TheStreet.com Once Again Defames Sirius XM Radio At Critical Time

By Steve Garcia –

I was unpleasantly surprised over the weekend to see that once again Yahoo (NASDAQ: YHOO), which claims to be a credible and relevant news and search engine, appears to be complicit in the bidding of one of the most vile financial companies (in my humble opinion) known to investors.  I am talking about Jim Cramer’s own “Thestreet.com.”  As we have seen over the course of this past year, any time specific companies gain headwind, in this case Sirius XM Radio, old or simply negative press items conveniently get recirculated from the same conspicuous sources.  This categorically fits what former hedge fund manager Jim Cramer himself has called “fomenting” to elicit a specific market response.

Any way you look at it, it is unethical to release old or tailored news at critical points in a company’s history to affect a specific stock reaction.  Those who have followed Sirius XM Radio recognize this technique all too well.  When the source of these “bash” articles are timed closely with specific events to damage a company, and that same source has historic ties with the hedge funds that benefit from a downturn in the company’s stock (while your average retail investor will watch his investment suffer), experienced investors will tell you there is no coincidence.

Recent news about TSCM suggests that not only are they a shady source of news with no credibility, but perhaps also involved in manipulative practices with certain stocks on the markets.  There are also strong questions about their accounting methods.  Certainly they are the kings of  negativity as far as Sirius XM Radio (NASDAQ: SIRI) shareholders are concerned, continually hammering the company at every turn.  Their video from early last week somehow was picked up again by Yahoo only yesterday in time for a nice Sunday bashfest.  We wouldn’t want investors who were busy during the week to have to search for negativity, would we?  Once again, Yahoo, without validating their news content, makes certain that it is sitting in plain sight on their financial Sirius XM Radio page with a nice link.

The story doesn’t end with Sirius XM Radio, however, not by a long shot. The Street was also named by Overstock.com (NASDAQ: OSTK) CEO Dr. Patrick Byrne several years ago as a practicing manipulator of equities, and Jim Cramer was outed in many ways by the Overstock CEO’s fight against Wall Street manipulation. In fact, an entire website,  Deepcapture.com (http://www.deepcapture.com/), sprung from that investigative masterpiece of reporting and I applaud Judd Bagley and others who really dug deep. Reading at that site is like reading a who’s who of miscreants on Wall Street.

Recently, on March 17^th to be specific, came news that the SEC was investigating The Street.com for issues with how they recorded revenue as seen in this piece of news:

“Investment news website TheStreet.com Inc. said yesterday it was being investigated by the U.S. Securities and Exchange Commission (SEC).  The company, founded by Wall Street trader and television personality Jim Cramer, right, made the announcement in a form it sent to the SEC where it asked for more time to prepare its financial statements.  The probe, which is related to how revenue was recorded at a subsidiary called Promotions.com was launched earlier this month. Website Zerohedge.com first reported the news.  A spokesman for The Street.com declined to comment on the investigation. The probe arose after the company announced on Jan. 25, 2010 that it was restating its financial results for 2008 and 2009 due to “certain inaccuracies” at the Promotions.com unit.  Credit for this piece and more about this situation can be found here: http://www.nationalpost.com/scripts/story.html?id=2695278#ixzz0m9T1yAjv

Even more recently on April 6^th, the following news came out:

Generex Launches $250,000,000 Lawsuit Against TheStreet.com and Feuerstein

11:30a ET April 6, 2010 (GlobeNewswire)

Generex Biotechnology Corporation (NASDAQ: GNBT) (www.generex.com), the leader in drug delivery for metabolic diseases through the inner lining of the mouth, today announced that it has commenced legal proceedings against TheStreet.com, Inc. and Adam Feuerstein in the Supreme Court of the State of New York seeking $250,000,000 in damages for business defamation, product disparagement, and injurious falsehood.  The claims arise out of articles authored by Feuerstein and published on TheStreet.com website on March 19 and March 26, 2010.

Generex contends that the articles disseminate numerous defamatory statements about the Company, its management, and its flagship product, Generex Oral-lyn(TM), and that the articles put forward several ostensible statements of fact that are, in truth, misleading or outright misstatements made with malicious intent or with a reckless disregard for the truth.

“These articles go well beyond the expression of disparaging opinion or fair comment,” said Mark Fletcher, Generex’s Executive Vice-President & General Counsel.  “Feuerstein and TheStreet.com have abused their public forum by spreading categorical falsehoods about Generex and Generex Oral-lyn (TM) when a modicum of due diligence would have revealed the truth, an injury then compounded by unfounded and libelous allegation and innuendo.  We are now seeking to hold Feuerstein and TheStreet.com accountable for the damage they have unjustifiably inflicted on Generex and its stockholders.”

It is my intent to notify as many people as possible to be extremely careful about what they read and who they believe with regard to financial news.  Jim Cramer is no friend to the common investor, in my opinion.  While he may indeed have a solid if unspectacular track record making picks on his silly television show MAD MONEY, Jim Cramer is part of the problem and not the solution.  A video of Cramer was pulled from youtube in which he described Hedge fund activities, but here is an excerpt from an article describing his flippant attitude toward market manipulation (once again, he calls it fomenting) when he was managing a Hedge fund:

The interview, described methods including tactical buying, shorting or using options to create an impression in the market that could prompt other traders and investors to buy or sell a stock.

“A lot of times when I was short at my hedge fund … meaning I needed (a stock) down, I would create a level of activity beforehand that could drive the futures,” said Cramer. “It’s a fun game and it’s a lucrative game.”

Cramer, host of the popular CNBC television show Mad Money, described tactics that could be used to drive down technology stocks such as Research in Motion (NASDAQ: RIMM) or Apple Computer (NASDAQ: AAPL.) to make them cheaper to purchase later. In the interview, Cramer said a hedge fund manager’s favorite tactic is to get a rumor about a stock to an unwitting reporter — at the Wall Street Journal or at his current employer, CNBC — and hope that it moves the stock in the direction the manager wants.

Cramer said some tactics are “blatantly illegal,” but sometimes essential for poorly performing hedge funds.  Cramer said if a market participant wanted to get shares of a company like RIM lower then he should first get investors “talking about it as if there is something wrong with RIM”.

“Then you call the (Wall Street) Journal and get the bozo reporter in Research in Motion and you would feed that (rival) Palm’s (NASDAQ: PALM) got a killer it’s going to give away,” he said.  “These are all the things that you must do on a day like today and if you’re not doing it, maybe you shouldn’t be in the game.”

“It might cost me $15 million or $20 million to knock RIM down but it would be fabulous because it would beleaguer all the moron longs who are also keying on Research in Motion,” said Cramer.

He also said the SEC does not understand some illegal activity.

The rest can be read at the following link:

http://www.reuters.com/article/idUSN2036292620070322

Suffice it to say that all is not always what it appears to be in the financial markets.  The key to making money has a lot to do with knowing who really is on your side.  From my perspective, The Street.com and co-founder Jim Cramer are two things you should avoid if you want to make money in the market, but then again…sometimes its best knowing who is involved in misinformation, what the other side of the trade is planning, and how certain financial institutions and news services operate.

Disclosure: Currently long SIRI, no positions in RIMM, AAPL, PALM or OSTK or GNBT