: once I succeeded in getting people to understand the truth (in this case, by pointing out that the “Sith Lord” comment was made in passing at the end of an hour speech), the Party Line became … well, just what William is regurgitating above.

This wasn’t some little joke that Patrick made or some cute reference that everyone recognized as a metaphor. The Sith Lord was a prominent part of a delusional rant done on Overstock’s dime. It was during conference call purportedly to discuss the company, but really the discussion was all about the conspiracy. Talk about adding value for shareholders!

Never worried about doing the job of running Overstock.com, Patrick Byrne instead prefers to threaten and harass people. Indirectly, of course. He wrote on a message board:

Never get in a public fight with someone who buys ink by the barrel. – Mark Twain

Someone who buys ink by the barrel should not get in public fights with a guy who buys bandwidth by the gigabyte. – Patrick Byrne

Yes, we all know that Byrne’s paid cyberstalker Judd Bagely is trying his hardest to intimidate, harass, and threaten people. Byrne makes it clear that this behavior, paid for with his family’s money, will continue.

Investigative journalist Gary Weiss notes:

The Sith Lord, of course, turned out to be imaginary, and Byrne went on to move on to other demons, starting with Bethany McLean, and including me and others who have criticized him. He now has three stooges on his payroll — Mitchell, the ever-nauseating Judd Bagley and Evren Karpak — whose job it is to smear people Byrne doesn’t like.

Having made a fool of himself on larger outlets once too often, Byrne now begs for interviews on low-wattage AM stations, where he spews his nonsense to whomever will listen. His latest “media appearance” was a chat on Internet radio with a gent who runs a flooring company.

When do you supposed Byrne will get back to the business of running Overstock.com? Don’t hold your breath. He won’t. And the company will continue to to be a loser, never turning a profit in its history. I’m betting on the company filing bankruptcy within the next year or so. But I’m sure some Sith Lord told me to say that.