SI
SI
discoversearch

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor.  We ask that you disable ad blocking while on Silicon Investor in the best interests of our community.  If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

   Technology StocksTheStreet.com, Inc. (TSCM)


Previous 10 Next 10 
To: Rutgers who wrote (1761)12/29/2005 3:09:37 PM
From: bob wallace
   of 1821
 
for the first time in 2 years, TSCM hasn't offered me a discount subscription rate when my subscription expired - guess that's what a 2 bagger on the stock will do for you

Share RecommendKeepReplyMark as Last ReadRead Replies (1)


From: StockDung12/30/2005 9:59:17 AM
   of 1821
 
StockGate Today: Regulation SHO Results Leave Questions More Than Answers / FinancialWire®

December 30, 2005 (Financial Wire) (By David Patch) On January 7, 2005, the first Regulation SHO threshold lists were published representing companies with excessive oversold securities into the markets. Each company published achieved a threshold greater than 0.5% of the issues outstanding in trade settlement failures.

December 30, 2005 (Financial Wire) (By David Patch) On January 7, 2005, the first Regulation SHO threshold lists were published representing companies with excessive oversold securities into the markets. Each company published achieved a threshold greater than 0.5% of the issues outstanding in trade settlement failures.

On the first published lists were companies such as Taser (NASDAQ: TASR), Allied Capital Corp. (NYSE: ALD), Novastar Financial (NYSE: NFI), and Travelzoo (NASDAQ: TZOO).

What made those companies unique is that while each was from a separate business sector, each held a common trail of similarities. For example, all had a mysterious Federal investigation initiated into the accounting records or representations made by company executives. Investigations that eventually closed without cause. And each had David Rocker and Hedge Fund Rocker Partners reportedly short the stock.

David Rocker?s short positions were not limited to just these three Regulation SHO threshold stocks. Rocker was also reportedly holding short aaiPharma (NASDAQ: AAII), Overstock.com (NASDAQ: OSTK), Krispy Kreme (NYSE: KKD); and Take-Two Interactive (TTWO), among those we know of. For each of these stocks, all but Take-Two Interactive have staunchly held a position on the Regulation SHO threshold security publication for excessive trade settlement failures. As for Take-Two, they just concluded the ordeal of an SEC Investigation into accounting practices. No action taken by the SEC.

When the SEC released Regulation SHO in June of 2004, a special ?grandfather clause? was drafted into the regulation allowing for all outstanding settlement failures to be immune from the mandatory closeout provisions of the new rule. While this contradicts the bylaws passed down by Congress in the Exchange Act of 1934, the SEC claimed this clause would prevent any possible buy-side volatility associated with the covering of large blocks of fails. The SEC never considered nor addressed sell-side volatility in the rule-making provisions.

This past week, Wall Street Journal reporter Karen Richardson discussed the stellar performance turned in by Hedge Fund manager David Rocker in 2005. The article identified a near 50% return, after fees, in the fund managed by Rocker. The article unknowingly also brought insight into Regulation SHO.

According to Richardson, Rocker Partners started 2005 with a net short position of 60%. By my calculations that equates to an 80% short position 20% long position in the fund. Richardson also reports that Rocker will close out this year at a net 10% short position, 55% short 45% long. This represents a significant buy-side investing strategy that Rocker undertook in 2005. Was it timed with the release of Regulation SHO?

Richardson reported that Rocker?s major profits came from covering some of his short holdings in issuers such as Krispy Kreme, Take-Two, and Tempur-Pedic.

Looking back on the investments Rocker reportedly held, the SEC investigations and results, and the Regulation SHO list, I would say that Rocker was not only smart, he was extremely lucky.

Federal investigations announced against Rocker Shorts Allied Capital, Taser, Take-Two Interactive, Travelzoo, and Novastar yielded ?no cause? actions by the authorities by year?s end. The damage was already done. Allied Capital went so far as to publicly identify that the investigation into the company was initiated based on repeated complaints by short sellers over accounting practices. As for the performances, Taser is down 75%, Take-Two is down 50%, NFI is down 42%, Travelzoo is down 76%, and Allied Capital is up 20% for 2005. Travelzoo was actually honored by Forbes Magazine as being one of the top 200 small businesses in America, but it is still down 76%.

Rocker?s other reported SHO shorts also had horrendous years as aaiPharma wound up losing 99.6% in 2005 after filing for Chapter 11 bankruptcy, Krispy Kreme is down 52%, and Overstock has had an abysmal 57% loss since January 2005.

As all these companies have David Rocker being short in common, each has also resided primarily on the Regulation SHO threshold list for greater than 90% of this trading year. Only Allied Capital and Take-Two have not been on the list for that window of time. Ironically, Allied Capital is the only company within the entire bunch that has yielded an investor profit on the year with all others exceeding 40% in losses. All others!

Talk about your stock pickings.

I asked Ms. Richardson about this complicated but circumstantial picture and whether she had any opinion as to whether settlement failures could any way relate to the performance Rocker Partners returned to its client base. Ms. Richardson either became confused over the data or wanted to ignore it as she failed to respond. She has not been alone.

The media has vilified CEO Patrick Byrne of Overstock.com over his battle with the illegal short selling that has nested his company on Reg SHO?s threshold list for much of this trading year and for what he has identified as a systemic problem in the markets.

Instead of investigating such concerns over possible systemic abuse CNBC?s Joe Kernen earlier this month asked Byrne why he didn?t simply leave the shorts alone, claiming ?they can go after any stock they want in America.? I am not sure that is something good, but have at it, Joe.

Kernen, having access to communications between Byrne and his broker, in which Byrne?s broker admits they can?t settle the trades because there are no shares available in the market, avoided the conversation on the evidence. As expected, Kernen has never asked the institutions that frequent his show why they do not simply settle the trades and leave Overstock.com and other issuers alone. Be done with this mess and settle the trades.

Likewise Jim Cramer, CNBC?s host of Mad Money and the largest shareholder of theStreet.com, found time to fodder Byrne in a Realmoney.com article over Byrne?s management skills, citing too much of the CEO?s efforts have been against abusive short sellers. Byrne?s focus on the short sellers has become a detriment to insuring profitable business operations, according to Cramer.

Ironically Cramer, a self-proclaimed short seller extraordinaire, brought his own company public in 1999 at an offering price of $70.00 a share. Since 1999 theStreet.com has had a performance others would term ?a pig.? While TSCM is presently trading at $7.00 on takeover rumors, it was not that long ago that TSCM was trading sub $1.00 levels. Cramer?s profits in the IPO far exceed the return he has provided to his shareholders. Cramer should be CEO of the year just for that.

Who is the second largest single shareholder in this ?pig? called theStreet.com? None other than?you guessed it?David Rocker.

Oh the irony.

It is no wonder Kernen, Cramer, and others fail to understand the nature of the beast we have before us. Laziness, conflicts, and a desire to keep the mainstream sponsors appeased have resulted in media coverage that is sanitized for a certain investing class. The wealthy buy the subscriptions, not the average Joe. The media must keep subscriptions up and to do so must avoid confrontation with the readers.

As for the Securities and Exchange Commission and Regulation SHO, more questions have come from 2005 than answers. While the commission remains silent in confusion and purposeful avoidance, the manipulation on concerted stocks remain at a detriment to our global economy. Small businesses are being destroyed, as are those investors not connected enough to be protected from the abuses.

Who has financially benefited from these issuers and others nestled dormant on the threshold lists with excessive settlement failures while the market capitalizations in the securities listed get trashed? How is it that with new rules that require closeouts in settlement failures (buy-side pressure) are put in place, and major short positions are being closed out (buy-side pressure) the stocks still tank on convenient sell side volumes?

All those forced buyers and everybody is a seller.

I personally would like to know how much profit went into the hands of David Rocker and the wealthy clients of Rocker Partners because of short positions that knowingly or unknowingly may have resided as excessive settlement failures in localized securities. Settlement failures the SEC themselves admit create the added leverage to drive down the value in a security.

How much of the SEC?s actions to protect those that conducted trading strategies, including heavily selling securities into settlement fail, resulted in investor financial ruin? How much of that financial ruin was merely a means to divert the wealth of the average investor into the wealthy Hedge Fund pools and the greedy clientele they administer to?

Whether smart or just plain lucky, it was awfully convenient for this hedge fund to have found the pot at the end of the rainbow that was filled with aiding SEC investigations, free passes handed out by the Federal Government to settlement failures, and mainstream media so eager to overlook the obvious questions.

Someday maybe somebody of importance will look into who owned the fails that hold these companies on the SHO list forever. When they do look, maybe they can focus on who is ?working the stocks? to insure that those fails are closed for a profit and not a loss.

Maybe, just maybe, the two are interrelated.

(David Patch, editor of Stockgate Today, an electronic newsletter, and whose Web site is investigatethesec.com, has been a vocal critic of manipulative naked short sales, and over the past two years has been quoted extensively in several national publications. He has appeared on numerous financial news programs, including with Ron Insana on CNBC. Stockgate Today provides editorial commentary on events surrounding the naked short selling issues and is carried here as a public service and do not necessarily reflect the views of the editors at FinancialWire.).

For up-to-the-minute news, features and links click on financialwire.net

FinancialWire is an independent, proprietary news service of Investrend Information, a division of Investrend Communications, Inc. It is not a press release service and receives no compensation for its news or opinions. Other divisions of Investrend, however, provide shareholder empowerment platforms such as forums, independent research and webcasting. For more information or to receive the FirstAlert daily summary of news, commentary, research reports, webcasts, events and conference calls, click on investrend.com

For a free annual report on a company mentioned in the news, please click on investrend.ar.wilink.com

The FinancialWire NewsFeed is now available in multiple formats to your site or desktop, free. Click on: investrend.com

Share RecommendKeepReplyMark as Last Read


From: StockDung12/30/2005 10:09:09 AM
   of 1821
 
THESTREET.COM WRONGFULLY ATTACKED tinyurl.com

Share RecommendKeepReplyMark as Last Read


To: bob wallace who wrote (1762)1/3/2006 4:01:12 PM
From: Rutgers
   of 1821
 
Bob, it looks like someone is getting even with TSCM because they didn't offer you the discount rate ;) Of course, the OBV is not out the window, but it will be interesting to learn if any of the Insiders sold today. No one sold any last week.


for the first time in 2 years, TSCM hasn't offered me a discount subscription rate when my subscription expired - guess that's what a 2 bagger on the stock will do for you

Share RecommendKeepReplyMark as Last ReadRead Replies (1)


To: Rutgers who wrote (1765)1/5/2006 1:06:32 PM
From: bob wallace
   of 1821
 
take alook at POT and see what you think - very early....

Share RecommendKeepReplyMark as Last ReadRead Replies (1)


From: StockDung1/6/2006 9:52:23 AM
   of 1821
 
ESSARY TRYS TO PATCH THINGS UP WITH JAMES CRAMER AND THESTREET.COM. YUK. YUK YUK...

---------------------------------------------------
"FinancialWire, which had republished the Stockgate Today articles under Patch?s byline, removed them from its website after Patch, the author, withdrew them."

===================================================
Cramer Hasn?t Shorted Anything Since 2000; Has Never Sold A Share Of TheStreet.com / FinancialWire®

January 6, 2006 (FinancialWire) James Cramer, the ?Mad Money? guy at General Electric?s (NYSE: GE) CNBC and co-founder of TheStreet.com (NASDAQ: TSCM) has not shorted a stock since retiring from his hedge fund at the end of 2000, and he is prohibited from shorting stocks since 2001 under CNBC?s editorial policy, according to TheStreet.com General Counsel Jordan Goldstein. Cramer has also not sold a single share of TheStreet.com, said Goldstein.

January 6, 2006 (FinancialWire) James Cramer, the ?Mad Money? guy at General Electric?s (NYSE: GE) CNBC and co-founder of TheStreet.com (NASDAQ: TSCM) has not shorted a stock since retiring from his hedge fund at the end of 2000, and he is prohibited from shorting stocks since 2001 under CNBC?s editorial policy, according to TheStreet.com General Counsel Jordan Goldstein. Cramer has also not sold a single share of TheStreet.com, said Goldstein.

These revelations came in a letter from Goldstein to David Patch, whose Stockgate Today articles of December 29 and January 1, at investigatethesec.com, became involved in a controversy after Cramer claimed Patch, in his articles, defamed him. Intertwined in all this is notorious short-seller David A. Rocker, whose most recent 13F filings show significant positions in Overstock.com (NASDAQ: OSTK) and Taser International (NASDAQ: TASR), among many others, along with ownership of 2,220,810 shares of TheStreet.com, just slightly less that Cramer?s own holdings of 2,412,246.

Rocker holds 8.77% of the company?s shares, valued at roughly $9,280,000. Only Cramer?s and Clark Estates holdings exceed his ownership level.

Some claim that Rocker is a significant reason many companies are on the Regulation SHO list, which the government has mandated to demonstrate the pervasiveness of fails-to-deliver.

Rumors have been circulating that TheStreet.com might have a buyer in the wings. Cramer, a co-founder, no longer serves as its CEO. It went public in May 1999 at $19 a share, traded up to $70 a share and after the rumors surfaced, recently has been trading in the $7 range after having slid to around $6.50 a few days ago.

FinancialWire, which had republished the Stockgate Today articles under Patch?s byline, removed them from its website after Patch, the author, withdrew them.

Patch is a well-known critic of the manipulative trading practices known as naked short selling, and Cramer has suggested the practice either doesn?t exist or is not as widespread as Patch and others, including Overstock CEO Patrick Byrne, believe it to be. The argument has grown more heated recently, and feathers ruffle more easily.

Byrne and Cramer have recently exchanged unpleasantries, and Cramer has ridiculed Byrne at TheStreet.com, especially in light of Overstock?s recent tumbles.

Byrne, on behalf of Overstock has sued Rocker Partners along with Gradient Analytics for conspiring together, basically writing reports that were negative but holding them back until Rocker, an acknowledged short-seller, could position ahead of their release.

In its most recent court filings of January 3, found at shareholder.com, Overstock states that David Rocker and Marc Cohodes via Rocker Partners, Rocker Offshore Management and Rocker Management, ?profit by selling the stock of a publicly-traded company that they do not own and then having the price of that company?s stock decline.?

The suit notes that Rocker subscribed to Gradient, at a cost of $40,000 per year to include Gradient in their campaign to drive down Overstock?s stock price, and claims that reports were false, and that ?the content and timing of those reports were actually dictated? by Rocker. This allowed Rocker, the suit alleges, ?time to position their portfolios to benefit from negative analyses the Rocker Defendents and Gradient published, under the guise of an independent report, regarding Overstock.?

This is where the ?thick plottens,? as the saying goes.

Gradient was previously named Camelback Research. An August, 2005 declaration by Camelback research subscription salesman Robert Ballash that is associated with the lawsuit states that Camelback/Gradient?s marketing material specify that ?the customer has the opportunity to influence the reports? prepared by the provider, and that ?it was very apparent to me that Rocker Partners either had a short position in the shares of Overstock or that he intended to be short prior to the Camelback reports? publication.?

TheStreet.com is not named in the Overstock lawsuit, but Ballash said in his affidavit that Herb Greenberg, then an editor at TheStreet.com, was a regular who ?logged in to review recent research reports.? At one point, he stated, ?Brian Harris, an editor of TheStreet.com, was retained by Camelback to draft research reports on particular companies.? He said he was listed as associate editor of Street Insight, a major hedge fund information component of TheStreet.com, and that there was no disclosure as to Harris? moonlighting at Camelback/Gradient.

Other reports stated that Harris? name disappeared from TheStreet.com website very quickly after the affidavits were first published by TheDeal, Motley Fool and FinancialWire. FinancialWire has no independent corroboration for this alleged event, but Goldstein did not respond to an inquiry about it, although he responded to virtually every other communication.

Ballash also said that Camelback/Gradient opened a ?special office in Seattle, Washington? for Harris and another individual.

Another affiant, former employee Demetrious Anifantis, had a similar recollection, and stated that ?it appeared to me that Rocker, Vickery (Gradient principal) and Greenberg were coordinating their attacks on Overstock,? and that Vickery and Greenberg ?coordinated the content and timing of their various reports on Overstock to please Rocker.?

Many of these allegations have been denied by those named.

A spokesperson said FinancialWire was not involved in the research, or writing of the Patch articles, however; and with no independent corroboratons of any statements that may have been made, is unable to comment on them or Goldstein?s letter. Thus it was decided to publish the Goldstein letter in its entirety, in the perspective of the intertwining of relationships and allegations described in the filings above.

Goldstein?s letter to Patch follows:

David Patch

Author

Stockgate Today

I am the General Counsel of TheStreet.com, Inc. (?TheStreet.com?), which publishes, among other things, articles by James J. Cramer, a columnist and our co-founder, Michael Comeau and William Gabrielski, both research associates. I write to you regarding two articles you have written in your online newsletter Stockgate Today, the first entitled ?Regulation SHO; Results Leave Questions More than Answers,? which is dated December 29, 2005, and the second ?If Short Sellers are so smart, why do they need to cheat to succeed?? which is dated January 1, 2006. Your newsletter appears to be published on a web site that you control, <investigatethesec.com>, and distributed by Investrend Communications, Inc,, a company controlled by Gayle Essary. These articles contain numerous factual inaccuracies and misleading characterizations and insinuations, which should be promptly and fully retracted.

The December 29th article begins as a discussion of the Regulation SHO threshold lists and rapidly descends into a conclusory attack on short sellers, in particular Rocker Partners, the hedge fund managed by David Rocker, and then into a hatchet job against Mr. Cramer and TheStreet.com. After noting that Mr. Cramer criticized Patrick Byrne, CEO of Overstock.com, Inc., for focusing too much on his campaign against short sellers rather than his business, you go on to describe Mr. Cramer as ?a self-proclaimed short seller extraordinaire,? as a way of linking him rhetorically to the short sellers you have just vilified. In fact, Mr. Cramer never so proclaimed himself. Cramer Berkowitz, the hedge fund he managed from 1987 to 2000, was primarily a long fund. But far more important, he has not shorted a stock since retiring from his hedge fund at the end of 2000 and in fact has been prohibited from shorting stocks since 2001 under CNBC?s editorial policy. You use these and other false statements in the January article to create a false and misleading picture of the activities of Messrs. Cramer, Comeau, Peltier and Gabrielski, painting them as short sellers who ?gang up to achieve success.? Since none of them is permitted to sell short, and only Mr. Cramer is permitted to trade individual securities at all (and even then, under strict trading restrictions), this characterization is misleading, particularly given the false light in which you cast short sellers in the two articles. Your statement that Mr. Comeau ?admit[ed] to ganging up on Overstock? is false as well. You should review the record of public commentary in TheStreet.com?s publications concerning Overstock. Mr. Comeau made a grand total of one public comment on the company, a post on December 28, 2005 in which he pointed to a study showing that firms taking anti-shorting action have tended to perform poorly in the subsequent year.

You also assert in the December article that Mr. Cramer ?brought his own company public in 1999 at an offering price of $70.00/share? and that ?Mr. Cramer?s profits in the IPO far exceed the return he has provided to his shareholders.? You make similar statements in the January article, asserting that the Company ?went IPO in May 1999 at $70.00/share and hasn?t seen an upside since? and that we?ve suffered a ?90% market loss? since going public.? These statements are completely false. In fact, TheStreet.com?s public offering price was $19.00, not $70.00, and while there can be no doubt that some fortunate few may have been able to reap profits by selling their stock at or near the high of $70.12 on the day of the IPO, or at some lower price since that time, Mr. Cramer could not be among them, since he has never sold a single share.

But facts do not deter you from using guilt by association, rhetorical questions and other devices to create the misleading impression that you?ve got the goods on ?Jim and the boys,? as you cavalierly call them. After your false recitation of TheStreet.com?s alleged IPO misdeeds, you point out that ?For the record Peltier never responded to any of the exchanges and Gabreilski [sic] responded by asking to be removed from the communication thread,? as if their responses were the result of a successful argument on your part instead of frustration over your insistence on making baseless accusations. Similarly, after a cursory description of the late trading/market timing scandals, particularly the malfeasance of hedge fund manager Israel Englander, you ask your readers (as you did in the article?s title) why a billionaire hedge fund manager would need to ?cheat to succeed,? and again attributed the lack of response to this rhetorical question to your having made a successful argument, that you ?had them there.? These insinuations are deeply misleading. TheStreet.com?s employees, even one who is a former hedge fund manager, could not possibly know why Israel Englander engaged in illegal late trading abuses. Furthermore, as you well know from your email exchanges with them, they made a good faith effort to engage in a dialogue with you until your offensive insinuations and accusations caused that dialogue to deteriorate and they simply stopped responding.

It is clear from reviewing the email exchanges and the two articles, as well as the rest of your website <investigatethesec.com> and Investrend?s publishing of your newsletter, that you and Mr. Essary have an agenda, which is to rally the investing world?s attention to the evils you believe are caused by so-called naked short selling, particularly as allegedly practiced by short-selling hedge funds such as Rocker Partners. The California courts have yet to rule on the claims brought by Overstock against Rocker Partners and others. But regardless of their merits (and I think it is curious that the lawsuit does not include any allegations that defendant Rocker Partners engaged in naked shorting of Overstock), these claims do not involve TheStreet.com, as even Mr. Byrne has publicly admitted. And while you are of course free to use the presses to persuade others to your viewpoint, you may not, without consequence, defame others in so doing.

In an email to me this afternoon, you agreed to remove the December article from your website pending your review of our comments, and claim that your goal is not to defame anyone with ?purposeful intent.? Unfortunately, your actions belie that claim. Although you were advised more than once in your email exchanges with Mr. Cramer and the others that much of your information was wrong and your accusations baseless, you nevertheless went ahead and published anyway. Such reckless disregard for the truth of the statements you published is the very definition of ?actual malice? under New York Times Co. v. Sullivan, 376 U.S. 254 (1964), and its progeny.

On behalf of Mr. Cramer and TheStreet.com, I hereby demand that you immediately cease and desist from publishing further false or misleading statements about Messrs. Cramer, Comeau, Peltier and Gabrielski, and issue a prompt and full correction of the false statements, characterizations and insinuations I have detailed above. Your retraction must be full and unqualified, and given the same prominence as the initial publication. Furthermore, if you persist in stating, directly or by implication, that any of the above individuals are shorting stocks or are part of a ring of short sellers, we will bring legal action against you to set the record straight.

Your continued publication of false and misleading statements following your receipt of this letter may expose you to punitive and/or exemplary damages under libel and other related laws, in addition to payment of attorneys? fees and costs for TheStreet.com and Messrs. Cramer, Comeau, Peltier and Gabrielski.

Please confirm to me, within five (5) days of your receipt of this letter, that you will fully and promptly retract your false and misleading statements, characterizations and insinuations. This letter is without prejudice to any of TheStreet.com?s or Messrs. Cramer, Comeau, Peltier and Gabrielski?s rights or remedies at law or in equity, all of which are specifically reserved. [END OF LETTER.]

Despite FInancialWire?s disclaimer in each article that Patch?s views are his own, and are not necessarily shared by FinancialWire or its publishers, Goldstein persisted in identifying the FinancialWire publisher as personally allied with Patch in a common ?agenda,? which he said is ?to rally the investing world?s attention to the evils you believe are caused by so-called naked short selling.?

When told these statements, unproven, bring discredit to the journalistic integrity of FinancialWire and defame its publisher at a personal level, Goldstein softened his allegation to ?you share Mr. Patch's agenda of seeking to rally attention to what you see as the problem of naked short selling,? but never explained how he was able to determine the ?personal views? of the publisher through the publication of a columnist?s views, in which even the accompanying disclaimer stated it was not.

The sole purpose of FinancialWire is to distribute news and views, and items are not censored to fit the views of the editors or publishers. Goldstein was told if he wishes to publish conflicting views, FinancialWire?s distribution is available for him to do that.

He did not respond to the invitation.

For up-to-the-minute news, features and links click on financialwire.net

FinancialWire is an independent, proprietary news service of Investrend Information, a division of Investrend Communications, Inc. It is not a press release service and receives no compensation for its news or opinions. Other divisions of Investrend, however, provide shareholder empowerment platforms such as forums, independent research and webcasting. For more information or to receive the FirstAlert daily summary of news, commentary, research reports, webcasts, events and conference calls, click on investrend.com

The FinancialWire NewsFeed is now available in multiple formats to your site or desktop, free. Click on: investrend.com

Share RecommendKeepReplyMark as Last Read


From: StockDung1/6/2006 7:55:35 PM
   of 1821
 
Tables Turned, Cramer Claims Defamation Over Dave Patch Comments In Stockgate Today / FinancialWire®

January 4, 2006 (FinancialWire) James Cramer, the ?Mad Money? guy at General Electric?s (NYSE: GE) CNBC and co-founder of TheStreet.com (NASDAQ: TSCM) is best known for his ascerbic attitude, quick retorts and no-holds-barred commentary about public figures, CEOs and public companies. But naked short gadfly Dave Patch has succeeded in getting his goat and Cramer clearly does not relish it when the tables are turned.

January 4, 2006 (FinancialWire) James Cramer, the ?Mad Money? guy at General Electric?s (NYSE: GE) CNBC and co-founder of TheStreet.com (NASDAQ: TSCM) is best known for his ascerbic attitude, quick retorts and no-holds-barred commentary about public figures, CEOs and public companies. But naked short gadfly Dave Patch has succeeded in getting his goat and Cramer clearly does not relish it when the tables are turned.

Because Patch?s article apparently appeared in FinancialWire, despite FinancialWire?s disclaimer that Patch?s views do not necessarily match those of FinancialWire?s, Cramer has threatened it as well. The emails were flying Tuesday. At the end of the day, even Overstock?s (NASDAQ: OSTK) CEO Patrick Byrne, whom Patch had copied, told Cramer he plans a ?little talk about you,? and asked Cramer what his ?sensibilities? are so as not to further hurt the television commentator?s feelings.

The tongue-in-cheek appeared to be tit-for-tat after Cramer?s recent column ?praising? Byrne.

Despite requests to do so, Cramer did not respond to a FinancialWire invitation to identify what Patch had said that ?defamed? him, as he had claimed, saying only that a ?reckless disregard for the truth? constitutes libel.

TheStreet.com General Counsel Jordan Goldstein in a separate email promised, ?I will provide, in short order, a list of the many factual inaccuracies and unsupported insinuations contained in the Patch article. Criticism is one thing; libel is quite another.?

At press time, the list had not been received, but FinancialWire has offered space as needed for Cramer & Company to recover his reputation or get his point across, whichever he or his attorney chooses. FinancialWire is also awaiting Cramer?s identification of the article or language that upset the applecart.

At the heart of the heat is naked short sales, which Cramer more or less claims is ?in your head,? and which Byrne believes could be the ?greatest financial scandal to hit our market system in the last hundred years.?

Patch?s website is investigatethesec.com . He recently received recognition by the multi-state task force investigating naked short sales when the head of the task force, Connecticut regulator Ralph Lambiase, credited Patch with bringing the manipulative trading practice to the regulator?s attention, and he appeared as well on CNBC.

Cramer?s final take, inexplicably after receiving a ?cc? in a thread started by his own counsel: ?Please stop cc?ing me.?

For up-to-the-minute news, features and links click on financialwire.net

FinancialWire is an independent, proprietary news service of Investrend Information, a division of Investrend Communications, Inc. It is not a press release service and receives no compensation for its news or opinions. Other divisions of Investrend, however, provide shareholder empowerment platforms such as forums, independent research and webcasting. For more information or to receive the FirstAlert daily summary of news, commentary, research reports, webcasts, events and conference calls, click on investrend.com

The FinancialWire NewsFeed is now available in multiple formats to your site or desktop, free. Click on: investrend.com


Share RecommendKeepReplyMark as Last Read


From: StockDung1/7/2006 4:54:20 PM
   of 1821
 
James Cramer/David Patch/Stockgate Today/INvestrend Communications/thesanitycheck.com

thesanitycheck.com

From: James Cramer
Sent: Tuesday, January 03, 2006 5:52 AM
To: David Patch
Subject: RE: Cramer, Rocker, Overstock.com

At this point, because you have chosen to defame me all correspondence will be through lawyers. I am very sorry.. but a reckless disregard of the truth­is libel even for public figures. Have a nice day. Please send me the address of 1. Stockgate Today, INvestrend Communications, thanks.jjcramer

-------------------------------------------------
From: XXXXXXX / (name)
Sent: Tuesday, January 03, 2006 9:33 AM
To: Jim Cramer
Subject: Re: FW: Cramer, Rocker, Overstock.com

=== Jim, how are you? Enjoy your show although it is a bit frenetic for me. I like that other one, too, "Deal or No Deal."

David Patch, who you may know is an aggrieved shafted shareholder turned commentator and SEC critic, is provided space in FinancialWire to contribute a periodical column on the subject of naked short sales. FinancialWire does not censor its contributors, as I'm sure you do not censor TheStreet.com contributors.

I'm also assuming CNBC does not censor you.

In each "Stockgate Today" column, there is a disclaimer that the opinions expressed do not necessarily reflect the opinions of FinancialWire or its publishers. As Dave knows, we have disagreed with various of his conclusions in the past. I have not thoroughly reviewed the piece regarding your claim of "libel" but will be glad to do so if you will send it to me and point out the specific language that you feel defames you.

FinancialWire is published by Investrend Information, a division of Investrend Communications, Inc., and it is protected by the First Amendment, as are its editors and contributors.

There are public figures and there are PUBLIC figures. You fall into the latter category, and a substantial part of your public personna is to sharply, harshly and without reservation criticize other public figures and entities, sometimes to the point of ridicule. Your criticism of Mr. Patch would seem to be one of those instances former President Truman was talking about when he remarked about heat, kitchens and fire.

You have also opened the door for fair comment with your publication of column after column critical of the very issues that Mr. Patch espouses.

It is inconceivable that you would seriously contemplate damaging your own public personna, in effect, as the "sticking it to the man" commercial moralizes, libeling yourself by showing that you can dish out but not take criticism. However, that is your decision to make.

cyberlibel.com

Nevertheless, FinancialWire stands prepared to offer you whatever space you need to correct any inaccuracies, point out any defamations you perceive to have been made, disagree with statements made, or to take issue with any positions taken.

Fire away when ready.

Best ... (name)

-------------------------------------------------
From: James Cramer
Sent: Tuesday, January 03, 2006 09:38 AM
To: (name)
Subject: RE: Cramer, Rocker, Overstock.com

Please make no attempts to contact me personally, all correspondence must be through our lawyers. The First Amendment does not protect any news organization from malicious and patently false statements. Once again, if an entity that calls itself a news entity is put on notice that something is patently false, the standard of libel applies to even public figures. . Please talk to your attorney and please do not attempt to contact me again
jjc

-------------------------------------------------
From: XXXXXX / (name)
Sent: Tuesday, January 03, 2006 8:05 AM
To: James Cramer

=== Jim, my note was as close to warm and fuzzy as I could get under the circumstances where you are threatening. If you want to throw out all pleasantries and persist in legal mumbo-jumbo, I don't need to hear that. Please direct that to:

YYYYYYYY, P.C.
ATTORNEY AT LAW

Share RecommendKeepReplyMark as Last Read


From: StockDung1/10/2006 10:17:36 PM
   of 1821
 
STOCKGATE TODAY, On to the revised Article!!

===============================================

investigatethesec.com

STOCKGATE TODAY
An online newspaper reporting the issues of Securities Fraud


Regulation SHO; Results Leave Questions More than Answers (corrected) – January 4, 2006
David Patch


(Note: The Original December 29th Article has been revised based on a response from Jim Cramer and his attorney claiming defamation of character. Mr. Cramer and his attorney had promised a response by end of business today as to what exactly that defamation was but that response never materialized. I had notified the attorney that I would pull the December Article today out of respect for Mr. Cramer yet respect was never afforded back. While I remain unsure of exactly what it was that Mr. Cramer claims was truly defamatory, I did find an error in my presentation of the position Mr. Cramer held at the time theStreet.com went public in May 1999. I have corrected that error as well as the implication that he was responsible for the miserable performance in the stock, and the loss to shareholders, as CEO. Mr. Cramer was not CEO of theStreet.com at the time of the offering. I can only believe that since Mr. Cramer and his attorney have had ample time to respond to several inquiries on the alleged defamation by myself and Financialwire, and have failed, they have assumed that the bully tactic to threaten me had solved Mr. Cramer’s personal issue with criticism received vs. criticism given. On to the revised Article)





On January 7, 2005 the first Regulation SHO threshold lists were published representing companies with excessive oversold securities into the markets. Each company published achieving a threshold greater than 0.5% of the issues outstanding in trade settlement failures. On the first published lists were companies such as Taser (NASDAQ: TASR), Allied Capital Corp. (NYSE: ALD), Novastar Financial (NYSE: NFI) and Travelzoo (Nasdaq: TZOO).



But what made Taser, Novastar, Travelzoo, and Allied Capital somewhat unique is that while each company was from a separate business sector, each held a common trail of similarities. For example, each of the three companies had a mysterious Federal Investigation initiated into the accounting records or representations made by Company executives. Investigations that eventually closed without cause. And, each had David Rocker and Hedge Fund Rocker Partners reportedly short the stock.



David Rockers short positions were not limited to just these three Regulation SHO threshold stocks however.



Rocker was also reportedly holding short aaiPharma (NASDAQ: AAII), Overstock.com (NASDAQ: OSTK), Krispy Kreme (NYSE: KKD); and Take-Two Interactive (TTWO) among those we know of. For each of these stocks all but Take-Two interactive has staunchly held a position on the Regulation SHO threshold security publication for excessive trade settlement failures. As for Take-Two Interactive, they just concluded the ordeal of an SEC Investigation into accounting practices. No action taken by the SEC.



When the SEC released Regulation SHO in June of 2004 a special “grandfather clause” was drafted into the regulation allowing for all outstanding settlement failures to be immune from the mandatory closeout provisions of the new rule. While this contradicts the bylaws passed down by Congress in the Exchange Act of 1934, the SEC claimed this clause would prevent any possible buy-side volatility associated with the covering of large blocks of fails. The SEC never considered nor addressed sell side volatility in the rule-making provisions.



This past week Wall Street Journal reporter Karen Richardson discussed the stellar performance turned in by Hedge Fund Manager David Rocker in 2005. The article identified a near 50% return, after fees, in the fund managed by Rocker. The article unknowingly also brought insight into Regulation SHO.



According to Richardson, Rocker Partners started 2005 with a net short position of 60%. By my calculations that equates to an 80% short position 20% long position in the fund. Richardson also reports that Rocker will close out this year at a net 10% short position, 55% short 45% long. This represents a significant buy-side investing strategy that Rocker undertook in 2005. Was it timed with the release of Regulation SHO?



Richardson reports that Rockers major profits came from covering some of his short holdings in issuers such as Krispy Kreme, Take-Two, and Tempur-Pedic for example.



Looking back on the investments Rocker reportedly held, the SEC Investigations and results, and the Regulation SHO list, I would say that Rocker was not only smart, he was extremely lucky.



Federal Investigations announced against Rocker Shorts Allied Capital, Taser, Take-Two Interactive, Travelzoo, and Novastar yielded ‘no cause’ actions by the authorities by years end. The damage was already done. Allied Capital went so far as to publicly identify that the investigation into the Company was initiated based on repeated complaints by short sellers over accounting practices. As for the performances, Taser is down 75%, Take-Two is down 50%, NFI is down 42%, Travelzoo is down 76%, and Allied Capital is up 20% for 2005. Travelzoo actually being honored by Forbes Magazine, as with being one of the top 200 small businesses in America but it is still down 76%.



Rockers other reported SHO shorts also had horrendous years as aaiPharma wound up losing 99.6% in 2005 after filing for Chapter 11 Bankruptcy, Krispy Kreme is down 52%, and Overstock has had an abysmal 57% loss since January 2005.



As all these companies have David Rocker being short in common each has also resided primarily on the Regulation SHO threshold list for greater than 90% of this trading year. Only Allied Capital and Take-Two have not been on the list for that window of time. Ironically, Allied Capital is the only company within the entire bunch that has yielded an investor profit on the year with all others exceeding 40% in losses. All others!



Talk about your stock pickings.



I asked Ms. Richardson about this complicated but circumstantial picture and whether she had any opinion as to whether settlement failures could any way relate to the performance Rocker Partners returned to its client base. Ms. Richardson either became confused over the data or wanted to ignore it as she failed to respond thereafter. She has not been alone.



The media has vilified CEO Patrick Byrne of Overstock.com over his battle with the illegal short selling that has nested his company on Reg SHO’s threshold list for much of this trading year and for what he has identified as a systemic problem in the markets.



Instead of investigating such concerns over possible systemic abuse CNBC’s Joe Kernen, earlier this month, asked Byrne why he didn’t simply leave the shorts alone claiming “they can go after any stock they want in America.” I am not sure that is something good but have at it Joe.



Kernen having access to communications between Byrne and his Broker whereby Byrne’s broker admits they can’t settle the trades because there are no shares available in the market avoided the conversation on the evidence. As expected, Kernen has never asked the Institutions that frequent his show why they do not simply settle the trades and leave Overstock.com and other Issuers alone. Be done with this mess and settle the trades.



Likewise Jim Cramer, CNBC’s Host of Mad Money and the largest individual shareholder of theStreet.com, found time to fodder Byrne in a Realmoney.com articles over Byrne’s management skills citing too much of the CEO’s efforts have been against abusive short sellers. Byrne’s focus on the short sellers has become a detriment to insuring profitable business operations according to Cramer.



As luck would have it Cramer, a self-proclaimed short seller extraordinaire, has identified that he was a co-founder in the public offering of a company; theStreet.com (NASDAQ: TSCM). A public offering which quickly turned ugly for those who invested in the stock.



In the May 1999 stock offering, the public’s access to trading in the stock ranged between $59.50 and $70.00/share with trading volumes in excess of 2.5 times the shares offered by the company. Since that opening day, theStreet.com has had a performance others would term “a pig.”



While TSCM has recently improved to nearly $7.00/share on takeover rumors, it was less than a year from the initial offering date that TSCM trading had fallen to this same $7.00/share threshold. The drop resulted in a 90% loss in share value over a period of 1 year. For much of the next 5+ years, the stock has actually qualified as a penny stock trading below the $5.00 watermark. TheStreet.com’s business fundamentals have not fare much better than the stock during these years.



As Cramer questions the motives and qualifications of the Board and CEO of Overstock.com, It would suffice it to say that the performance of theStreet.com Board and CEO should raise equal objective criticism from the financial media and shareholders.



In the circles of financial critics theStreet.com should be ripe for the taking has seen little by way of the negative fanfare that theStreet.com and Jim Cramer personally interject on similar companies and company executives of like performance. Fortunately for theStreet.com the short sellers also remain remarkably hidden from the stock. Fortunately for theStreet.com Mr. Cramer is a Director and thus less objective publicly of theStreet.com than he may be of other companies he critiques.



Who is the second largest single shareholder in this “pig” called theStreet.com however? None other than…you guessed it…David Rocker.



Oh the irony.



It is no wonder Kernen, Cramer, and others fail to understand the nature of the beast we have before us. Laziness, conflicts, and a desire to keep the mainstream sponsors appeased have resulted in media coverage that is sanitized for a certain investing class. The wealthy buy the subscriptions not the average Joe. The media must keep subscriptions up and to do so media must avoid confrontation with the readers.



As for the Securities and Exchange Commission and Regulation SHO, more questions have come from 2005 than answers. While the Commission remains silent in confusion and purposeful avoidance, the manipulation on concerted stocks remain and remain at a detriment to our global economy. Small businesses are being destroyed as are those investors not connected enough to be protected from the abuses.



Who has financially benefited from these issuers and others nestled dormant on the threshold lists with excessive settlement failures while the market capitalizations in the securities listed get trashed? How is it that with new rules that require closeouts in settlement failures [buy-side pressure] are put in place, and major short positions are being closed out [buy-side pressure] the stocks still tank on convenient sell side volumes?



All these forced buyers and everybody is a seller.



I personally would like to know how much profit went into the hands of David Rocker and the wealthy clients of Rocker Partners because of short positions that knowingly or unknowingly may have resided as excessive settlement failures in localized securities. Settlement failures the SEC themselves admit create the added leverage to drive down the value in a security.



How much of the SEC’s actions to protect those that conducted trading strategies, including heavily selling securities into settlement fail, resulted in investor financial ruin? How much of that financial ruin was merely a means to divert the wealth of the average investor into the wealthy Hedge Fund pools and the greedy clientele they administer to?



Whether smart or just plain lucky, it was awfully convenient for this Hedge Fund to have found the pot at the end of the rainbow that was filled with aiding SEC investigations, free passes handed out by the Federal Government to settlement failures, and mainstream media so eager to overlook the obvious questions.



Someday maybe somebody of importance will look into who owned the fails that hold these companies on the SHO list forever. When they do look maybe they can focus on who is ‘working the stocks’ to insure that those fails are closed for a profit and not a loss.



Maybe, just maybe, the two are interrelated.







For more on this issue please visit the Host site at www.investigatethesec.com .

Copyright 2006


investigatethesec.com



Share RecommendKeepReplyMark as Last Read


To: bob wallace who wrote (1766)1/14/2006 3:52:26 PM
From: Bwe
   of 1821
 
What happened to Gary B. Smith? I let my subscription to RM lapse and was looking around the site for the first time yesterday in quite a few months. It's like he never wrote for the site. His name is MIA from "Featured Commentators" and I see that Helene Meisler has taken over his "Chartman's Top Stocks" service.

Bruce

Share RecommendKeepReplyMark as Last ReadRead Replies (2)
Previous 10 Next 10