Tag Archives: TheStreet.com

TheStreet.com new logo

TheStreet.com and the financial advisors that read it

by

TheStreet.com has more readers who are certified financial advisors than any other financial-media Web site, according to the most recent research from comScore Media Metrix.

A story on TheStreet.com states, “TheStreet, the publisher of this Web site, also ranked first among high-net-worth investors and business decision makers, comScore said in its November report, the latest available.

“TheStreet, founded in 1996 and located on Wall Street in New York, beat out leading financial sites including Bloomberg, Forbes.com and Yahoo! Finance.

“‘Certified financial advisors recognize that the tools and insights we offer at TheStreet help their clients gain a competitive edge; these comScore results validate that,’ said James R. Freiman, senior vice president of Business Development & Strategy at TheStreet.

“In addition, comScore said TheStreet is No. 3 in financial-media Web sites whose audience has household income of more than $100,000 and whose portfolios top $1 million.”

Read more here.

TheStreet.com new logo

SEC charges TheStreet.com with accounting fraud

by

The Securities and Exchange Commission charged digital financial media company TheStreet.com and three executives for their roles in an accounting fraud that artificially inflated company revenues and misstated operating income to investors.

The SEC alleges that TheStreet Inc., which operates the website TheStreet.com, filed false financial reports throughout 2008 by reporting revenue from fraudulent transactions at a subsidiary it had acquired the previous year.  The co-presidents of the subsidiary – Gregg Alwine and David Barnett – entered into sham transactions with friendly counterparties that had little or no economic substance.

They also fabricated and backdated contracts and other documents to facilitate the fraudulent accounting, the government agency alleges.  Barnett is additionally charged with misleading TheStreet’s auditor to believe that the subsidiary had performed services to earn revenue on a specific transaction when in fact it did not perform the services.  The SEC also alleges that TheStreet’s former chief financial officer Eric Ashman caused the company to report revenue before it had been earned.

The three executives agreed to pay financial penalties and accept officer-and-director bars to settle the SEC’s charges.

“Alwine and Barnett used crooked tactics, Ashman ignored basic accounting rules, and TheStreet failed to put controls in place to spot the wrongdoing,” said Andrew M. Calamari, director of the SEC’s New York Regional Office, in a statement.  “The SEC will continue to root out accounting fraud and punish the executives responsible.”

According to the SEC’s complaints filed in federal court in Manhattan, the subsidiary acquired by TheStreet specializes in online promotions such as sweepstakes.  After the acquisition, TheStreet failed to implement a system of internal controls at the subsidiary, which enabled the accounting fraud.

Ashman agreed to pay a $125,000 penalty and reimburse TheStreet $34,240.40 under the clawback provision (Section 304) of the Sarbanes-Oxley Act, and he will be barred from acting as a director or officer of a public company for three years.  Barnett and Alwine agreed to pay penalties of $130,000 and $120,000 respectively, and to be barred from serving as officers or directors of a public company for 10 years.  Without admitting or denying the allegations, the three executives and TheStreet agreed to be permanently enjoined from future violations of the federal securities laws.

Read more here.

Michael Baron

TheStreet.com journalist linked to insider trading ring

by

Reed Albergotti of The Wall Street Journal writes Friday about how Michael Baron, a senior editor at TheStreet.com, has been tied to a sophisticated insider trading ring.

Albergotti writes, “Mr. Baron — described in the complaint as a co-conspirator, or ‘CC-1,’ and as ‘a reporter at a financial news website’ — hasn’t been identified previously. According to the criminal complaint filed in the case, CC-1 couldn’t purchase shares related to an expected acquisition he heard about last year because of restrictions imposed by his employer, but he urged his father to buy shares ahead of the announcement.

“Mr. Baron hasn’t been charged in connection with the alleged conspiracy. He declined numerous requests for an interview. Through his lawyer, Arthur Zucker, Mr. Baron said he cooperated fully with the investigation and continues to make himself available to investigators. He said his client is ‘appreciative of the efforts of the government and its thoroughness’ in investigating the case.

“Mr. Baron’s father, who also is named Michael, purchased the stock and made less than $10,000 profit, according to a person familiar with the matter. Mr. Baron’s father hasn’t been accused of any wrongdoing. He didn’t respond to requests for comment.

“The apparent confluence of bad luck and an alleged lapse in judgment that landed the younger Mr. Baron in the FBI’s cross hairs serves as a cautionary tale about the rules governing the sharing of financial information.”

Read more here.

The Deal

TheStreet.com acquires The Deal magazine

by

The Street.com announced Wednesday the acquisition of The Deal LLC, a media company primarily covering the mergers and acquisitions market, from private equity firm Wasserstein & Co.

Michael Baron of TheStreet writes, “During a conference call, TheStreet disclosed the purchase price for The Deal was $5.8 million in cash and said it plans to discontinue The Deal’s monthly print magazine, resulting in an undisclosed number of layoffs. In a Form 8-K filing, the company said it expects to record ‘material charges for exit and disposal activities’ related to its restructuring plan but didn’t estimate the amount of the charges.

“‘This is a terrific combination that grows the most profitable portion of our business, subscription revenues,’ said Elisabeth DeMarse, CEO of TheStreet, in a statement. ‘The Deal is a prominent and well-respected brand that the market will intuitively associate with TheStreet, creating new revenue opportunities for both businesses at minimal incremental cost.’

“On the conference call, DeMarse said the transaction is likely to immediately add to cash flow on a pro forma basis.

“‘If you have solid information that makes people money, you can get paid for that,’ DeMarse said on the call when asked about the combined company’s business plan going forward.”

Read more here.

Doug Kass

Be a business journalist, not a political blowhard

by

Doug Kass writes on Real Money, an online publication of TheStreet.com, about how some business journalists have turned into political commentators.

Kass writes, “I have very strongly held political beliefs, but I feel as strongly that my platform in my diary on Real Money Pro is an inappropriate forum for me to deliver and voice my views.”

He later notes that business journalists should follow the model set forth by broadcaster Marty Glickman, formerly the voice of the Knicks and Giants:

“Glickman emphasized that the most important roles of a broadcaster were to repeatedly tell the score and to visually and lucidly describe the game’s plays and action. A good broadcaster, he said, doesn’t coach; he lets the game tell the story.

I bring this up, in part, because some of the business media has and will continue to voice their political views, and similar to my political views, no one should be interested in their political stands and/or opinions.”

Read more here. A subscription to Real Money is required.

Update on TheStreet.com

by

Later this evening TheStreet.com CEO Elisabeth DeMarse and editor in chief Bill Inman will meet with investors and others at The W Hotel in New York to discuss the financial new website’s latest accomplishments and future aspirations.

Talking Biz News asked Inman for an update on what’s happening on the editorial side since he took over in April. Here is what he told us:

Several elements have been put in place.

  •  We recruited a bunch of hungry, talented outside contributors who are hammering out great stories.
  • We’ve increased the number of active blogs, now averaging one to two a week. These have brought in story leads and kicked up page views—in the  case of Apple and Faceblook blogs,  several tens of thousands each.
  • We’re exploring edgier pieces that allow readers to read markets better, anticipate the news. The stories are called Street Whispers.
  • We’re also honing our social media skills, focused on Linked-in, FB and Twitter. Here’s a fine story on hedge funds and the price of corn. And here’s the great tweet that resulted: “Cracked corn; hedge funds don’t care”

So we’ve made solid progress. Long way to go.

TheStreet.com suspends dividend as it reports loss

by

TheStreet.com said it will suspend its third-quarter dividend as the online financial news company looks to cut costs and also reported its second-quarter loss widened slightly as revenue fell.

Nathalie Tadena of Dow Jones Newswires writes, “TheStreet said the dividend suspension will result in quarterly savings of about $900,000. Chairman and Chief Executive Elisabeth DeMarse said the company made ‘great progress’ on the expense side of the business, but noted the macroeconomic environment continues to challenge revenue. The company’s revenue also declined in the prior two periods.

“TheStreet is unusual in the online-news world because it began charging readers for content when it launched in 1996 and has stuck with that strategy while most other news sites focused on free models supported by advertising. The company generates most of its revenue from subscribers, who pay for stock-picking advice and other financial information.

“Subscription services revenue fell 12% in the latest period, while media revenue slumped 27%.

“For the latest period, TheStreet reported a loss of $1.9 million, or six cents a share, compared with a year-earlier loss of $1.7 million, or five cents a share. The latest period included a $1.3 million restructuring change and a $200,000 gain on the disposition of assets. Revenue fell 17% to $12.5 million.”

Read more here.

Former TheStreet.com editor Hall to join The Blaze as managing editor

by

TALKING BIZ NEWS EXCLUSIVE

Glenn Hall, who was ousted as editor in chief of TheStreet.com earlier this year, has been named managing editor of The Blaze.

In his new role, Hall will oversee the day to day management and long term editorial planning of TheBlaze.com‘s editors and writers. He starts July 11. Scott Baker is continuing in his role as editor in chief.

In an e-mail to Talking Biz News, Hall said, “Thus begins a new chapter in my career as I take my digital entrepreneurship and journalistic experience to a broader area of coverage at one of the fastest growing new media businesses in America.

“It’s an exciting opportunity as The Blaze prepares to ramp up its original content and establish itself as a media force in the upcoming presidential election. We also will be building out our business coverage with a new approach to covering the economy, markets and companies. “

The site is owned by Mercury Radio Arts, which was founded by radio and TV personality Glenn Beck.

Hall was ousted from TheStreet.com in March. He had joined the financial news site in June 2008 after working for the Orange County Register as its business editor and was later its deputy editor for innovation.

He previously spent a decade at Bloomberg News, where he held positions such as government team leader and Amsterdam bureau chief.

Hall is also a board member of the Society of American Business Editors and Writers and a judge of the Gerald Loeb Awards for the past seven years.

Biz journalists don’t understand Facebook IPO

by

TheStreet.com’s Marek Fuchs talks Monday about how the business media bought into the hype regarding the Facebook initial public offering.

TheStreet.com “in turmoil,” says Cramer

by

Financial news site TheStreet.com is in turmoil, says company co-founder Jim Cramer, in comments posted on FutureofCapitalism.com about his career in journalism.

FutureofCapitalism writes, “A job at the Los Angeles Herald-Examiner was an upgrade in pay — to $179 a week — but not in circumstances. His editor assigned him to try to get an interview with the ‘San Diego Sniper’ while the serial killer was still shooting. It was then that he wound up living in his 1977 Ford Fairmont. ‘Someone was murdered a few cars down from me in my parking lot home,’ Mr. Cramer recalled. On the upside, he did not need homeowner’s insurance, ‘because my collision and theft covered everything.’

“Things have since turned upward for Mr. Cramer. ‘I love my job,’ he said, advising young journalists: ‘You need the Nielsens, you need the page views, you need the showbiz.’

“‘On Monday, go register yourname.com,’ he said. ‘If you believe, as I do, that journalism is indeed commerce, you might as well own yourself.’

“In addition to his work at CNBC, Mr. Cramer also works at thestreet.com, which he described as ‘really in turmoil.’ Although he said ‘the web won’ over television, he said the web-based journalism business is tough. ‘Every year your ad rates go down,’ he said.”

Read more here. TheStreet.com has named a new CEO and a new editor in chief in the past two months.