Gene Marcial has been employed by Businessweek for a number of years, during which he has written his Inside Wall Street column. He is the main reason why I will never pay good money to subscribe to Businessweek. He has made more than a few bad calls over the years, but one of them is unforgivable. That call is his recommendation to buy Research Frontiers [[refr]] on July 30, 2007, just one day before I wrote that Research Frontiers was a ‘failed company‘. Since then, the stock is down 60% (see also my recent article on the company). The bigger problem is that Marcial was familiar with the company and wrote positively about it back in 1995 (link is not to the original article, which is not available online). A reasonable person might assume that if a company with a hot new technology just around the corner cannot get it to market in 12 years then that technology is not likely to ever be successful. Yet Marcial bought the company’s hype again 12 years later, believing that new contracts were just around the corner.
A word of advice to Mr. Marcial: it it looks like a duck and acts like a duck, it probably is a duck. If a company looks like a failed business that exists only on hype and selling more shares, then it is probably not a good idea to suggest that Businessweek readers to invest in it.
Jim Cramer’s words from The Fortune Tellers describe Marcial well: “this column has zero reliability … There he goes pumping some corrupt small-capper again.”
A word of advice to the SEC: if you see fit to prosecute short sellers who benefit from spreading rumors, why not prosecute those in the media who spread rumors? While Marcial does not directly profit from the stocks he hypes, without hype and rumor he would likely be out of a job.
Disclosure: I have no position in REFR. I do currently subscribe to Businessweek, but I used expiring frequent flyer miles to pay for it. I have a disclosure policy.