December 16, 1998 19:28
CNBC cancels Cramer over WavePhore
NEW YORK, Dec 16 (Reuters) - CNBC, the business news channel, Wednesday suspended money manager James Cramer as a regular guest host on one of its shows after questions arose about his comments on Internet stock WavePhore Inc., a provider of news and Internet broadcast services.
"We're reviewing comments he made on the air, the feedback we've received, as well reviewing our processes," a spokesman said. "We fully intend to have him as a guest contributor, but we want to wait until we've completed reviewing comments he made."
Cramer, a hedge fund manager with Cramer, Berkowitz & Co. and co-chairman of an Internet business news site, appeared as a guest host on CNBC's "Squawk Box" program on Dec. 2, the same day WavePhore Chairman David Deeds was a guest.
Cramer said he had called one of his traders to see whether or not he could short the stock. He was told it was not available. Cramer used that as an illustration of WavePhore's illiquidity, but did not actually seek such a trade, according to CNBC.
After Cramer's comments, the stock dropped about 38 percent to $5.75. The company described the comments as disparaging and said they were responsible for the stock's drop.
In a column Wednesday on his Web site, TheStreet.com, Cramer wrote: "Again, for the billionth time, I did not try to short WavePhore when I was on CNBC. I tried to check to see if it could be borrowed to find out whether it had doubled because of a short squeeze. I did that to try to understand why this stock doubled, no more. I thought that would be valuable to the viewer. I had no intention of shorting and never shorted Wavephore."
Shares have since recovered a bit. WavePhore closed down 5/16 to 8-1/16 on Nasdaq on Wednesday.
WavePhore asked the Securities and Exchange Commission and Nasdaq officials to investigate the trading patterns.
Both the SEC and Nasdaq declined to comment.
The CNBC spokesman said Cramer, who appears on the program every other Wednesday, receives no compensation and is not under any contract.
As a guest host he has offered opinions on the markets as well as on individual stocks and participates in interviewing corporate executives.
A day before Cramer and Deeds appeared, WavePhore's stock nearly doubled to above $15 per share. On Dec. 1, it announced a set of new online shopping partners for its WaveTop Internet service.
CNBC said it expects guest commentators to "act with integrity and objectivity" and not create an appearance of impropriety.
Copyright 1998 Reuters Limited. All rights reserved. Republication or redistribution of Reuters content is expressly prohibited without the prior written consent of Reuters. Reuters shall not be liable for any errors or delays in the content, or for any actions taken in reliance thereon.
More Info
WAVO
Stocks News
Symbol
Name
Quotes/News
Digest
Stock Charts
Analytics
Earnings
MarketGuide
Nelson's
SEC Filings
Baseline
Zacks
First Call
Hoover's
IPO
Advanced Search
|
