- Editorial Commentary -

December 4, 2010 (FinancialWire) (http://www.financialwire.net/) (Investrend Forums Syndicate) (By Todd Essary) (Entire post at http://www.investrendsyndications.net/12-content/manl/essary/2010/12/php/04.php) — The way information is disseminated through the financial community, particularly as it applies to the stock market and publicly-traded companies, is indicative of root issues that have grown into major problems in recent history. Stated simply, press releases are making their way into the “news” sections of most financial portals, and being called news. Not only are those non-journalistic releases ending-up being published as news, and not only are they being featured prominently, but it is often the case that press releases amount to the only readily available source of information for the investing public.

There was a time when press releases were issued to the press (hence the term: press release), and then left for true news sources to filter and re-manufacture into something shorter on hyperbole and longer on facts than the originally-submitted copy. In fact, back in those good ‘ol days, a more factually-based press release was more likely to get picked-up by the press, because it would take less effort for an editor to dismantle the window dressing.

Consider the source of a press release. In the case of public companies, the source is the companies themselves. With the exception of compliance-oriented information, which is required to be publicly released by public companies, I have never seen a press release that gave a public company anything other than a glowing review. And why not. If you were to issue a press release about yourself, wouldn’t you paint a nice, rosy a picture of you, too?

The way things are set up — the way news is handled — reflects a core disconnect in the stock market mindset. One clear example is demonstrated in the way press release distributors, such as Business Wire and Marketwire, have been manipulated by public companies to require independent research firms to get permission from any particular company before issuing a release announcing the publication of a report about that company. An independent research firm is much more likely to produce fundamentals-based, unbiased information about a company, and yet the companies are being allowed to crack the whip on the research firms. Then, on the other hand, companies are able to take a report published about its stock and issue an out-of-context press release, without needing any permission whatsoever from the research firm.

It all amounts to plain and simple backward thinking. Financial portals ridiculously sparse or real news. Companies riding herd over research firms, and writing news about themselves.

There are some “old school” entities that have evolved from newspaper pages and into the ether. Real news sources, dedicated to pure, no-frills journalism. Fighting the good fight and standing up for Cronkite-, Huntley-, Brinkley-esque values that used to be the news standard. I am writing for one of them right now. But don’t look for this article among the featured, spotlighted posts of any major financial portal. Heaven forbid something like this — properly identified as editorial, originating from a third party, and standing up for what is right — should wind-up somewhere like that.

Source: (http://www.investrendsyndications.net/12-content/manl/essary/2010/12/php/04.php)

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