Thursday, January 28, 2010

More Sleeping Media, Illinois Edition

In a blog post yesterday I described how Salt Lake City newspapers are doing an lousy job of covering Overstock.com and its loony CEO Patrick Byrne, not even mentioning the departure of a key executive. A loyal reader brings to my attention an even more egregious example of journalistic nonfeasance, this one from Illinois.

This involves the governor's race in Illinois, for the seat vacated by Rod Blagojevich, in which Illinois comptroller Dan Hynes is running against Gov. Pat Quinn for the Democratic nomination. An interesting controversy has become a factor in the Democratic race: seems that an employee of Hynes named David Pippy has been posting attacks on penny stock companies on a stock message board.

Here's a report on the subject from a local ABC affiliate in Chicago. Pippy is accused of running into the ground a poor little penny stock company called Prime Star Group, among others, by posting on the InvestorsHub message board. Prime Star is apparently suing everybody in sight.

Now, Pippy should definitely not have been using state computers for stock bashing, or stock pumping for that matter. But state employees are not always the most overworked people in the land, and it's not unusual for them to use their computers for nongovernment purposes. Nor is it strange that a penny stock company says that somebody other than itself single-handedly drove its stock into the ground. If I ever hear of a penny stock company taking the blame for its shares declining, I'll drop dead from a heart attack.

But what I do find peculiar is that the governor of Illinois is buying into this rubbish, and that the state's newspapers aren't calling him on it.

All I could find in the Chicago Sun-Times was this unprobing he-said, she-said account.

All I could find on the Chicago Tribune website is this AP story, which I had to get off Google cache because it's not on the website any more.

Apparently nobody bothered to pull up the latest SEC Form 10-Q for the Las Vegas-based Prime Star, which discloses that the company has $1.4 million in assets, $9 million in liabilities, a $47.8 million accumulated shareholder deficit, no revenues, no sales. In fact, any inquiring reporter could have skipped down to this:
The Company has had no significant operations, assets, or liabilities since November 7, 2005, and accordingly, is fully dependent upon future sales of securities or upon its current management and / or advances or loans from significant or corporate officers to provide sufficient working capital to preserve the integrity of the corporate entity.
Reading through all this crap, what I wonder is this: what in the hell was Pippy doing? I doubt very much that he could have been shorting a stock like this, as penny stocks are very hard to borrow. Maybe he bought the stock and got burned. Or maybe he's just one of those "shareholder vigilante" types I've written about from time to time who just hate overvalued penny stocks. I don't know, and obviously nobody in the Illinois media has ever bothered to ask him.

What I do know is that the idea that he single-handledly drove down the price of this flyspeck company is dubious at best.

Look, I don't care about this company or David Pippy or any of the other people involved in this nonsense, and I couldn't care less how Illinois picks its governors. But all I can say is that Illinois' media seem as FUBAR as its electoral process.

© 2010 Gary Weiss. All rights reserved.

Digg my article

Labels: , , , , , ,

Links to this post:

Create a Link

<< Home

Enter your email address:

Delivered by FeedBurner