July 2006 Archives

I was planning to publish our first major investigative piece today.

But two things happened Friday that led me to add one more step to the process. First, an attorney for the company at the center of our debut story politely noted that we could be sued, or even face "criminal liability'' if any of the contents are false or misleading. No surprise there.

Then, I did a live interview with Report on Business Television, a Canadian cable channel similar to CNBC. The biggest stumper the anchor asked, in reference to our mission of exposing questionable activity, was who will be monitoring my behavior. I responded that Sharesleuth.com would be a transparent operation; that we'd link to evidence used in our stories, that we'd disclose any conflicts and that we'd let readers make their own judgments. But he raised an interesting point. I'm a one-man operation at this point, acting as both reporter and editor.

Over the weekend, my partner Mark Cuban and I settled on a plan that addresses both of those issues. We're going to pay an independent fact checker to review our stories and ensure that the details are correct and the conclusions are neither false nor misleading.

That means the publication of the first piece will be pushed back a few days. However, the story will be even stronger as a result.

Thanks for your patience, and for keeping the story tips and site suggestions coming.

At least once a week, we stumble upon some Internet investment site that suggests the next Microsoft or Yahoo! is hidden somewhere in the penny stock netherworld, just waiting to be discovered.

Our experience suggests otherwise.

I’m hard pressed to think of more than a handful of companies from the Pink Sheets or Over the Counter markets that have produced sustained returns for investors over the past few years -- AND contributed to the U.S. economy by generating substantial revenue, earnings and jobs.

Given the trillions of dollars sloshing around in venture capital funds, private equity funds, hedge funds and other pools of ready and restless capital, what are the chances that a company with a promising product or technology is actually going to be overlooked?

To occupy some time while we wrap up our first major investigative piece, I’d like readers to cite examples of tiny public companies that have proven themselves to be something other than momentum plays, hype vehicles or outright scams.

If you’ve got a favorite, please cite the attributes that you think made the difference.

Thanks for stopping by Sharesleuth.com. Look for another posting soon.

Today we begin our grand experiment -- independent Web-based reporting aimed at exposing securities fraud and corporate chicanery.

Call it journalism. Call it investigative blogging. Call it what you will.

More than 13,000 companies are listed on U.S. stock exchanges. Analysts for brokerages and independent research firms track fewer than half of them. Overburdened examiners at the Securities and Exchange Commission review only a fraction of the filings that come their way.

If you’ve spent any time digging through muck and rot in the lower reaches of the stock market, you know that many investment opportunities are not what they seem, and that some companies are the creation of predators and pretenders.

Sharesleuth.com aims to create a new line of defense by using investigative journalism techniques and a worldwide network of amateur and professional stock detectives to identify suspect companies.

What we're about

Unlike some other investment sites, we won’t base our reports on intensive financial and technical analysis. It will be a rare story that mentions trailing EBITDA, discounted cash flow, Bollinger Bands or Stochastic Oscillators.

Sharesleuth.com will scrutinize the people behind the companies and the stories behind the stocks.