Well, I am back, after being away from computers for almost a solid week - and I have to admit that it was very, very relaxing. However, the Bunny's important work has fallen behind, and we have to remedy that. So here are some tidbits of stuff that was in my inbox.
First, there was an article written by notorious hedge fund manager David Rocker, on January 10, 2005, in Barron's. Over a year ago, and just a few days into the formal publication of the Reg SHO Threshold list.
In it, he names four companies that he thinks sucks. They are OSTK, TASR, TZOO, and SIRI.
3 of the 4 were SHO list securities - TASR and TZOO were already on the list.
Isn't that something? And there were others, of course - AAII, PPD, KKD, NAVR, the most notable being his acknowledged short position in NFI - which was already on the list (and which just had its short interest published for March, coming in at an unprecedented 11.38 million shares) as well. Wouldn't it be fun to triangulate all his known short positions, and Gradient's bashes, and then see what percentage wind up on the SHO list? Maybe that can be this week's project - anyone? Want to start posting them, or email them to me, and I'll aggregate the results so that we can see what it all means, and look at the statistical likelihood of it all being innocent?
Now, there are likely all sorts of possible reasons and explanations for Mr. Rocker's amazing knack of being short companies that land on the SHO list. Far be it for me to cast stones. Could just be that it is all a coincidence. Could be.
I wonder if the subpoenas will cover his prescient abilities?
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I re-read Den of Thieves over the little trip, and all I have to say is that if you haven't read it recently, you should. It details exactly how a widespread criminal conspiracy was the endemic operating style for much of Wall Street in the 1980's, and it is striking how many of the same names are still active today. So for all the yuck yucks who speculate that there is no way that a wide-reaching evil could be pervasive on Wall Street, that the notion of a group of networked scumbags working in concert is a paranoid fantasy, I would direct you to Den of Thieves. It's all there, in black and white. And many of the miscreants got away with it. The sentiment then was that the whole street front-ran insider info, that attacks on companies (takeovers) were marvelous trading and profit building opportunities, and that the SEC was too dim and lazy to do anything about it, even though it was blatantly obvious in the trading.
Just change the word takeover for short attack, and there is the miscreant's ball. It happened then, and it is happening now. I was particularly struck by how many of the names are still active on Wall Street. I'm sure they have all changed their ways, and learned their lessons. After all, making $300 million and being forced to pay a fine of $100 million would teach anyone a lesson, right?
The question is really what lesson it taught...
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The Yahoo message boards are apparently losing thousands and thousands of messages. Or rather, the OSTK board is. None of the other boards are. One wonders if that is accidental, or whether it is deliberate? Of course it assumes that nobody downloaded the board on a regular basis in anticipation of lawsuits and the like (assuming that the record is being expunged)...
Odd times these.
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On another note, an article came out in San Diego today that painted Herb Greenberg as a victim, and evil OSTK a bully, for suing Gradient and Rocker Partners. It neglected to mention that a court found it to be a suit that was sound enough to go forward. It also neglected to mention that the affiants are not all embittered ex-employees who were fired. And it further mangles naked short selling, confusing it with legit short selling. And perhaps the most egregious blunder is that it takes the position that the SEC wants a peek at reporters' notes, rather than investigating collusion in a criminal conspiracy. Typical Type B article - waaaaahhhhhh, poor Gradient and Herb, waaaahhhhh, the mean old government is persecuting them.
Maybe it is just me, but that sounds an awful lot like the Milken defense - he was painted as a victim, really a good guy who loved minority children, and puppies, and God, who was being railroaded by the evil man. Of course it ignored that he was charged with 90-something counts of everything from stock manipulation, to tax issues, to pretty much every felony you can think of. He was just a deeply misunderstood fellow, apparently.
Huh.
Just like Herb, and Gradient, and Rocker, and Cohen.
Is it just me, or has nothing really progressed in the last 20 years?
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This just in - after reading my piece on the San Diego story which paints Herb and Gradient as victims and OSTK as an evil force, the CEO of Buyins.net sent me the following email - and it speaks for itself:
Reporters are not exposing the "truth" in Naked Short Selling scandal.
After the SEC financial journalist subpoena issue flared up, BUYINS.NET, a research firm providing purely factual statistical short sale and naked short sale data, made the unusual gesture of sending Overstock.com's short sale time/sale data to nearly 5,800 financial reporters and business editors free of charge. This "press pass", as it is called in the industry, was designed to put to rest, once and for all, the debate of whether Overstock.com had been illegally short sold or not, and to what degree this activity had occurred.
21.5% of business reporters in the US accepted the offer and reviewed the data. That is nearly 1,250 different reporters that took the time to review the following two charts:
http://www.buyins.com/ostk.gif
http://www.buyins.com/ostkshortdata.gif
Reporters like Bruce Bigelow of The San Diego Union Tribune engaged in multiple conversations with BUYINS.NET’s CEO, Tom Ronk, and were educated in detail as to the process and procedures involved with both legal short selling and illegal naked short selling. They were provided extensive factual data exposing the approximate size of the naked short position in Overstock.com and the exact volume and price of short sales in OSTK for every day back to January 1, 2005. The result? Nothing. Not one mention in Bigelow’s March 19th, 2006 article of the
BUYINS.NET stock exchange provided short sale time and sales transactions meticulously identifying every short sale entered in OSTK from January 1, 2005 to present.
The data, the details and the truth about short selling and naked short selling in shares of Overstock.com has continually been buried by the financial press. Would the one real reporter in the United States, please stand up, please stand up…..