For those following the TRIB/XTRN saga, here is a piece from the Sunday Trib, and the good & bad points of pay up front research.
I am neutral on the subject, btw..
(I must say, a few of us do a much better job, and I see a new way to produce revenue for us.
We should form up a micro-cap pay per idea service, what think????)
Wall Street orphans risk stigma
Uncovered firms hire analysts to reach investors
By Thomas S. Mulligan, Los Angeles Times
Tribune Newspapers
June 8, 2003
When K2 Inc. bought Rawlings Sporting Goods Co. in March, along with the famous line of baseball equipment came something that K2 would rather not talk about: a company-paid analyst to write about Rawlings' stock.
Despite an internationally known brand name and 116 years in business, Rawlings had become what some call a Wall Street orphan, ignored by analysts at the big securities firms.
So last year it signed a one-year, $25,000 contract with private research firm J.M. Dutton & Associates, whose analyst initiated coverage in November with a "buy" rating. Last week, it was rated a "speculative buy," reflecting more risk.
Los Angeles-based K2 referred questions about Rawlings and Dutton to investor relations firm PondelWilkinson MS&L, where Vice President Angie H. Yang emphasized in an interview that K2 didn't seek the relationship; it inherited it from Rawlings.
"Paid-for research is not something that K2 is interested in pursuing," Yang said. "It's certainly not something we believe the company needs to do."
John M. Dutton, who founded and heads the Eldorado Hills, Calif., stock-research firm that bears his name, is accustomed to such slights.
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