Dear Cult Followers:
One of Mr. Pink's affiliates was kind enough to email Him the American Banker article on Mr. Pink's activities.
It is fascinating the a supposedly respected company and a fine journal read by millions such as the American Banker would devote time to such nonsense. Obviously Mr. Pink wields such great power that He can hack hundreds of millions of dollars of shareholder value merely by speaking His piece.
MORTGAGES
Home Equity: FirstPlus -- Web Critic
Drove Down Price
By Heather Timmons
FirstPlus Financial Group says it has a identified a person
trading in its stock who has used Internet message boards to
drive down the price.
The specialty finance company said Monday that it was
"reviewing its legal remedies."
The company had said earlier in the month that it was putting
itself up for sale. The asking price is rumored to be at least
$35 a share.
But FirstPlus stock has nosedived to about $16 in recent
weeks. The company says the investor's Internet messages
are at least partly responsible.
FirstPlus is said to be close to a deal -- and quickly losing
leverage as the price falls.
Internet message boards, which allow anyone to anonymously
post an opinion about a stock, have had increasing influence
on the market. "Now everyone's an analyst," said one hedge
fund manager.
FirstPlus said a continuing investigation had found the
individual, who it said was disseminating false and
misleading information.
Daniel Phillips, chief executive, declined to identify the
person, who he said was found through a "quiet and intense"
investigation.
Followers of FirstPlus' stock said the target of the company's
investigation is someone who posts messages as "Mr. Pink"
-- a name lifted from the Quentin Tarantino movie "Reservoir
Dogs." "Mr. Pink" uses the Yahoo message board and
another Web site, Silicon Investors.
He or she is said to be a short-seller -- a class of investor
seeking to profit from declines in stock prices. Short-sellers
have been targeting FirstPlus in recent months, and "Mr.
Pink" has been recommending that investors short the stock.
The postings have criticized FirstPlus with comments that
range from analytical to downright silly.
Stock watchers who frequent Internet message boards say
"Mr. Pink" does have some influence.
"He's really developed a cult following," said one investment
banker. "He was shorting technology stocks, and then
decided he liked this sector" as a shorting target.
Other observers, though, were baffled by FirstPlus'
announcement, which they saw as a misguided attempt to
blame someone for the falling stock price.
"It's a characteristic of this panicked market," said a bond
trader who focuses on distressed companies. Specialty
finance companies have been hit hard this year as investors
shied away from the sector. Several have put themselves on
the block in the hopes of attraction a buyer with deep pockets
and access to capital.
Several analysts are strongly recommending FirstPlus stock,
pointing to the likelihood of a sale and to FirstPlus' position
as the leader in a fast-growing niche. Several expect the
company to sell for $40 or more a share. Nonethless, the
stock has continued to trade below $20.
"The market has it wrong, but it doesn't make a difference,"
said Reilly Tierney, analyst with Fox Pitt Kelton.
FirstPlus is unlikely to find any way to curtail negative
comments about it, even anonymous ones, observers say.
"You're allowed to be wrong in your analysis," said the hedge
fund manager. "I've seen cases where sell-side analysts are
factually wrong" in reports they publish, and companies are
reluctant to sue, he said.
The Securities and Exchange Commission has brought
cases against people who used the Internet and other means
to artificially inflate stock prices.
And an Ontario judge decided this year that several Internet
providers would have to disclose the names and addresses
of individuals who had posted negative messages about
Philip Services Co., a scrap metal company.
Ultimately, analysts say, the best news that FirstPlus could
announce would be that it has nailed down a buyer.
Mr. Pink |
