When biz publications contradict each other

TheDeal.com executive Editor Yvette Kantrow takes a look at some recent business magazine coverage and points out that there are others in the business media world who have concluded something totally opposite.

Kantrow wrote, “A story in the latest issue of Fortune asks, ‘What’s trendy on Wall Street’? Its answer: shell companies, or Spacs — special acquisition companies that go public for the sole purpose of buying other companies. Proof of Spacs’ hotness is offered in the form of controversial clothier Dov Charney, who sold his company, American Apparel Inc., to a Spac in December. ‘His ad campaigns look more like nudie mags than the Neiman Marcus catalog,’ Fortune informs. ‘So it should come as no surprise that Charney has managed to take his company public using an edgy technique that, like some of his ideas, is fast becoming trendy.’

“Becoming trendy? Maybe not. Like the grungy layers of last fall, this trend might have already come and gone.

“According to a Feb. 12 story in The Wall Street Journal, blank-check companies (another name for Spacs), though having ‘achieved a tinge of respectability in 2006,’ are ‘unlikely to continue growing at the fast clip seen during the past two years.’ (In case you’re wondering, The Deal ran its own Spacs-are-hot story nine months ago.) The piece isn’t just anecdotal; it cites Dealogic data showing that Securities and Exchange Commission filings for blank-check offerings peaked in 2005 at 72 and that the backlog for new offerings is down 35% from the same point last year. Moreover, it notes that in recent months several Spacs have seen proposed acquisitions rejected in shareholder votes.

“So much for Fortune’s trend-spotting prowess. Meanwhile, Fortune and the WSJ collided again last week over Fortune’s cover story on Zillow.com, which estimates home values. While Fortune gushed over ‘how Zillow is turning online voyeurism into a real estate revolution,’ the Journal bluntly asked, ‘How Good Are Zillow’s Estimates’? The answer is often very good, but sometimes very, very bad.”

Read more here.