To: Cindy Powell who wrote (1449 ) 5/3/1999 8:07:00 PM From: EL KABONG!!! Respond to of 3795
To all, I have seen some people post some opinions on this thread regarding "ticker spamming" or "ticker leeching". So in case there are folks who don't understand the whats or whys or hows, here is my opinion. "Ticker spamming" and "ticker leeching" are just two similar phrases for a similar practice. The act itself involves Company A (usually a small company trading on the OTC-BB or even on the NASDAQ Small Cap) including in their press release(s) irrelevant information that somehow manages to include the stock tickers of larger, well known companies, or sometimes the tickers of smaller companies which may or may not be of significance for Company A. The reasons for this (from Company A's perspective) are two-fold. First of all, a valid and significant relationship may exist with a different company. If so, then mentioning the other company's ticker could not really be considered as ticker leeching/spamming. This should be obvious to everyone. However when no prior relationship exists, the purpose is usually to get the press release in front of a larger audience. While I'm not criticizing Yahoo or their computer systems, I'll use them as an example. Yahoo electronically scans the wire releases looking for tickers. When they find them, they post news links on their website so that people looking for all the news on a particular company will easily find them in one convenient location. If Company A includes other tickers in its' release, then that release is linked to all tickers mentioned. Thusly, Company A gets its' news presented to a larger readership, even though those other companies whose tickers were included may have absolutely no relationship to Company A. This practice is more correctly labeled as "ticker spamming". Similar results may occur with other firms that employ "push" technologies to disseminate press releases. While the practice of "ticker spamming" is not yet illegal, it likely was not what the Yahoos of the cyber-world had in mind when they created their systems. Sometimes a subtle effort is made to link Company A to the other larger, more successful companies through careful, yet misleading wording of Company A's press release(s). The purpose here is to confuse the issue in the mind of the casual reader or novice investor who may believe that a relationship exists with the larger company, or may be led to believe that success similar to the larger company is inevitable (disregarding any "forward looking" statements usually included at the end of most press releases). This practice is more correctly labeled as "ticker leeching". It should be noted that in both instances (ticker spamming and ticker leeching), the content of the press release usually comes directly from Company A itself or directly from an IR/PR individual/firm that is acting as Company A's agent. Outside of perhaps a spell-checker and maybe some other obvious no-no's, the wire services themselves do not alter the press releases and are mostly engaged in the dissemination of the press release, not the authorship or the content. Who is looking out for the interests of the small or novice investor? Well, that's a very good question. The wire service(s) that allow this practice may indirectly benefit from ticker spamming because they could now (theoretically) legitimately claim a higher viewership (because of all those people that had to <click> through Company A's press release to get to their company's news). Yahoo (by way of example only) also (theoretically) benefits because they might realize a higher <click> rate for their site for the same reason. (<Click> rate is one of the ways in which the internet companies measure their "success" or viewership to be able to correlate viewership to advertising revenues, an internet business practice somewhat analogous to the relationship of the Neilsen Ratings to television programs.) As previously mentioned, Company A might also benefit from the larger audience. So my original question was, "Who is looking out for the interests of the small or novice investor?". Possibly no one but themselves... Caveat emptor! KJC