Bashers: The Terrors of the Internet
PART:1
By By Brett Hainley
Published by OTCNN.com
06/20/2000 11:16 AM CST
The Internet is a marvelous thing. “Due diligence” is no longer a phrase for brokers and market makers whose quick access to otherwise difficult-to-find files gave them an advantage over the small investor. Direct access to databases at the Securities and Exchange Commission, and the US Patent and Trademark Office, as well as the Copyright Office and company web sites has opened up a new world of readily available information for investors. Investor message boards and chat rooms hosted by such services as Raging Bull and Yahoo! make the sharing of such information with one’s fellow investors as easy as the touch of a button.
But with all its glamour, the Internet, and especially those oh-so-convenient message boards, can be hazardous to the unwise or the unwary. In those areas, the small investor often finds his faith and his company’s good name besieged by bashers – people who use the anonymity provided by the Internet to wage private wars and attacks against companies and, occasionally, other people. Their reasons are many and varied. Some are disgruntled former investors or employees of the company, wishing to spread their misery to others. Many are just trouble-makers, people who, for what ever reason, feel the need to attack and undermine others. And a few are actually paid by individuals or even market makers to assist in illegally and artificially reducing and suppressing the value of certain stocks.
This unfortunate situation is doubly bad for investors in OTCBB stocks. Since OTCBB companies, are, for the most part, development-stage companies, bashers hurt small investors in two ways. First, they strike at the investors’ confidence in the company’s management and direction. Most small investors in OTCBB stocks are long term investors, and, for them, confidence in a company’s management and potential for earnings is paramount. They can usually tolerate a few minor dips and slides as long as they feel confident that management will once again, get the ball rolling.
Bashers strike at the core of this relationship. They often attack company press releases as being propaganda. In one message base on the Raging Bull, a basher suggested that he had visited the company’s new construction site, and that no one there had ever heard of the company. Never mind that the company had never released anything but the most general information about the site.
Possibly the most destructive means that bashers use to undermine the relationship between investor and management, however, is their flagrant use of direct and indirect personal attacks. The same basher who claimed to have visited a company’s construction site also claimed to have met with the company’s new CEO, where, he claims, the CEO drunkenly declared that, since he could not sell his stock for another two years, he didn’t care how the company did. The CEO challenged the basher, denying the claims and inviting the person to meet with him in his office. Personal attacks can get terribly out of hand. Attacks against Talk Visual Corporation’s (OTCBB: TVCP) Chairman, Michael J. Zwebner became so bad that he finally filed suit against several of the bashers, alleging defamation and intentional infliction of emotional distress.
These attacks have another ill effect on small investors. OTCBB stocks are, almost by definition, low-value stocks. The effect of even a few cents drop on many of these securities can result in a high-percentage loss on an investment. Day-traders, and other investors seeking a quick return, are often unduly dismayed by the apocryphal allegations of these bashers, and, in response, have been known to sell off shares at low bids, seeking to receive some value from what they have been led to believe is a bad investment.
How, then, does one minimize the damage done by these dealers in half-truths and unwarranted attacks? The first thing is to take everything one reads with a big grain of salt. The Washington Post’s “two-source” rule applies well here. If someone provides negative or disturbing information about a company, ask for a source, then check it yourself. The source may be erroneous or obsolete. Most news sources publish periodic updates to their stories, especially if new information alters the information held in the original story. SEC filings are generally classified by date and type. Check the company’s most recent filings, both the quarterly and the annual, and be sure to read the “Management’s Discussion and Analysis” (MD&A), which often can explain the company’s operations in a way that the raw data can not.
Another way to deal with bashers is to simply ignore them. Since many bashers are merely trouble-makers and not professional defamers, they will usually go away once they see that their words have no effect. They can also be avoided entirely, many investor groups have a “Long” version of their company’s message base, where only verified reports may be posted and bashers are subject to special Terms of Service.
Most of all, don’t argue with bashers. All that will come from that is a headache. Is the "Bashing" of a stock an essential part of the online investment landscape?
Our Constitution guarantees us free speech and we have always valued
the lessons gleaned from dissent. When does dissent cross over that
imaginary line and become "Bashing"? To often we find well grounded
dissent capriciously labeled as "Bashing" by over zealous investors
bent on protecting a stocks reputation at any cost. The "Bashing" that is
addressed on this site is quite different from dissent. The Anatomy of
a Basher strives to look at the calculated erosion of confidence in a
given stock. Erosion by means that are, in every sense, void of
truth, hinged on deception and innuendo, and motivated by greed
at the expense of others. This compendium is offered to aid in identifying
the telltale signs of "Bashing", and hopefully provide a counter balance
to this heretofore unchecked manipulation of investors fears for personal
gain.
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IS IT EASIER TO SCARE PEOPLE INTO SELLING THAN IT IS TO SCARE PEOPLE
INTO BUYING A STOCK? I have asked some knowledgeable investors this
question and the answer is always: "YES, OF COURSE YES!"
WHO BASHERS PREY UPON
Consider the elderly that are investing for retirement, they find their way
to the message boards for validation only to see false posts about "SEC
Violations" and "Class action suits"... or the head of a "typical growing family",
with children to put through college, who is monitoring a message board only
to read posts by a "pack of 15 to 20 Bashers" (probably 5 or 6 under various
alias's) posting continuous disinformation... what do you think these new
investors will do? It's safer to not buy or even sell the stock, put the money back
in the bank than to deal with all this whirl wind of "unsupported" negative chaff.
The Internet has lured a whole new class of investor into the market. A new
investor is just that - New! This new investor, while learning the basics, is
particularly vulnerable to the tactics of professional Bashers. New investors
tend to lurk in the background of message boards, content to form independent
opinions based on what they read with their own eyes. Very often, honest,
intelligent and cautious people can easily be overcome by a well orchestrated
propaganda effort.
You must always remember that their is a lot of money to be made in just the
motion of a stock UP or DOWN it doesn't matter! And Bashers have money
at risk just as you do. But they have the edge of fear, lies, and falsehoods to
post while preying on the un-initiated. The average investor dose not have
the edge of organized deception.
Recent revelations have indicated that even Market Makers (those charged
with keeping the playing field level) have been involved in stock manipulation
by Bashing on a stock message board.
HAVE NO DOUBT THAT THIS IS A REAL THREAT!
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Lesson 1: Remember, BASHERS NEVER Bash A BAD STOCK.
Check the boards for stocks with no potential. They never have any
Bashers. Bashers only go after stocks that are moving up or
have excellent potential to do so. Bashers work to bring the price down
to either increase their position at the expense of others or help a Short
make their bones.
Lesson 2: BASHERS ALWAYS BRING UP OLD NEWS THAT YOU
HAVE HEARD MANY TIMES. New startup companies always have
a few bits of bad news. The Basher will post this over and over
again. Unsophisticated Bashers will try to freshen up old news with a
new date or by-line in an attempt to fool you.
Lesson 3: BASHERS POST MANY TIMES A DAY. They try to wear
you out. They comment on everything, every other post, and can
answer every question. THEY KNOW IT ALL! There is no positive
comment they won't Bash. They try to control the board. True longs
may have to confront the Bashers or they will appear to the
newbies as being the people with all the information. This is best
accomplished by posting positive, well researched data on the company,
repetitively, while trying hard not to engage the Bashers in direct repartee.
REMEMBER - LONGS... RESIST USING THE BASHERS ALIAS!
Lesson 4: BASHERS WILL LIE TO YOUR FACE. Never trust a
Basher. The truth on startup companies is that they make mistakes.
What new company hasn't? The Basher will compare your issue to a
another companies, financials - deals - management, etc., trying to lure
you into making an Apples to Oranges comparison. Remember each
company is unique and while it is prudent to seek out established
indicators, do so with care and don't take someone else's word for it.
Strive to come up with at least a "six-pack" of indicators so your vision
of the state of a company is not tied to a single barometer. Not doing
so is tantamount to going to a Race Track and betting on the "Pretty
Brown Horsey".
BASHERS WANT TO WHISPER IN YOUR EAR - PLANT A SEED
OF DOUBT, AND HOPE THAT YOU ARE NOT SAVVY ENOUGH
TO RESEARCH THE TRUTH ON YOUR OWN.
This is how they achieve their greatest success.
DOUBT + FEAR + LAZINESS = BAIL OUT!
This is your investment... work for it, protect it and don't panic on the
words of very shadowy figure that "has your best interest in their heart".
Consider that one factor: Someone you have never met, is not a member
of your family, is now, out of the goodness of their hearts - GIVING YOU
FREE ADVICE (that you didn't ask for). It's a no brainer.
They have motives $$$$$$$$$$$$.
Lesson 5: Bashers know YOU CAN'T VERIFY THEIR STATEMENTS
That's why they make the vague statements they do.
They rely on you being to lazy to research their droppings other than
to scan the board for others opinions. This is particularly dangerous
when you consider that Bashers work in packs and often validate and
back up each others nonsense with what appears to be "innocuous
and unsolicited" verification by comrade Bashers. Let's face it, we
are all conditioned to "believe" everything we see in writing. If others
by virtue of their "posts" also confirm this belief, then we are
subconsciously doomed to swallow the hook, line and sinker...
Basher - 1 Honest Investor - 0
Lesson 6: The Bashers PLAY ON YOUR LACK OF KNOWLEDGE.
They can lie about information and you won't know the difference
(unless you have done your own DD on the company and know the
truth and facts).
Lesson 7: Bashers play on your lack of patience. You have held a
stock for a while. You knew it will be a big stock someday, but the
BASHER CAN GET TO YOU BECAUSE YOU ARE TIRED OF
WAITING FOR YOUR GAIN. That's when the Basher is best. You
are tired. You have forgotten the goal for the stock was to hold it for
one year. The Basher is bothersome, so you dump it on a bad day.
Some others also dump. Then you get mad for your loss and
return to let everyone know how mad you are. Then you turn into a
semi-Basher as well. THE BASHER HAS WON, AND GAINED
A NEW ALLY - YOU! |
