Tag Archives: TheStreet.com

AT&T coverage at opposite ends

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TheStreet.com’s Marek Fuchs wrote Friday that coverage of AT&T’s earnings earlier in the week had two widely divergent takes on the numbers.

Marek FuchsHe wrote, “Look at what The Wall Street Journal said about AT&T’s Tuesday earnings report: Wireless Growth, Mergers Fuel AT&T Net. Got that? Wireless growth helped lead to an almost doubling of first-quarter revenue and net profit.

“Now check out The New York Times’ headline on the same first-quarter earnings: AT&T Earnings Beat Forecasts Despite Slow Market for Mobile Phones. Slow market for mobile? Uh, The Wall Street Journal told me that mobile’s growth fueled that good net.

“The Wall Street Journal and The New York Times weren’t the only awkward pairing. Dow Jones’ MarketWatch said, ‘AT&T profit doubles on merger, mobile.’ Countered Reuters: ‘AT&T profit doubles, but wireless lags.’

“Strength, weakness. I guess one man’s double is another’s lag. Jokes aside, words should not be such an imprecise measurement of financial fact.

“Which side is right? One has to be, right? Though it would seem impossible, both sides actually include mistaken half-assumptions and miss the key point. They (OK, I) don’t call the business media the lowest form of thinkers for nothing.”

Read more here.

TheStreet.com posts record revenue amid strong ad sales

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Financial news site TheStreet.com reported record first-quarter profits on Thursday due to a 56 percent increase in advertising.

Robert Holmes, a reporter for TheStreet.com, wrote, “The company reported net income of $3 million in the quarter, up from $2.6 million in the year-ago period on net revenue of $14.5 million, a 30% increase from $11.1 million from the first quarter of 2006. Earnings per share were 13 cents, against 11 cents in the year-earlier period.

“‘I am extremely pleased with our financial results as evidenced by our record revenue level,’ said Thomas. J. Clarke Jr., chairman and chief executive officer of TheStreet.com. ‘We came into the year focused on increasing the advertising portion of our overall revenue mix. Having delivered 56% growth in our advertising revenue in the first quarter, advertising now comprises 35% of our total revenue mix.’

“Clarke added that the acquisition of the remaining 50.1% in Stockpickr.com, announced Wednesday evening, would enhance the company’s efforts.

“In addition to the growth in advertising revenue, the company saw subscription revenue increase by 15%, and other revenue, primarily syndication, increased 152% over 2006. Earnings before interest, taxes, depreciation and amortization totaled $2.9 million, an increase of 15% over EBITDA of $2.5 million in the prior year.”

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Jim Cramer's 2006 comp: $2.4 million

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“Mad Money” host Jim Cramer made more than $2.4 million in 2006 from his base salary from TheStreet.com, his share of a radio talent fee for his now-defunct radio show and exercising stock options from the online business news company he helped start.

Jim CramerTheStreet.com’s proxy was released on Monday.

It stated, “In consideration for providing these services, Mr. Cramer’s salary was increased to $750,000 for fiscal 2006. In addition, he received $407,161, which represents the earned portion of the radio talent fee paid to the Company through December 2006 by CBS Radio Inc. under the Company’s January 2006 radio agreement.”

Later, the proxy noted, “During 2006, Mr. Cramer received, in the aggregate, $1,245,757 in connection with the exercise of options to purchase 202,500 shares of the Company’s common stock.”

The proxy did not disclose how much money he was paid last year to host CNBC’s “Mad Money” show.

As noted last year, Cramer was paid $500,000 in 2005 and will see his base salary rise to $1 million this year.

TheStreet.com CEO Thomas Clarke Jr. received total compensation of $1.3 million in 2006, including a $410,000 salary and a $136,825 bonus. He also received $319,806 from options. His salary in 2005 was $356,000, while his bonus was $124,600.

Business media and the stock market

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TheStreet.com’s Marek Fuchs had an interesting column on Wednesday about the relationship between the business media, the stock market and investors.

Marek FuchsFuchs wrote, “If you have learned anything from The Business Press Maven, it is that the business media provide a running commentary of conventional thought. Get caught up in it and you’re in trouble. That’s because conventional thought shifts, and investors don’t want to be on the wrong side of it when it does. But tilt against it, and you will do well.

“Last year, The Business Press Maven was uncomfortable enough to demand that the business media get his misery over with and parboil him in a cauldron. That’s because a piddling 19-point, or 0.2%, rise in the Dow that brought it over 12,000 was greeted by hyperbolic headlines about ‘home runs’ and ‘once-skeptical investors rediscovering a passion for stocks.’

“But this morning, as the Dow stands poised to break its record closing high of 12,786 — whether in a day or over the next few weeks — headline writers appear appropriately medicated.”

“This is good news for investors.”

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TheStreet.com wants to boost site traffic

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Amanda Fung of Crain’s New York Business writes that business news and investing web site TheStreet.com needs to increase its site traffic to catch up with other online financial news sites.

Steven ElkesHer story was partially based on an interview with Steven Elkes, the site’s new executive vice president of mergers and acquisitions.

Fung wrote, “The 11-year-old site, co-founded by rambunctious TV celebrity and stock picker Jim Cramer, has traditionally catered to professional, savvy investors. Today, most of its content is free to consumers, while some specialized offerings are subscription-based.

“The site trails behind a number of rivals, including well-known behemoths such as Yahoo Finance and Dow Jones & Co. TheStreet.com logged just 2.1 million unique visitors in February, compared with a whopping 11.9 million for Yahoo and 5.4 million for Dow Jones, according to Web research firm comScore Media Metrix. Mr. Elkes hopes to change that.

“He built the finance and legal operations from scratch at women-oriented site iVillage, where he worked for almost a decade. During his tenure, he steered iVillage through more than 10 acquisitions and an initial public offering. He eventually worked his way up the Silicon Alley darling’s ladder to become chief financial officer in 2004. When NBC bought iVillage last year, Mr. Elkes managed the integration of both companies and then moved on to join a small online marketing provider, Azoogle, where he established its legal, finance and human resources operations.”

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Making fun of the WSJ's "What's News" box

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TheStreet.com’s Marek Fuchs is a bit sarcastic in his tone Monday about an item he saw in the Wall Street Journal’s “What’s News” box on the front page.

Fuchs wrote, “In the ‘What’s News‘ section of The Wall Street Journal’s front page, the paper’s top editors — those hard-bitten souls who have seen all there is to see in the world’s financial markets and report for their page-one duty only because they are the best and brightest of the business media field — tell us what will happen in the stock market this week.

Marek Fuchs“I’ve learned to hold these little capsules, designed as quick reference points, in a depth of suspicion. But this morning’s version is tops — or, uh, bottoms.

“Pontificated the Journal: ‘Profit news is set to drive the stock market in coming weeks; slower growth may not upset the market, but warnings or big declines could roil investors.’

“You don’t say. Slower growth may be no biggie, but warnings or big declines could be? Wasn’t it lucky we read that? Thanks for parsing the future for me, boys and girls at the Journal; you really made it come alive and seem to make sense. Who says the perspective of newspapers will ever lose its relevancy?

“Wait, this just in. The Wall Street Journal’s new weather page says that if it drizzles, people will just get damp. Then again, a downpour might really soak people.”

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Barron's profile of Home Depot CEO falls into old trap of biz journalism

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TheStreet.com’s Marek Fuchs critiques the profile of new Home Depot CEO Frank Blake in the latest issue of Barron’s and comes away with the impression that it’s a story that would have been right at home in the 1990s, when business journalists were making rock stars out of CEOs.

Mark FuchsFuchs wrote, “If you ever read a profile of The Business Press Maven that portrays me as committing an act of kindness for a little person, a member of the great unwashed, don’t rush out to buy stock in me just yet. Be mindful that a reporter was tagging along with me when I did the good deed for the little miscreant, and I knew it would make a good anecdote, even a lead. Maybe the reporter wasn’t even around. I could have extended the kindness in full public view, knowing that a reporter would use the second- or third-hand tale as an anecdote, even a lead.

“Enter a Barron’s puff-file of Frank Blake, the new chief executive of the embattled Home Depot. And let The Business Press Maven say, Blake might be a good, modest man. He might even, like Mother Teresa, one day be put on the fast track to canonization.

“But all that matters to investors is, in very specific terms, what he plans to do to turn Home Depot around — and in a troubled housing market, no less. That’s why a storyline built around a worshipful single anecdotal lead about how a current leader is a good guy — and so unlike the last guy — can mislead investors like little else.”

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Premature prognostication by biz media

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TheStreet.com’s Marek Fuchs writes that the business media often makes predictions about the economy and other matters before all of the facts are known.

Marek FuchsFuchs wrote, “The major symptom of this is a quick trigger … for making predictions of either great or terrible turns in markets.

“That’s right, all you amateur business media critics out there. Over the long haul, the business media are neither overly positive nor overly negative. They are just, well, overly.”

Later, Fuchs noted, “But more importantly, you are probably wondering how — other than some real evidence of good sales in the busy season — do we know that a business or industry has hit bottom?

“As always, investors, the key to market direction is in words, not numbers. When you see instant market recovery headlines, that’s just premature prognostication talking. But when you see headlines and leads that constantly make use of the phrase ‘the worst,’ as in ‘the worst in three years,’ ‘the worst since 1994′ or ‘the worst since the invention of gefilte fish,’ then you know we are finally going somewhere good.”

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Blodget wonders if Cramer's career is crippled

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Disgraced former Wall Street analyst Henry Blodget writes that “Mad Money” host Jim Cramer may have hurt his media career by saying on a recent video that he manipulated stocks while he was managing a hedge fund and that investors used business journalists to influence stock prices.

Jim CramerBlodget, who has been feuding with Cramer recently, wrote, “Cramer is implicitly undermining everything he says on his CNBC show. The whole conceit of Mad Money is that small investors can compete with the Big Boys of Wall Street. Well, if this is really the way the Big Boys play the trading game, how can that possibly be true? Is Cramer just implying (but not saying) on Mad Money that small investors should break laws?

“Third, Cramer is putting his employers (and regulators) in a bind. Yes, Cramer is a ratings and readership machine. TheStreet.com is a public company, however, and it presumably does not want to become embroiled in a controversy about whether its advice crosses the line. CNBC, meanwhile, is a subsidiary of GE, a company with a well-deserved global reputation for integrity, fairness, and quality. Leaving aside the insult that Cramer lobbed at ‘the Pisanis of the world,’ can CNBC really say nothing when one of its most visible employees urges investors to use the network to engage in behavior that is questionable to say the least?

“Lastly, there is the tar that Cramer dumped all over his former firm and the entire hedge-fund industry. Did Cramer’s former clients—such as Eliot Spitzer, former attorney general and now governor of New York, who made his name excoriating Wall Street practices (and me)—know that Cramer was engaging in these practices to boost returns? If so, what did they think of this? What does Gov. Spitzer think of it now? Cramer loves to boast about his hedge-fund record. At the very least, we now know where some of it came from.”

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Another example of biz journalists not understanding numbers

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TheStreet.com’s Marek Fuchs writes on yet another example of business journalists writing about numbers that they don’t seem to understand.

Marek FuchsThe example comes from Monday’s New York Times, and the story is about newspaper advertising. As Fuchs points out, the positive number in the story — advertising revenue from newspaper web sites — is not as positive when looked at in context.

Fuchs wrote, “But those goose bumps, it turns out, were just hives: “And while there was one piece of good news for the industry — ad spending on newspaper Web sites rose.” And later: “On the bright side, says the Newspaper Association of America, ad spending on newspaper Web sites jumped 31.5 percent last year compared with the year before, to $2.7 billion.”"With The Business Press Maven’s skin red and blotchy, you probably want to know, were these inaccuracies? Not technically. Taken at face value, both claims were true: Ad spending on newspaper Web sites was, in technical terms, up in February. And it was up over last year.

“But anyone with a horse sense for numbers and what they truly signify could tell that this purportedly ‘good news’ was actually the worst of all, even more damaging than those super-lame classified numbers. Look at how they’ve fallen from last year to this!

“Ad spending on newspaper Web sites appears to be slowing on a sequential basis. If newspapers are to be a viable business in the future, this is way too early in the cycle to see such a slowing. Never mind that classified ad revenue is falling way out of proportion to subscription loss (that’s another unexamined relationship between basic numbers). Here: Web site revenue will never make up for what is being lost on the eroding newspaper side of things, with sequential growth rates in apparent free fall.”

Read more here.