Categories: OLD Media Moves

Fort Worth editorial slams Cuban, ShareSleuth

An editorial in the Saturday Fort Worth Star-Telegram took billionaire Mark Cuban to task for his short selling of stocks written about on the investigative business journalism Web site ShareSleuth.com that he is funding.

The editorial stated, “The story says that Xethanol hasn’t backed up its promises and questions the background of some of the people connected with the company. Xethanol responded Thursday on its own Web site ( www.xethanol.com), saying that it does indeed produce ethanol — lots of it — and that the people criticized by Sharesleuth are good folks.

“That’s a part of journalism, too. People and companies get to respond when they take heat.

“What’s not journalism is what Cuban did.

“Knowing that the Sharesleuth story was coming out, he invested about $126,500 in a short sale of Xethanol stock. That means that he borrowed shares (10,000 of them) and sold them. It means that he could make money if the stock value went down, when he would buy cheaper shares to pay back what he borrowed.

“It means that Cuban and Sharesleuth left themselves open to the charge that the story was simply an effort to drive down the price of Xethanol stock so that Cuban could make money. It damages Sharesleuth’s credibility, which is a big thing in journalism — in fact, it’s the whole thing.”

Read more here.

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