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Blinkx, Roger Lawson & ShareSoc – Time to come clean?

By Tom Winnifrith | Tuesday 22 April 2014


 


ShareSoc does great work campaigning for private investors, for greater boardroom accountability and transparency. But right now with regard to blinkx (BLNX) it is ShareSoc and its deputy chairman Roger Lawson who have the questions to answer. 

Lawson has posted five times on blinkx since Ben Edelman raised very serious questions about part of its business. On April 5 at the UK Investor Show Edelman produced damning new evidence relating to the assets and operations of Zango which were bought by blinkx after the FTC fined Zango and shut it down for breaking the law. Ben showed very clearly for the first time on April 5 that blinkx was, via those assets, still engaging in the same practices. Surely this was a grave matter of concern for anyone interested in corporate governance, etc? Er…

Lawson reacted by stating that there was nothing new in the presentation. He furthermore accused Edelman of being a showman and cast doubt on his financial motives for exposing blinkx. As an aside he accused me of making defamatory remarks about blinkx’s lawyers.

I posted a reply on his blog pointing out that I had made no defamatory remark and that even blinkx’s bully boy lawyers have not suggested that I did. My post and another which criticised the Lawson analysis were promptly removed although an anonymous poster supporting blinkx and attacking me had his post unedited and it remains on the site.

Why does this matter? Well it matters on a number of counts. On the day the Lawson post was published a lot of folks took heart from the fact that an independent and respected commentator with no axe to grind had slammed Edelman and backed blinkx. Folks bought shares in blinkx on that basis. Read the Bulletin Boards and that is very clear.

Secondly it matters because Lawson’s article was factually inaccurate not just about me or Edelman but about blinkx. Edelman had released a bombshell but, until THIS video went up demonstrating this, those not attending the event were buying shares or holding them in ignorance reliant on (supposedly) independent commentators like Lawson who said nothing was wrong.  If you have forgotten the Edelman bombshells & his straightforward and full explanation of his financial interest in covering blinkx, as a reminder:

Edelman’s standard research contract – as he explained on the video – is that he charges a fee for doing research and writing a report. But if the research shows nothing amiss there is no report so the fee is less. That is his standard terms – less work = less fee. He states that clearly on the video. That seem okay enough and at least Edelman is 100% upfront on any financial interest he may have in blinkx.

…. no other revelations of note?

1. Blinkx bought nearly all if not all of the assets of Zango a firm shut down and fined heavily by the FTC for breaking the law.

2. Edelman showed clearly that blinkx is now engaged in exactly the same activities, even using the same code.

3. So blinkx is breaking FTC rules – is that not a matter of concern?

4. Edelman then showed that the blinkx independent report had not examined any of the relevant data but had merely consisted of chats with blinkx execs who said they were doing nothing wrong. That is a bit of a shock revelation is it not?

In other words the Edelman presentation was explosive and damning. But Lawson gave comfort to blinkx fans and was widely quoted on bulletin boards for dismissing the whole thing and for rubbishing Edelman.  Since Roger had no declared interest in blinkx folks believed him.

But hang on Henry….

Yesterday Doc Holiday revealed HERE that Roger OWNS SHARES IN BLINKX. Yes you read that correctly. He has been on the shareholder list for three years.

So: Roger bashes Edelman who does declare a financial interest and has clearly demonstrated something of major concern. Roger himself does not bother to declare his own financial interest when penning a wholly inaccurate character assassination of Edelman and myself and also writing an (unbalanced and factually incorrect) piece which had the clear effect of getting folks to buy shares in blinkx.

I note elsewhere on Roger’s ShareSoc blog that Sharesoc is now working with an IR Firm (Hardman) on an evening where companies will pay to present to private investors. Roger says that the three companies  are ones “where we think there is an interesting investment case” – is that not a quasi-share recommendation, from a man who says that he does not offer share tips, for the companies paying to attend this joint event?  Perhaps Roger would like to show why exactly he (I assume it is the Royal We as he states that the views on his ShareSoc hosted blog are his alone) feels this way about the PLCs in question. Can he back that statement up with his own DCF valuation? Whatever….

I see that event is being held at Swinegate. Indeed.

I digress. The key point I am making is the non-disclosure of a personal holding in a stock that Lawson is effectively promoting by publishing material which is, at best far from balanced, and at worst just misleading. I would have less problem with Lawson getting his facts wrong if he had been open about his personal holding.

In the interests of transparency on Shareprophets if a writer comments on a stock which he owns or is short of he or she MUST declare that to readers. Failure to do so means we will withdraw the article and not publish anything by that author again.

Clearly ShareSoc – which likes to take the moral high ground - has a different vision of transparency than we do. It can run its organisation however it wants. But perhaps it might now care to disclose in full how many articles Lawson has penned on companies where he does own shares and suggest that in future he is a bit more upfront on the matter. Indeed he needs to be 100% explicit on this matter before he can be taken seriously again.

Lawson knows full well that his piece on blinkx on April 6 would have carried far less weight had it come from a blinkx shareholder rather than an independent voice with no axe to grind. Is this a one off lapse of judgement or is the ShareSoc blog riddled with bull pieces on companies where Lawson holds stock? We do not know as there is no transparency at the organisation campaigning for more transparency. 

I would love to support ShareSoc for the valuable work that it does. However, until it comes clean on this mess I cannot do so and I doubt that anyone else can either. An urgent review of procedures and a full disclosure of stocks which Lawson has commented on while holding is needed sharpish. A full apology from Roger to ShareSoc members (let alone to myself and Edelman) would, I suspect, be appreciated.



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Comments

10 comments

  1. I thought I remembered the name Roger Lawson. He was on TV in 2007 saying ignore the debts etc and lack of readies, Northern Rock has all these fine assets and customer base worth much much much more than the 0 p share price, so the taxpayer should be paying him a much higher price for his shares. http://news.bbc.co.uk/1/hi/business/7887796.stm That shows the quality of his opinions.

  2. Roger Lawson & Tom Winnifrith. Now THAT really is a match made in heaven!

  3. Lawson retired at 50 to live off his investments ………. obviously that means anything he says is mired in self interest and anything he does not say is mired in conflicted interest.

  4. Blinkx and ShareSoc comments on the company.

    These are the facts about the past comments from Roger Lawson, and ShareSoc, on Blinkx.

    Roger has previously reported on Blinkx in a number of both public and private forums and in our newsletter, which is provided to members only. For avoidance of doubt, he has not sought to hide the fact that he has a very small shareholding in the company and this may be inferred from his comments. For example, his reports of Blinkx AGMs make it clear he was a shareholder at the time. When asked, for example on Motley Fool, and to Doc Holiday, Roger has confirmed this fact. The newsletter states “The Editor of this publication and other contributors may hold one or more stocks mentioned therein”.

    Blinkx has been subsequently commented on in later ShareSoc newsletter Editions such as in February 2014 when Roger reported on the Edelman blog post (which otherwise our members may not have known about). It pointed out some of the errors Edelman made which others have also noted. All ShareSoc newsletters are reviewed by our board of directors before publication.
    ShareSoc does not give investment advice and none of the articles ShareSoc has published on Blinkx give any advice about the merits of investing in the stock, or shorting it (unlike the comments by Prof. Edelman).

    ShareSoc’s web site and blogs are covered by our legal terms and conditions which spell out very clearly that we do not give investment advice. But we do promise to correct any errors that are reported to us. To date nobody has complained about the factual content of any of our reports on Blinkx.

    Roger also commented on Prof. Edelman’s presentation at the UK Investor Show and does not agree with Tom that the presentation by Edelman, or the comments by Tom at that event, were unbiased. It was certainly the case that there was little time for questions (Roger did not manage to get a single one in), nor was there anyone providing a contrary view of the complex technical subjects covered by Edelman.

    Tom mentions that one of his comments on our blog was removed. It was removed because the moderator considered it to be defamatory. We reserve the right to remove blog posts which we consider defamatory, inappropriate or for any other reason. This is clearly spelled out at the foot of our blog page.

    In summary, Roger and ShareSoc have attempted to report the news from Blinkx to help inform our readers, and have attempted to sort out which, if any, of the allegations made by Edelman stand up to scrutiny. We have reported both Edelman’s allegations and the rebuttals by the company, so that our Members can form their own conclusions.

    Roger has been critical of the debate on some of the issues, and what appears to be a concerted shorting campaign on the stock, the financial incentive apparently given to Edelman by investors with an interest in the stock to report information of use to them, and other aspects of this affair.

    ShareSoc attempts to provide unbiased information and comments where appropriate, to our Members and others. But we do not ask our directors to stand aside from investing in stocks (a pretty unrealistic expectation if our Members desire informed comment when the Directors of ShareSoc are unpaid). Sometimes the best people to report on a stock are those holding it as they often know more about the history of the company and its current activities than others. Anyone who wishes to judge for themselves on the merits of our reporting should join ShareSoc as a Member as Members get access to a searchable archive or all past Newsletters.

    Blinkx has never presented directly to our members but we do have other companies present where again very specific warnings are given about the content of such presentations (see the mention of Company Presentations in our Legal conditions for example). Those apply to our own events in London, and of course to the prospective event being jointly run with Hardman in Leeds.

    I am glad that Tom has given me the opportunity to clarify how ShareSoc operates, but as so often he has gone over the top in jumping to conclusions about the activities of the organisation. Blinkx is just one of many companies we report on every month, and it is unfortunate that the events at Blinkx have been blown up out of all proportion to the importance of the company in the market (and to the scale of ShareSoc director interests in the company) – probably because it is one of those AIM stocks where there is a very high level of speculation.

    ShareSoc has a commitment to protect the interests of stock market investors, and if that means providing more independent commentary on stocks that seem to be the subject of unreasonable attacks by those with specific agendas, then so be it.

    Stan Grierson, ShareSoc Chairman

  5. Stan

    You simply do not get it. Saying one holds a share in one piece & then not mentioning it again is NOT disclosure. Many folks will have read just one of Roger’s numerous puff pieces on Blinkx ( the Edelman april 6 one). You need to declare ownership on ALL pieces. That is transparency.

    My comment on Roger’s article was not defamatory neither was that of Nigel Owens. Both were removed simply because we disagreed with Lawsons article. In may case I merely pointed out that no-one other than Roger construed my description of BLNX’s lawyers as bully boys as defamatory. Even the BB lawyers do not think they are.

    So the only defamatorey remark was that by Roger saying that I made a defamatory remark!

    The truth is that Roger did not like the fact that Owens and I disagreed with his views so canned his posts.

    At shareprophets we will continue to insists that authors declare all interests in all articles written. If you want to operate a different version of transparency that is your call. I think it a mistake but it is your call.

    You still have not explained why Roger ( who does not tip shares) says the 3 companies at your jv with Hardman offer “interesting investment cases” nor in the interests of disclosure revealed the terms of that jv (given that the PLCs are paying Hardman to attend).

    I could go on but I am on holiday. Suffice to say I do not regard your procedures as transparent and Roger’s suppression of v iews that are dsifferent to his and adverse to a stock where he holds a barely disclosed position do not reflect well on ShareSoc.

    T

  6. You are unlikely to get a further response from Stan Grierson on this because he is on holiday too. Your views about what it is appropriate to say on blogs is different to mine. One can argue about whether your comments were defamatory or not for a long time, but they were certainly impolite and rude comments about someone who was probably just trying to act in the best interests of their client and under their instructions. I certainly don’t want the ShareSoc blogs to degenerate into the standard of many internet boards.

  7. Roger

    At last. My comments were clearly not defamatory. So the only defaming here was in YOUR article in suggesting that I had defamed. I merely pointed that out and you killed the post just as you killed the other one disagreeing with you.

    Yes I was rude to the lawyer in calling him a bully boy. But since he sent me a threatening and menacing letter without checking all his facts, he deserved it. I take no prisoners when folks behave in this way. You presumably believe in just lying back, taking it & thinking of England?

    As to not allowing your comments section to degenerate into the standard of others.. Well whatever I say about BBs they allow a free expression of opinion. On the R Lawson blog you can apparently only post if you agree with Roger. Whatever makes you happy.

    Our views on what to say on blogs are indeed different. I believe a writer has a moral duty to declare a vested interest in EVERY article. You don’t.

    Best wishes

    Tom

  8. Lawson needs to dispose of all his share holdings or resign his post at share soc .

    Other wise whats the point in listening to him .

  9. Instead of buying crap shares and then windbag when it all goes wrong, It is lot simpler to buy good shares in the first place,.


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