Lucchetti and WSJ's "Sick Sigma"
On 4/20/06, the same day that NYX reported impressive numbers, WSJ's Aaron Lucchetti continued to showcase his propensity to speculate as well as his seeming reluctance to report factual information.
Today, The London Stock Exchange said it had not been approached by NYX about a possible offer. This report contradicts recent speculation by the WSJ that NYX was in talks with LSE about striking a deal.
In fact, LSE said it was responding to press speculation and said "it has not received an approach from the New York Stock Exchange about a possible offer" (source: WSJ, 4/24/06).
"They [NYX shareholders] know they'll get at least a stake in the biggest stock exchange in the world, a small business in stock options and a budding effort in bond trading. But they may also be getting a piece of a business that could look substantially different in the months and years ahead: The NYSE has talked to London Stock Exchange PLC and European exchange operator Euronext NV in recent weeks about possible deals or alliances. And Mr. Thain has also made clear that he's interested in buying a U.S. derivatives (or futures or options) operation."
To be sure, NYX is smart and methodical. In due course, facts will prevail. If you're new to NYX please refer to some of the archives on this blog to see for yourself just how often the same reporters and analysts are wrong about their speculation about NYX.
At what point do reporters and analysts that are consistantly wrong stop getting handed the megaphone?
REGULATION FULL DISCLOSURE
Reg FD requires that material information about a public company be communicated to all investors at the same time. Certainly, speculation can create drama. And, drama certainly helps sell papers. Thing is, the reputation of a paper relies on the quality of its reporting. Not naming sources, reporting information that is simply not true, and consistantly being wrong with your commentary has an impact on the quality variable.
It's odd that in today's WSJ piece about the LSE announcement that they'd allude to an article that Lucchetti wrote on 4/16/06 that cited a couple of lines from a recent NYX filing regarding the upcoming secondary as the catalyst for speculating that NYX and LSE were in talks. It's odd because on 4/20/06 Lucchetti reported that "the NYSE has talked to the London Stock Exchange PLC." This assertion by Lucchetti, as we've now learned, was purely speculation and not rooted in fact. Here's what WSJ writer David Weidner wrote as he tries to do some damage control:
"The Wall Street Journal reported April 16 that NYSE is in talks, presumably with the LSE The Journal cited a Securities and Exchange Commission filing by the NYSE that read: "We are currently engaged in discussions with certain participants, although no definitive terms have been discussed or agreements reached." The report also cited anonymous sources saying the exchanges were conducting informal talks."
If Lucchetti's quality controls are any indication, one might classify WSJ's style of QA, or lack thereof, as "Sick Sigma."