Ain't too proud to beg...
The Five Dumbest Things on Wall Street This Week
By George Mannes
Senior Writer
2/18/2005 7:08 AM EST
URL: thestreet.com
1. Salton the Wounds
Another week of earnings season has gone by.
You know what that means, of course: another story about a company allegedly stage-managing its quarterly conference call with Wall Street.
On Monday, Daniel Loeb, CEO of hedge fund Third Point, sent an open letter of complaint to Leonhard Dreimann, CEO of struggling appliance marketer Salton (SFP:NYSE) .
Among the several accusations in Loeb's letter (http://www.sec.gov/Archives/edgar/data/878280/000089914005000130/t2775852.txt), one passage in particular caught our eye.
Loeb, who says Third Point is one of Salton's two largest shareholders, said the company blocked him from speaking on Salton's Feb. 9 conference call, which came after the company reported disappointing results. Loeb further asserted that Ken Sgro, Salton's outside investor relations representative -- Loeb actually called him Dreimann's "lackey" -- "insult [ed] my intelligence by blaming the slight on 'a conference call administrator malfunction.'"
Strong stuff. So on Thursday we called Sgro, who works at the investor relations firm CEOcast, to get his side of the story. Sgro told us he had no idea where Loeb got this insulting-the-intelligence story. "I never spoke with him personally," Sgro insisted.
We called Loeb to double-check. "I stand by every word in that letter," said Loeb -- though he subsequently admitted that "conference call administrator malfunction" wasn't a direct quote but his own Janet Jackson-esque phrasing.
During the call, said Loeb, he had spoken directly to the conference call administrator to check that he was in line to ask a question. "They said I was in the queue," he said. He had wanted to ask a number of questions about Salton's refinancing, its sales deterioration and what he calls the company's "bloated" operating expenses. But he never got the chance.
Sgro "called me personally after the call, and he apologized," said Loeb. "I told him I didn't accept the apology."
Hmm, we thought. Loeb has a clear memory of an apology from Sgro. But Sgro says it didn't happen. Odd, that.
Well, things cleared up a little later, when Sgro called us back. "I was completely mistaken," he says. He did indeed talk to Loeb afterward. But Sgro insisted there was nothing purposeful about Loeb's exclusion.
"The operator on the call didn't tell us he was ready to ask his question," he said. It would be irrational for Salton, he said, to deliberately ignore Loeb. "Every shareholder is important to us," said Sgro. "Why mess with one of the bigger ones?" (Salton, another spokesman told us, "has always been willing to directly speak to Mr. Loeb in the past.")
Loeb, suspicious of Sgro's changing recollection, calls him a liar.
"If the point of the conference call is to disseminate information publicly, and to have an open give-and-take with shareholders and analysts, how can they censor their largest shareholders?" Loeb asks. "It seems to me more like Soviet-style PR presentation, where only those people friendly to management are allowed to ask any questions." |
