Here's some of the history of The Street and Greenberg's smear campaign against ALD and ACAS.
A Tale of Two Shorts
"Herb Greenberg and others writing at TheStreet.com (Nasdaq: TSCM) have roundly criticized American Capital, and many readers have cried "foul" on the critiques. The battle between longs and shorts runs back to the summer of 2002, and is a lot to digest. As someone new to the topic, here's how I see the two arguments,
A hidden war
For the past several years, Allied Capital (NYSE: ALD) has been in a war of sorts, pitted against several high-profile detractors and hedge fund managers who are shorting the company. Former Fool Jeff Fisher looked at the tempest in a teapot way back in 2003. The allegations have been ugly at times, but Allied Capital's business has remained strong throughout.
Here's another attempt to raise doubts recently made
American Capital's Value Vexes Investors
They'll scare some of people out of the stock, hopefully the perpetual whiners.
Some idiots will go so far as to short the stock.
Reality will set in and people will realize they've been screwed once again by Herbie & Co and we'll have picked up some new shareholders who will start messages about:
"Record dates, Ex-Divident Dates and where is my Divident?",
and the ever popular, How can the divident be more than the EPS?"
Round and round she goes, where she stops is a forgone conclusion.
Pretty much on the money. One of the articles seems to be clear on its position.
It seems that analysts are secretly trying to tell us they predict the economy will utterly tank in all dimensions in the near future. If that were the case given the guaranteed sinking dollar it doesn't matter whether you are in the market out of the market or on the fence, you are guaranteed to lose. Leading you to believe the main reason not to own the stock is that they plan to dump then pump it and you don't want to be part of that.
I especially liked the quotes from the BofA analysts which I read as 'we fail at every investment strategy we employ, and are among the worst in the business, so you should listen to our advice'.
I emailed Yulicko on why he chose to write on a $40M loss when its a $7.6B company and he said he thinks its material - it's freaking .5% of the market cap, and not unheard of to lose on a portfolio company. It's pretty obvious that he's filling in for Greenburg. I'm banking on it creating a buying opportunity.
Anybody have a graph depicting price and yield? Seems every time yield gets to 10 or higher, it a great place to buy.
If the rules are so lax that you can come out, put out negative stories, do some shorting, possibly naked shorting, and tank companies' stock prices, then what's to stop people with bad intentions from doing the same to us? It would seem appropriate to at least regulate some of this stuff. Could someone let me know what the rules are governing this kind of action? JMO and eager to hear answers...
Most of the people posting all the negative sh!* on this board probably never took the time to listen to the conference call.The value thing about ECAS was addressed very well on th cc as well as all the other issues. Anybody that has been in this stock for awhile knows that there will always be lumpiness with the accouning because of the equity side of the business. More often than not it seems to be more of a benefit to the upside than downside. But there are surprises to the downside. There are shortsellers that want this stock to go down and keep focusing on the negative side of the lumpiness totally ignoring the poitive side of it. The dividend is the best way to really judge this co's performance.........Tex
Looks like yolicko has been given a special assignment. Wow, 2 negative articles in less than a week with short ratio growing. Hmmm hard to figure that one out. Funny, despite all these folks being exposed in shorting schemes in recent years, things continue to look fishy at times. I wouldn't be writing this if a balanced view were being presented by the media. They take the time to dig out "fishy" accounting and companies going bankrupt, but don't counterbalance that with some of the wondrous returns obtained by ACAS on other fronts. HMMM. Just my humble opinion, but what do you guys think?
Disclosure: I'm not in ACAS. Over the last week I've been considering a long position. I don't have any short positions in anything and never have.
So, I read that Fool.com piece...A Tale of Two Shorts. Here's the key paragraph from my perspective:
"I can't tell from the numbers given whether American Capital is a good operation or not, and the arguments both for and against it are speculative. I need a clear understanding of a company's business and financials before sinking money into it -- or shorting. The way this business is by default run, I don't believe that's possible (for me and for most others), and I won't pretend it is."
I don't like Cramer at all. I think he's a clown. I don't know anything about Greenberg, but if he's associated with Cramer...well, you can a lot about a person by his friends.
That said, the guys shorting ACAS and ALD also shorted NFI. NFI was another high dividend stock, based on sub-prime mortgages. They were right to short NFI. Loaning people more money than they can afford to payback is not a sustainable business model. No matter how much we wish it is. And the NFI board was full of NFI partisans who seemed to have formed an emotional attachment to 15% dividends.
I invest in stuff I understand. And ACAS is too opaque. I can understand their argument about a control premium on ECAS. I disagree, but I understand. It feels like fishy book-keeping. And eventually that stuff catches up and when it does, the company goes from a market cap of $7 billion to $100 million.
"Disclosure: I'm not in ACAS. "
So you thought you'd just drop by and display your ignorance for our entertainment??
Disclosure: It is better to keep quiet and be thought an idiot, than to speak and confirm the suspicion.
Just posted an entry regarding the book value of ECAS and its relevance. Informed opinions are welcome.
if your an old timer on this board and have been thru the short attack, take a look at CROX(rubber shoes). CROX is currently undergoing an attack. the yahoo CROX board is worthless, the IV CROX board is OK.
Last time Herbie & Co pulled this stuff, I got in at $25 after waiting for a strong rebound trend. Now its yielding 16% on my cost. AND it's up 64%. I'm way over weighted in ACAS but if she goes to low 30's again,I'm loading more on the wagon.
Gotta love it.