So, while Farmwald and Cumming both have vested interests in ParkerVision—with Farmwald profiting from its decline and Cumming from its success—they are not equal observers. The crucial point is that Farmwald has expertise in the area he is criticizing and has backed his claims about ParkerVision with evidence; Alpert has given readers every reason to believe his estimate.
It’s worth dwelling on the point, even in a wire story that took only a few minutes to write, because it displays two unfortunate tendencies of the business press: to sell short-sellers short and, sometimes, to short-arm warranted criticism of business leaders.
Shorts have a vested and direct interest in a stock’s decline, this is true. It’s the other side to a long investor’s position.
Shorts play a useful and important role in rooting around for, and sometimes detecting, fraud—or at least over-hyped shares among the 10,000 or so publicly traded firms, especially the smaller ones. That’s why some business reporters, especially those with an investigative bent, use them regularly as sources, often with journalistically profitable results.
To be sure, short-sellers are outside the mainstream, and the field has attracted at least its fair share of quick-buck artists and sleaze bags. But an ethical short-seller is on the same moral plane as an ethical long investor.
Because of their interest, or their convictions, short-sellers and investors holding short positions sometimes use blunt language, like “worthless,” that sounds jarring to some reporters. Hence, an assessment that a stock is “worthless” automatically must be leavened with a view that it is not.
That’s fine, but that’s not what the Barron’s story said, and so the Reuters balance here is false.
Since when are reporters averse to blunt talk, anyway?
By the way, the headlines of both call Farmwald a “short-seller,” which is akin to saying, “Take this with a grain of salt.”
Again, we don’t like this characterization of Farmwald. But for the record, on the issue of short-sellers generally, we don’t disagree with a warning to readers, though we do also wonder if more warnings about longs are in order.
Here is an example of an alternate headline: “ParkerVision Shares Are Worthless According to Some Tech Savvy Investors—Barron’s.” This is from an outlet called MidnightTrader. We like this headline because Alpert has demonstrated that the couple’s expertise is more important than the short-selling. The problem we have with this MidnightTrader piece is that it doesn’t mention at all that Farmwald has shorted ParkerVision. That information doesn’t necessarily belong in the headline, but we should still know it.