MarketWatch’s Charles Jaffe busts a contributor to corporate cousin Fox Business for taking big bucks to tout penny stocks.
Jaffe reports that Tobin Smith took $50,000 to gush over a penny stock company called Petrosonic Energy. Smith apparently never mentioned the firm on Fox, but touted it in a new newsletter he’s putting out. Jaffe reports the tout helped push the firm’s shares up 20 percent last week:
And with Petrosonic up over 40% on a year-to-date basis and more than 135% in the last year, anyone who can’t see past the smiling face of the popular, charismatic Smith might think the stock really is “the investment opportunity of your lifetime,” as it’s described in the flyer.
For one, there’s the company’s lack of revenues, as in zero, according to filings, though Petrosonic did issue a press release late last week about how the company — which says it has a unique process for upgrading heavy oil — is now generating revenue from its plant in Albania.
Also overlooked in the hype are Petrosonic’s rising losses, negative cash flow and the “going-concern letter” from auditors who think there is “substantial doubt” in Petrosonic’s ability to survive. In its regulatory filings — where all of those conditions are readily evident — Petrosonic notes that the business will fail if it can’t generate adequate cash/financing; those concerns aren’t mentioned in Smith’s “special report.”
Media Matters has a very good follow, showing that Smith’s sellouts were hardly limited to Petrosonic and that he explicitly pushed his Fox celebrity to sell the stocks:
Smith also used his cable news credentials in emails. In one instance, Smith claimed he was giving readers information that he was prohibited from sharing with Fox News viewers: “Obviously, the time to acquire shares in Replicel is BEFORE the next Phase I/IIa human trial results hit the tape—which is why I am writing you today! This is JUST the kind of next big thing investment I’d LIKE to be able to talk about on Fox News…but I can’t. Replicel is too small (well at least for now) to share their exciting story with the 2 million investors who watch me every week on Fox’s Bulls & Bears (Fox’s rules, not mine.).”
These egregious lapses were too much even for Fox, which dropped Smith after MarketWatch’s report. Bravo to Jaffe and MarketWatch for outing this shill even though it embarrassed a fellow Murdoch property.
— The Orange County Register’s Charles Apple dings the Newhouses’ Harrisburg paper for flacking its new office in its own news pages:
I’m also critical of a decision by my friends at the Advance newspaper in Harrisburg, Pa., to place a story onto their Sunday front page about Advance combining its print and digital operations there into a new office space. Find the story at the bottom left.
I don’t see how an “innovative” new office space affects readers enough to merit the front page. If you must run it, put it inside or on the biz page, where it belongs.
This sounds awfully familiar to me.
No doubt putting a story about your new office on the front page of the paper is just extremely poor news judgment. Worse, it was part of a package of three—count ‘em—stories on the new office. Here’s one headline, which is representative of the embarrassing, gushing tone of the pieces:
PA Media Group staffers react to bold, colorful, wide-open new office space
But that’s not the worst of the flackery. “Vice President of Content” Cate Barron, who has seen her newsroom gutted by layoffs, has the gall to say this:
“At a time when many other media companies are pulling back or managing the decline … it’s an impressive example of how fully committed all are to the success of this bold, new venture,” Barron said.
Advance appears to value its interior decorators more than it does its journalists.
As Apple notes, the paper is so ill-staffed now it couldn’t even spell the name of its parent company correctly on its own front page.
— The Huffington Post doesn’t understand stocks and flows in this story on student loans. Here’s the lede:
Student loan debt is eating up a sizable chunk of recent college graduates’ paychecks, according to a new Congressional report. And that’s putting it mildly.
About two-thirds of graduates of the class of 2011 have college debt, and those students have an outstanding balance equivalent to about 60 percent of their annual income on average, according to a report from Congress’ Joint Economic Committee.