Well, that was quick. Gary Weiss is already responding to the Mark Cuban post we pointed you to this afternoon.
I read through his rant a few times and still can’t comprehend his point. He seems to be saying that “transparency” is the virtue of his website. I.e., he is upfront about using his site to front-run his reporters — thereby profiteering in the same manner as sleazy penny stock newsletter publishers.
But after saying that he is transparent in his sleaziness, he takes a few shots at me and seems to say that I’m not transparent and that, in fact, nobody is transparent.
He also…. now this is painful… accuses me of “pimping” my book. Good heavens! What an accusation. An author using a blog to promote a book! The scandal. He found me out. What a sharp guy. Definitely right up there with Cuban front-running his reporters.
Seriously, since Cuban sidesteps the ethical issues here, which he apparently feels — or pretends — do not exist, there’s not much more I can say except to congratulate Cuban, yet again, for giving the enemies of financial journalism still more ammunition.
[Haven't had enough of Cuban and Weiss? A bit of background and analysis after the jump. Bonus: Another 'One Ocean View' reference.]
Mark Cuban’s Sharesleuth is a very good idea. We could use more journalism dedicated to uncovering financial scams and corporate wrong-doing. There really is too much “print the press release” journalism out there, and too much run with the bulls happy-talk in the business press. What’s more, Chris Carey’s reporting seems really solid, demonstrating deep investigative work and avoiding a lot of the cliches of business journalism. It’s actually the kind of reporting the Weiss himself has done, and that he has been an outspoken proponent of.
Weiss’s misgivings probably arise from the fact that he is experienced in doing this kind of work, and knows how some corporate managers and boards tend to respond. Too often the response is to accuse the journalists (or analysts) of being part of some sort of short selling conspiracy, having a financial interest in hurting the company or serving those who do. To the extent that these accusations hurt the credibility of the journalists–even when unfounded–they damage the ability of journalists to convey important information to readers and investors. Weiss does a good job at deriding this tactic as a “conspiracy theory” spread by “crackpots.”
But then Cuban comes along and actually does engage in a short-selling-financial journalism conspiracy, albeit an out-in-the-open, fully disclosed conspiracy that only consists of him, his reporter and their fact checker. There is nothing dishonest about Cuban’s model but it’s certainly not far-fetched of Weiss to fear what this will do to the credibility of disinterested financial journalists.
Three relevant questions to debate of tonight’s Thursday evening martini. Does disinterestedness matter? Does credibility suffer when journalists or their employers have a stake in the subject of their story? Does being completely transparent about having a financial interest in a story nullify the potentially discrediting effects? Finally, why didn’t we think of a way to short-sell “One Ocean View?”
Mark Cuban Responds! [Gary-Weiss.com]
In a cursory search, i couldn’t find Gary Weiss’s background, but the dangerous mistake he’s making is that he is equating the access that a reporter gets which can move a stock (say a new product is launched, and journos get to see it ahead of time) vs what Mark Cuban is doing, which is some degree of forensic accounting, based on publicly available documentation.
Finanacial analysts undestand this distinction, which leads me to believe he’s a reporter, and he’s suggesting that access is equal to investigation, which frankly, urks me.
Update, ah, he’s an ex-Business Week reporter, yeah. The mag that’s in a race with Forbes to see whose arbitary, vacous lists can show up E the most. But whatever.
This isn’t the main point, though. If Weiss’s problem with Cuban is that Cuban is shorting the stocks, then hoping to profit on at-least the spread between his short and the time that Cuban’s audience drives the stock down, then he’s suggesting that the mere publishing of this info is the problem, and giving Cuban more power than what Cuban is giving himself right now.
In that, I say fine. Cuban is doing the work to find the shortable stocks based on public information; he gets the biggest payoff.
Those following will still have to decide if Cuban’s info is worth investing on.
As long as Cuban uses publicly avaiable information, and doesn’t use his access, which i’m sure he has as a billionaire, then i’ all for what he’s doing.
Or basically, if what Cuban’s doing is so nefarious, then he’ll be burned on some shorts, just like those who pick stocks to short out of a hat.
I am amazed that people such as the the one commenting previously are so abtuse as to what an inherently slimy proposition this all is.
Cuban isn’t “doing work based on public information.” He is trading in advance of nonpublic information — which is that Sharesleuth is coming out with a story.
Are Cuban’s defenders simply overgrown frat boys too dense to see the problem with trading in advance of publication? Do they understand the concept, and why it has gotten people in trouble and can still bite Mark Cuban on the ass?
Or are they just knee-jerk fans of anything that a billionaire, even a wacky one, proposes?
Cuban, Weiss, blah, blah blah. Personally, I’d be more concerned about a fledgling industry taking a hit. If the people at the company ARE scammers, they could bring down the curtain on ethanol manufacture just when America needs it most. If they are NOT, then Cuban’s transparent attempts to smear them will be all too apparent, and he can forget about financial reporting and go back to yelling at Yao Ming.
We need ethanol, not profiteers or egotists.
The whole article seemed so misleading becaused it focused on CELLULOSIC, when the Co has been advertising future growth on Municiple Methane extraction.