Zac Bissonnette of BloggingStocks.com notes that a recent Bloomberg News story about a biosolar company uses a research report that the company paid the analyst to produce.
Bissonnette wrote, “What exactly is the marketing money being spent on? Back to the Bloomberg piece:
The company may earn $6.3 million this year on initial sales of its backsheets, Victor Sula, an analyst at Beacon Equity Research in Frisco, Texas, said.
“‘Because of silicon supply constraints, companies developing technologies for replacing silicon in solar cell manufacturing are trading at premium valuation multiples,’ Sula wrote. He rates BioSolar a ‘speculative buy’ with a target price of $1.37.
“What Bloomberg doesn’t mention — but should — is this little disclosure that sits at the bottom of Sula’s report on the company:
“‘Beacon Equity Research and its affiliates have been directly compensated a total of fifteen thousand dollars and one hundred thousand restricted rule 144 shs directly from the company for enrollment of BSRC in this research program and other marketing services.’
“In a recent post, I discussed the troubling track record of Beacon Equity Research’s stock picks, and Kevin Kelly pointed out serious red flags at BioSolar. We have contacted the reporter for a response and will include it if we get one.
“It’s a shame that a reputable news organization like Bloomberg is playing a role in pumping BioSolar and hopefully the newsroom’s editors will take a hard look at the quality of the reporting on the piece. In the meantime investors should, as always, proceed with caution.”
Read more here. The story can be read here. The stock closed up more than 20 percent on Friday.
