Why biz stories should include bad news
Sylvia Stead, the public editor of The Globe and Mail in Toronto, writes in response to readers who complained about coverage of a cannabis company that included information from a short seller.
Stead writes, “What riled them most was that The Globe covered a report posted initially on an investing forum site that raised red flags over the purchase of the smaller company by Aphria. While the author of this online report was not listed, The Globe’s capital markets reporter Christina Pellegrini found out it was the chief executive officer of a U.S.-based hedge fund research firm. She spoke to him on the record and included his criticism of the deal, mainly that Nuuvera had – in his words – almost no revenue. Her report appeared online the day after the investing forum posting. She also tried to reach Nuuvera but their representatives did not respond to multiple e-mails and voicemails.
“Covering the criticisms of short-sellers is not unusual in the Report on Business. While they might profit from a lower price, they can point out flaws that the investor should know about, as long as their motive as a short-seller is included. And the fact that the person was a short-seller was clearly stated in Ms. Pellegrini’s article so all could judge any potential bias.
“In just one month, there were many stories quoting short-sellers on Tesla, Shopify, Maricann Group (medical marijuana), Sino-Forest and Netflix.
“The shareholders and others complained that the article about the short-seller wasn’t balanced because there was no comment from the Ontario Securities Commission. In fact, the reporter did ask the OSC for comment on two separate occasions.”
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