While we're documenting that Greenberg was well informed about Kimmel's misstatements concerning SEPR (but is willing to repeat them uncritically despite that knowledge), let me archive the following:
Following my first e-mail (to TSC's editor, copy to Greenberg), and Greenberg's response in his 5/28 column as quoted by Peter in the post this is a response to, I sent Greenberg an additional e-mail, including the following:
" . . . rather than taking the opportunity to dispel the impression that you're willing, perhaps eager, to help promote the agenda of [a] short-seller, you choose to reaffirm that impression.
"USUALLY YOU TRY HARDER. Why the relaxation of standards? Don't you and TheStreet.com want to be taken seriously by the investment community? Why don't you and TheStreet.com again try to back away from the sort of hype represented by Jordan Kimmel's crudely false statements.
"For your and your editor's reference (quoting from my 5/27 e-mail), the statement of Mr. Kimmel you quoted included
"three main areas of factual misrepresentation:"
"(A) it is just flatly untrue to say that "insiders didn't own a share" [actually, they own 2.425 million shares, 7.4% of the company], which Greenberg could have rather easily found out;"
"(B) to say that SEPR "had high debt" misleadingly overlooks the facts (1) that virtually all of the debt is low-interest convertible debt, much of it convertible at $47.369/share, below even current stock prices, and (2) that SEPR has cash [$462 million at 3/31] equal to much more than the $300 million debt convertible at $124.875 [and, not so incidentally, is putting that cash to very good use in developing its drug candidates ("ICE's"], and"
"(C) to say that SEPR "lost its air" with the JNJ decision about "Sepracor's allergy drug" [not "one of SEPR's four allergy drugs"??] largely overlooks SEPR's other five big pharma partnerships and 20+ unpartnered ICE's. Two of those partnerships are for improved (and patent-extending) versions of allergy drugs Claritin (in phase III) and Seldane (on the market as Allegra)." [I should have said, not five but "four big pharma partnerships and its unpartnered FDA-approved Xopenex"]
"The facts are that SEPR is financially very strong; is run by executives who, strikingly, have never voluntarily sold a share (the CFO lost most of his in a divorce last year; three of the outside directors sold part of their positions earlier this year); and has a pipeline that compares favorably with most of big pharma."
"This willingness to publish, uncritically, the manipulative comments of a short-seller, suggests (1) that Greenberg, if he wants to be taken seriously as a journalist, should do his homework better (maybe read a balance sheet? spend five minutes on Yahoo or somewhere to check the insiders' stockholdings? - has Herb really ever heard of a development-stage biotech where the "insiders didn't own a share"?), and that (2) he should be quite a lot more wary when quoting an "analyst" so obviously in full self-promotion mode. This was a disgracefully long way from serious financial journalism."
"BTW, if you're going to paraphrase me and give my name, please don't mischaracterize what I say.
"You wrote (5/28) that I "accuse[d] [you] of shoddy journalism because Sepracor's management owns 7.4%." But I didn't accuse you of shoddy journalism for missing a fact, but for the more serious offense of running Jordan Kimmel's several misstatements of fact without any checking, despite his obvious agenda, and from this apparent indifference to factual accuracy - not just from blowing a fact -- I drew the inference that you had shoddily fallen far short of appropriate standards of financial journalism."
Greenberg responded by e-mail:
"In a message dated 5/31/99 11:55:33 PM Eastern Daylight Time, Rober98@aol.com writes:
"<< when I helpfully (if aggressively) pointed out his several factual errors you choose to correct only one of the several errors (about insider holdings) but quoted the short-seller's "explanation" minimizing the crude factual error, and thus minimizing your journalistic lapse in standards.
"Thus, rather than taking the opportunity to dispel the impression that you're willing, perhaps eager, to help promote the agenda of an apparently dishonest short-seller, you choose to reaffirm that impression.
" USUALLY YOU TRY HARDER. Why the relaxation of standards? >>
"no relaxation of standards. i consider the other points to be subjective... that one guys low debt (convertible at 47) is another guy's high debt (hey, it's debt!) and the jnj reference WAS thee reason the stock fell."
Despite the above (and Harold Engstrom's effort to instruct him on the facts) Greenberg was content today to quote Kimmel, again:
"On the downside, he [Kimmel] says that Sepracor (SEPR:Nasdaq) is still his No. 1 short. "There's still tremendous debt, margins are decelerating and insiders own little stock," he says. "I think it will absolutely implode."
"Remember, this is the guy who told me (and I chose not to print because I couldn't verify any trouble at the time) the same thing about
McKesson (MCK:NYSE). "
Maybe I'm showing my puritanical streak, but "shoddy journalism" seems too mild for this.
--RCM |
