Weiss: Sharesleuth is still a bad idea

Forbes.com columnist Gary Weiss writes on his blog that investigative business journalism web site ShareSleuth.com, funded by billionaire Mark Cuban, shows again why it’s a bad concept. The site posted its first story in three months in the past 24 hours.

Cuban, if you remember, is shorting the stocks written about on the Web site by former St. Louis Post-Dispatch business reporter Chris Carey. But Weiss writes that the shorting hasn’t worked out this time.

Weiss wrote, “Sometime after Feb. 25, Cuban’s broker bought the shares back — the hated ‘buy-in.’ I imagine he realized some kind of profit on the shares he shorted at an average of $20, but he would have taken a loss on the shares he shorted over the winter.

“He certainly wasn’t able to keep the short position as long as he had wanted. Poor dear.

“My point is not to gloat (well, not entirely to gloat) but rather to point out that this so-called ‘business model’ ain’t working. You can’t reliably finance a ‘news operation’ by trading ahead of the stocks you write about. Cuban is proving it with his Utek buy-in imbroglio. Apparently you can’t make more than pocket change doing this.

“Still wanted is the public-spirited billionaire who will finance a financial investigations website without thought to personal profit. Does such a creature exist?”

Read more here.