Pictured (right): Overstock CEO Jonathan Johnson
Overstock has formally named Jonathan Johnson as CEO, one month after he took on the role on an interim basis in the wake of former CEO Patrick Byrne’s Aug. 22 departure. Additionally, Overstock CFO Greg Iverson has resigned, and company has named its previous Principal Financial Officer, Robert Hughes Acting CFO while it begins a search for a permanent CFO.
The appointment of Johnson as permanent CEO is the first step in moving past the bizarre circumstances around Byrne’s departure. On Aug. 12, Byrne released an official statement via Overstock disclosing that he had been involved as a federal informant in the investigation of convicted Russian agent Maria Butina.
In his resignation letter 10 days later, Byrne cited that his involvement in “certain government matters” could “affect and complicate all manner of business relationships from insurability to strategic discussions,” regarding the Overstock retail business.
Byrne filed a Form 4 on Sept. 18, 2019 announcing the sale and donation of all his shares of Overstock common stock, which were valued at close to $90 million before taxes. Since his departure on Aug. 22, Byrne has not held any management or board responsibility.
Byrne oversaw the split of Overstock into two separate businesses: the online retail business Overstock is known for, and the tZERO blockchain-based trading system. But despite the retailer’s massive struggles, with Overstock losing $206 million in 2018 and $110 million in 2017, Byrne continued to insist in investing in the blockchain side of the business — totaling more than $200 million in funding since 2014.
While Byrne had intended to divest the retail business entirely, no sale ever occurred. Overstock was the first major retailer to accept cryptocurrency as a form of payment in 2014, and in the same year it founded Medici Ventures, the wholly owned blockchain investment subsidiary that operates the tZERO unit.
Allison Abraham, Chairwoman of Overstock’s Board of Directors, appears to be assured that Johnson can right the ship for both businesses: “He is the best choice to lead Overstock,” Abraham said in a statement. “He has the right experience in both our retail and blockchain businesses, and the Board has confidence in his ability to deliver value to our shareholders.”