Biz news funded by shorting stocks

Cary Spivak of the Milwaukee Journal Sentinel writes in the latest issue of American Journalism Review about the two business news sites — sharesleuth.com and www.ibizreporting.com — where the journalism is funded by shorting the stocks of companies the sites report about.

Spivak writes, “Carey, Lobdell and Davis were respected journalists who captured some awards before they linked up with their current employers. The reporters say they have the freedom to choose which stories to pursue and to follow all of the traditional rules of journalism to ensure their work is well researched and accurate.

“They may be OK with the short-selling model, but others, including fans of their work, are not. ‘At some level, I view the practice as distasteful,’ says Roddy Boyd, a former Fortune and New York Post reporter who launched his own investigative site, The Financial Investigator(thefinancialinvestigator.com), in June. Boyd, a onetime bond trader who is writing a book on the collapse of AIG, says he is paying for his site out of his own pocket.

“‘I would not want anyone to be able to say of my work, ‘Whoa, it’s tainted,’ or that there are concerns,’ says Boyd, who praised the work of Carey and Davis.

“Even Tracy Coenen, a Milwaukee-based forensic accountant who works with Minkow, is a tad queasy about the funding strategy. Coenen, owner of Sequence Inc.,says she does not trade in the companies investigated by iBusiness Reporting and wishes that Minkow and Lobdell didn’t either.”

Read more here.