Tag Archives: Markets coverage

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Anonymous sources, Trish Regan and business journalism

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Felix Salmon of Reuters writes Monday about Bloomberg Television’s Trish Regan and her interview with Seeking Alpha CEO David Siegel where she was critical of his company’s refusal to disclose the name of an anonymous writer who had disclosed an investment by hedge fund manager David Einhorn.

Salmon writes, “Let’s say that the blogger in question had phoned up Regan and told her (off the record, but with Regan knowing her source’s identity) that Einhorn was buying up shares of Micron Technology. That might have turned into a nice little scoop for Regan, if she had confirmed it with other sources — all of whom would themselves surely have insisted on anonymity as well.

‘If Regan had published that story, Einhorn would surely have been annoyed, since he was taking great care to accumulate his stake in Micron as quietly as possible. But here’s the thing: Einhorn would never have dared take Regan and Bloomberg to court, trying to force them to reveal her sources. If a journalistic organization finds out a true fact and publishes it, that might inconvenience a hedge-fund manager, but it’s not going to result in a court case.

“In the Micron case, however, Einhorn saw an outlet which was small enough to bully. If he wins, as Sorkin says, ‘the case could have a chilling effect on the free flow of information to traditional news outlets’ — it would damage not only Seeking Alpha and its pseudonymous blogger, but also Trish Regan and all other journalists with confidential sources. Einhorn wants to be able to keep his own information confidential; he just doesn’t want Seeking Alpha to have a similar right.

“If anybody deserves a lecture on journalism in this case, then, it’s not Siegel, it’s Einhorn. Meanwhile, Siegel is faced with a very hard decision. Einhorn is not the kind of person to back down from a fight: he has essentially bottomless resources, and will happily spend millions of dollars on lawyers just to make Seeking Alpha’s life miserable and expensive for the foreseeable future. Big media organizations are set up to fight such threats; smaller startups aren’t.”

Read more here.

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Investor asks for his ban from CNBC to be lifted

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Doug Kass, a money manager who writes for TheStreet.com, writes about how he has been banned from appearing on Larry Kudlow‘s last show of “The Kudlow Report” for comments he made last year in a New York Post article.

Kass writes, “This morning I am reaching out to CNBC to put my comments in the New York Post in the proper perspective, to discontinue the Dougie Kass CNBC embargo and to reconsider its decision not to invite me onto Larry’s final show.

“It would give me great pleasure in honoring a great American and good friend this week on CNBC.

“As I have written today, respectful disagreement should be encouraged not discouraged.

“Invite me on CNBC based on the merits of my analysis, the originality of my views and my ability to communicate an opinion clearly and succinctly. Don’t continue to be influenced by a one-sided, misconstrued and biased (CNBC-hating) New York Post column published last August.

“The olive branch has been offered to CNBC.”

Read more here.

Seeking Alpha CEO David Siegel

Seeking Alpha president discusses anonymous writers

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Seeking Alpha President David Siegel discusses crowd-sourced stock opinions on Bloomberg Television’s “In The Loop.”

He also addressed the issues regarding Seeking Alpha allowing writers to post anonymously on its website.

“Our focus is on building the best possible site we can with a vigorous editorial review,” said Siegel in the interview. He said that Seeking Alpha knows the identities of its anonymous bloggers and that it does a vigorous background check on them.

Seeking Alpha

Seeking Alpha needs to change its anonymous policy

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John Kimelman of Barron’s writes that Seeking Alpha should change its policy that allows writes to post anonymously.

Kimelman writes, “Even though Barron’s magazine and its Website would never allow a writer to pen a column without a real byline, I can understand why anonymity might be appropriate in certain instances on a site like Seeking Alpha. For example, why not limit the privilege to instances in which writers are potentially putting themselves or their careers in harm’s way by calling out wrongdoing?

“I contend that Seeking Alpha, given its large readership, could insist that many more writers use their real names and still attract plenty of copy.

“Seeking Alpha also faces another problem but one with no easy solution. It asks that all its writers list whether they are long or short the stocks they are writing about. But there is no way to enforce honest answers. Hoffman admits that his writers are simply on the honor system. Thus, one has to wonder whether the anonymous writer of a tough article on a company has a short position on the stock, even if he or she says he’s not invested.

“Then there’s the issue of the experience level of many of the writers. Many are college students and at-home investment hobbyists with limited academic qualifications. I wouldn’t suggest that a smart, serious college student or hobbyist isn’t capable of doing his homework on a stock. But good investment writing involves both analytical skills and writing ability. And people with limited experience are usually at a disadvantage.”

Read more here.

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Seeking Alpha says most-read posts determine stock movement

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Eli Hoffmann, senior vice president of content and editor in chief of SeekingAlpha.com, writes that recent research has shown that the more a post on its site is read, the more likely the stock mentioned in the post will move.

Hoffmann writes, “The researchers looked at pageviews and reads-to-end (how many readers finished reading an article) for articles that were destined to be predictive of future returns, and for articles that were destined to be counter-predictive of future returns. They also measured the acrimoniousness of those articles’ comments. They found, astonishingly, that during the first 48 hours after publication, articles that were destined to be predictive of future returns had above average page-views, above average reads-to-end, and unacrimonious comment streams, while articles that were destined to be counter-predictive had below average page-views, below average reads-to-end, and acrimonious comment streams. In other words, crowd behavior was a leading indicator of which predictions would be right, and which would be wrong.

“Other points from the study that weren’t obvious from the Journal article:

  • Researchers discounted stock performance during the first 48 hours after publication in order to remove from performance data immediate reactions to articles being published.
  • The researchers looked at the ability of Seeking Alpha articles to predict not only future stock returns, but also future earnings surprises. This was in order to discount for the possibility that the phenomenon was simply a case of a large platform influencing future stock prices rather than predicting them. Future prices could in theory be influenced by crowd behavior, but investors have no ability to influence future earnings surprises.
  • SA articles and comments predicted stock returns over every time-frame examined: three months, six months, one year and three years. This was not true of previous studies of the predictive value of Twitter and Internet message boards, which demonstrated no predictive value. Previous studies of sell-side research demonstrated some predictive value over short time frames that disappeared over longer time frames.
  • Further demonstrating the value of crowd-sourced research, they found that in cases of broad-based disagreement between authors and the community, community sentiment was more accurate in predicting future stock prices and earnings surprises.”

Read more here.

 

Money

Stock promoters making inroads on financial news sites

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Stephen Gandel of Fortune writes about how the writing of stock promoters is increasingly being found on financial news sites.

Gandel writes, “In the past year or so, several finance websites — including Forbes.com, Seeking Alpha, Wall St. Cheat Sheet, and others — have published articles by authors who were allegedly paid to promote the stocks they were writing about. These articles were not labeled as advertisements and carried no disclosures that the authors had been compensated by their subjects. In fact, on at least one of the websites — stock blog Seeking Alpha — the articles carried a disclosure stating the author had not received any compensation from anyone outside of Seeking Alpha to write the article. Seeking Alpha now admits that some of those disclosures were inaccurate.

“The articles in question were published through the websites’ contributor networks and were allegedly paid for by an investor relations firm called The DreamTeam Group. Most of these pieces focused on so-called penny stocks — companies with shares that trade for less than a dollar and not very often, a favored terrain of stock promotion schemes.

“While not all of the facts are clear, the websites admit that they were duped. In the past few weeks, more than 100 articles have been pulled from Seeking Alpha, Wall St. Cheat Sheet, and other websites that have been caught up in the stock promotion scheme.

“In some cases, the stock promoters were successful. In late December, Forbes.com published an article by Tom Meyer called ‘The race to develop a brain cancer treatment takes an interesting turn.’ The article said a small biotech company called CytRx had ‘remarkable results’ in a recent drug trial and ‘appears poised for a significant run in the months and years ahead as the company’s platform continues to be validated by science.’

“Within days of the article’s publication, CytRx’s stock rose nearly 50% to $6.90. Last week, a class action suit was filed against CytRx, its CEO Steven Kriegsman, and an investor relations firm The DreamTeam Group. The suit says that CytRx (CYTR), through DreamTeam, hired Meyer and another author named John Mylant to place positive articles about the company and its shares on Forbes.com and other websites.”

Read more here.

Stock-Market

Study: Stock market blogs beat financial news articles

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The tone of stock market opinion blogs published on investor forum SeekingAlpha.com predicted stock returns, as well as earnings surprises, above and beyond what was evident from Wall Street analyst reports and financial news articles, according to researchers from City University of Hong Kong, Purdue University and the Georgia Institute of Technology.

Yuliya Chernova of The Wall Street Journal writes, “The researchers also noted that Seeking Alpha predicted stock returns above what was evident from news articles. The report used news stories published on Dow Jones News Service, which is a part of Dow Jones & Co., publisher of The Wall Street Journal. Dow Jones declined to comment.

“Overall, the findings fit with prior analysis in other fields on the way crowds can outsmart, or at least be just as smart, as professionals. Studies have shown, for example, that Wikipedia accuracy is similar to that of Encyclopedia Britannica.

“Crowd platforms have other advantages over professionals, besides accuracy — Seeking Alpha, for example, covers a greater stock universe than stock analysts, and Wikipedia has more subject entries than Encyclopedia Britannica. Plus, both get updated and revised as things change more quickly than their professional counterparts, Dr. Hu said.”

Read more here.

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Why Seeking Alpha accepts anonymous posts

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Eli Hoffmann, senior vice president of content and editor in chief of SeekingAlpha.com, writes about why the financial news site accepts anonymous posts.

A hedge fund manager is currently taking legal action against the site to find out who disclosed one of his investment positions before it became public.

Hoffmann writes, “I’m not going to comment on that case. But I do feel this is an opportunity to explain how Seeking Alpha’s contributor network works, why we allow contributors to write under a pseudonym, and what steps we take to ensure the integrity of our contributors – and perhaps dispel some common misconceptions along the way.

“Let’s start with the basics: What are we? At its core, Seeking Alpha is a crowd-sourced, contributor-driven research platform for U.S.-focused stock market investors. Because we’re contributor driven, all views you read on SA are those of our contributors (we have more than 3,000 active contributors). There is no house opinion.

“What is so powerful about crowd-sourced equity research?

“We are skeptics about the supposed objectivity of traditional media outlets and research providers. We think that Socratic debate – which gives both sides an equal say and allows the listener/reader to make up his or her own mind – is a far more powerful way for readers to develop an educated opinion. Seeking Alpha takes Socratic debate one step further by allowing not only authors but also readers to have their say using article comments, StockTalks and Instablogs. What emerges is a profound mosaic that frequently outweighs the value of any single piece of research. This idea was underscored in a recent Brunswick Group study which found that blogs such as Seeking Alpha drove 58% of all investors to do further research – double the influence of any other digital information source.”

Read more here.

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Reuters hires energy markets editor, names deputy commodities editor

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Jonathan Leff, global editor for commodities at Reuters, sent out the following staff hire announcement on Wednesday:

I’m very excited to make two important appointments that will round out the leadership of the commodities and energy news file in the Americas.

I am thrilled to announce that Jessica Resnick-Ault will be joining Reuters as Energy Markets Editor in Charge in New York, leading our coverage of the oil and gas markets at a time of enormous change. While a newcomer to Reuters, Jessica is no stranger to the rough and tumble world of arbitrage and absolute returns, having covered both the trading industry and the energy sector from Houston and New York for Dow Jones and, over the past five years, Bloomberg. As a reporter, editor and, most recently, a newsletter publisher, she has brought expert insight, savvy news judgment and deep sourcing to everything she does. I very much look forward to having her on the team, taking our coverage to new heights. She will join us from May.

The incomparable Josephine Mason is named Deputy Editor in Charge of Commodities for the region, taking on additional responsibilities to edit, guide and direct our coverage alongside her outstanding work with the NY commodities team. While metals may always remain her first true love, Jo has brought energy, enthusiasm and unerring news judgment to every part of the energy and raw materials file, and will now share her passion across the region. She will be routinely deputizing for me in the future, and will also take on other certain regional responsibilities, including driving better use of the Newsplanner tool. She steps into this role with immediate effect.

Jo and Jessica will be working closely together with the other journalists who are driving our regional coverage, including Ros Krasny in Washington, Terry Wade in Houston and Jo Winterbottom, who takes up her role leading the Chicago commodities file later this month.

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Reuters seeks correspondent in Tokyo

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Reuters is seeking a reporter who can take responsibility for providing stories, deal analysis, pipelines and special feature in the debt capital market. This job includes delivering the news, collecting comments from the market and supporting the special event.
Responsibilities:

- Has responsibility for collecting data and comments for the new issues in the bond capital market. Collecting information includes terms and conditions, new issuance lists, rating actions, shelf registration and so on. Soon after creating the new data, the reporter starts collecting comments from the market and delivers the deal analysis as the DealWatch news.
- Provide the pipelines, the market analysis, and special feature.
- Support for the special event (DealWatch Awards)
- Establish good relationship with the market such as bankers, traders, and investors.To apply, go here.