Watching Bloomberg today with a recorded interview between Schatzker and Carson Block of Muddy Water's. Block was complaining about StJude and their medical equipment has security flaws in the RFID, then added he has a short position on StJude. Any half intelligent person thinks, really, can Bloomberg be this stupid, this is going to set the cat amongst the pigeons as there's no reporting from the other side. A few minutes later Justine Bone from MedSec is interviewed by Bloomberg live about their independent testing procedures of the StJude products. She then goes on to admit that MedSec compensation is directly linked to Block's short trade, they bypassed the FDA and StJude as they thought they would not pay attention. Then the StJude share price collapses -8%! It's then interesting to watch Bloomberg anchors running around trying to cover themselves and the network when the penny drops that their producers have seriously messed up letting this one run on air without a balanced response from StJude! In the past they used to keep all these behind closed doors, but in the search for profits it turns out they really don't care any more, and Bloomberg are culpable of abetting. Are StJude's products flawed, maybe, maybe not, but that's up to the FDA. It's one thing to push the information out for public health, but it's another level to openingly push it when you have a massive short position in the company, that's delusional!
Makes you wonder about Block's tactics. Is he for real? The rest of the world thinks so. They follow his lead, because he made a name for himself in bearish bets after he exposed accounting fraud and other nonsense in companies, mostly in China. I was watching the Bloomberg TV feed live this morning when he was talking his talk, and the stock kept dropping...4%, 5%. I gave up watching after 5.5%. But hey, people trade the rumors, not the facts. That is what speculation is all about.
You do realize that media outlets love controversy because it increases viewership. Also how do we know that one of the producers of the show isn't within Carson Block's sphere of influence ( not saying bribery). Hedge Fund guys are very well connected with media just observe Carl Ichan or Bill Ackman and you'll see how they use media to their ends to sway public buying or selling.
So you can hack pace-makers now and wirelessly kill someone? ...."It was Colonel Mustard in the Kitchen with the I-Phone".
Apparently so! If people are able to make a public one-sided announcement where the shorting party gains from it being true, hire 'independent' testers who are paid if your trade is profitable, and bypass the defined procedures such as SEC and FDA, you can be sure it's going to be 10x or 100x worse behind the scenes. Fascinated to see what the SEC does, it will probably take a few weeks or months, if ever! Take on it is that Block does the same things himself which is how he finds them, but he's just really good at covering his tracks. If he made his name 'uncovering' problems in China then his 'followers' can't be the smartest bunch, you don't go to China for transparency! At least if he has the crowd on his side he covers himself, except that's what happened with CDS! You can't be a martyr and make money, it's an oxymoron, you pick your fights to make money and you pick your fights to be a martyr, you have to be really stupid (Dunning–Kruger effect) to do both at the same time on the same subject!
These guys short and cover most of their position minutes after their reports. Thats the business model. He doesn't give a shit about what the stock does after that, he already banked anyway
Here's DR Hemal Nayak who is the main source to this story. Seems that he needs to cough up 2.6 million pretty soon. Maybe STJ yesterday helped? http://www.nwherald.com/2015/02/26/...d-2-6-million-in-wrongful-death-suit/ak7j3i2/
"These guys short and cover most of their position minutes after their reports." agree, doesn't make it right but money is the be all and end all for most. The psychology behind it is quite interesting though. "Doctors determined in January 2007..." "surgery to insert the device was not scheduled until Nov. 7, 2007." "On Nov. 2, 2007, Russell Kotlarz died while driving" - that is one nasty fat tail event, poor family. This is the point, the environment has changed rapidly, what used to happen behind closed doors is now public, so that means what's now behind closed doors is toxic!