San Diego Union-Tribune staff writer Bruce Bigelow wades into the coverage of the battle between Overstock.com President Patrick Byrne and business reporters such as MarketWatch.com’s Herb Greenberg and Mad Money’s Jim Cramer with an article exploring both sides of the issue.
To set the stage: Greenberg and Cramer have written and stated negative things about Byrne’s company in media coverage. Byrne, in return, has retaliated against them and their short-selling sources by filing a lawsuit against the short selling firm and promoting an SEC investigation into the matter. The SEC then subpoenaed the reporters, but have said now — after a media uproar — that they will not enforce the subpoenas.
Despite the fact that he quotes a business journalism professor from UNC-Chapel Hill, Bigelow makes a couple of interesting points in his article.
Bigelow writes, “In the ensuing debate, Overstock’s president has displayed a gift for invective. He has described his foes on Wall Street as ‘miscreants’ and ‘mobsters’ in league with an unnamed ‘master criminal from the 1980s.’
“Byrne and his allies claim that hedge funds routinely ‘plant’ negative stories about Overstock.com and other companies in the press. They have denounced Greenberg and other journalists as ‘dishonest,’ ‘lickspittle,’ ‘crooks’ and ‘lapdogs.’
“Greenberg counters that there is nothing wrong with talking to hedge funds. When it comes to writing about publicly traded companies, with all their public relations resources, Greenberg says he ‘prefers flying red flags instead of green ones.’
“Other journalists note that James Chanos of Kynikos Associates, a private investment firm, took a short position in Enron â€“ and then shared his insights in 2001 with Fortune magazine. Another short-seller, David Tice of the Prudent Bear Fund, was among the first in 1999 to suspect accounting fraud at Tyco International under Dennis Kozlowski.”
Later, he quoted Greenberg as saying, “Much of my time is spent just looking a computer screens and reading material â€“ the transcripts of conference calls, press releases â€“ trying to make it all fit. People don’t have a clue how difficult this is. As a journalist, you’re under a lot of pressure, time pressure. And you’re going through the financial statements, getting calls out, trying to talk to people, trying to understand.”
And then this final part of the story: “The fact of the matter, Greenberg said, is that corporate executives don’t like journalists exposing problems in their operations.”
Read the article here.