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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