Who do you trust in the Internet age?
My last post - Don't be a sucker when it comes to stocks - ruffled quite a few feathers among investors of a certain stock. There were comments and emails - mostly calling into question my journalistic integrity - but a few of them also told detailed stories about the company's situation. That's today's topic.
Just like people, every company, every stock, has a story, and everybody tells it differently. In each story there are facts, an anecdote or two, and of course, opinions. Some of them are so fascinating that people write articles, entire blogs, or even books about them.
But when you're considering joining or investing in a company, or buying a product, how do you know which stories to believe? Everybody's famous in the Internet age, so how do you know what information to base your decision on. It's harder than you think.
In a past life I was a marketing executive. As such, I told stories for a living. It was my job, among other things, to tell my company's story so its unique value proposition was crystal clear. That was never easy, but I learned a lot doing it.
One thing I learned is that you can find stories that are positive and stories that are negative about every company out there. For every poor performing company, there are marketers that will tell you why its prospects will improve. For every underperforming stock, there are investors that will tell you why the market has it all wrong.
Moreover, for every product, there will be positive reviews and negative reviews. Again I ask, how do you know who to believe?
When I worked for Rambus, in addition to telling the company's story, I had the pleasure of reading those of some of the most astute and aggressive investors on the planet. Just check out this prior post or the RMBS message board at investorvillage.com and you'll see what I mean. They make the folks with the ruffled feathers from a few days ago seem tame by comparison.
In a past post I told folks not to believe everything they read. Now I'm going to give you five things to consider when evaluating a story about any product, company, or stock. While simple, these tips will help you weed through the seemingly endless stories you're bombarded with every day. They'll make your decision-making a breeze:
Consider the source. This seems obvious but few people really do it. If the source has a vested interest in a particular viewpoint, then you should of course be skeptical. If they're trying to sell you something, well, do I really need to say it? Don't believe it. And just because you saw it on TV or read it on the Internet, doesn't mean a darn thing.
Does it pass the smell test? That means do your own reality or reasonability check. If it sounds too good to be true, it probably is. If it walks like a duck and quacks like a duck, it's probably a duck. If something strikes you as odd, or out of place, that's called a red flag. Pay attention to it.
Do your own due diligence. If you're making an important decision - like joining a company or buying a stock - find one or more objective viewpoints or sources of information that you feel comfortable with before making a decision. Play devil's advocate, if you have to. And again, discount or flat-out ignore those with a vested interest.
Try using logic. For example, if a company or stock is supposed to be the next Google, or if a product is supposed to be the next big thing, consider the probability of that statement being true and act accordingly. If a product is supposed to cure cancer or grow hair, consider the magnitude of the discovery if the claims were somehow true. You wouldn't be hearing about it in an infomercial, would you?
Take your time. Everybody who's trying to sell you something, talk you into a job, or get you to buy a stock, will pressure you. Not only that, but you may even pressure yourself. Don't succumb to it. Take a deep breath, take a step back, look around, get some sleep, check other sources, whatever, just take your time. Everything looks different in the morning, or in the light of reason.
Sure, these tips seem obvious, but you'd be surprised how many decisions supposedly intelligent people make every day without considering them. All it takes is for one person to tell them a story and they're hooked. Why are people so gullible? Sorry to say, but I really have no idea.
Steve Tobak is managing partner of Invisor Consulting LLC. He is a member of the CNET Blog Network, and is not an employee of CNET. Disclosure. 
Then you further expound on this interaction with PTSC investors with today's offering, which while it doesn't specifically mention the company, you imply was effected by the comments you received back from PTSC investors. In it, you indicate that people shouldn't beleive everything they read, that they should consider the source, do DD, and use logic. Yet you continue to refuse to follow any of those rules with respect to clarifying what you clearly misrepresented about PTSC's current status.
What you should clarify, in order to be "crystal clear", is to note that PTSC has put over 300 companies "on-notice" that they infringe on PTSC's IP. You should also note that of those more than 300 companies, 44 of them have signed license agreements with PTSC and its partner. Of those 44, you should note that 5 of them (and affiliated entities), bohemoth's all, fought in court trying to avoid having to license, claiming the patents invalid or that they didn't infringe. Of those 5, 2 and a half decided to settle early and avoid protracted legal battles, and treble damage risks. Fujitsu paid over $30M for that right. Sony over $10M, and part of NEC over $15M. Furthermore, after a very successful Markman hearing in PTSC's favor, and after further maneuvering by the remaining infringers, all of them decided to settle just prior to going to trial. So the likes of Toshiba, Matsushita & JVC, and the remaining NEC entity, after a 2 year battle, decided they wouldn't win the court battle, and instead settled. Since the settlements in late December, another 10 companies have signed license agreements. While the first 25 license agreements represented over $214 MILLION in license fees, roughly half of which PTSC gets (the other half going to its partner TPL), the other 19 (including the settlements) have yet to be reported though approximately 16 of them will be revealed in the pending quarterly financial filing for PTSC. The filing represents what should be a watershed moment for PTSC and could well launch it past its IPO share pricing that you so derisively tried to reconnect it to in your piece.
These is just some of the "DD" and "logic" that comes from a variety of confirmable and independent "sources" that pass the "smell test" and have proven true over "time". Your refusal to include them to create a crystal clear view of PTSC, but instead to imply again today that somehow the objecting investor's views are somehow flawed shows your unwillingness to accept that you misrepresented PTSC by including it in your original piece, and that by continuing to do so, YOUR motivation and YOU as a source should be questioned. PTSC investors have justifyably done just that. Hopefully, your comment hasn't obfuscated the "value proposition" that PTSC really is.
Mr. Tobak, I'm sure you have a wonderful resume and many real accomplishments in your career. But you stepped in it this time. I've heard your reasoning now for what you wrote in your first article. Fine. But you hanen't learned. You didn't apply one of your 5 points in this article to what you wrote about in your previous article. Not one. You wrote an oversimplified article on publicly held companies without even applying your own very valid 5 points that you would have the rest of us do.
As a person with a presence in the industry and having this very public forum to spout your views, you should be much more careful in what you say. You have the power to positevely or negatively effect the share prices of publicly held companies, and the investments of thousands of people. Mr. Tobak, if you're going to talk the talk, then walk the walk. Apply your own 5 points to yourself before you spout off and possibly do damage to companies and thousands of peoples investments. You wonder why there are "ruffled feathers" out there, look in the mirror my friend. Look in the mirror....
- by Wink Junior April 3, 2008 4:53 PM PDT
- PTSC employees? Stockholders hoping some day to get that 80% loss back? Up 20% - sure, when your stock price is like $0.35 and you've been delisted, a 20% gain is easy - someone paid $0.04/share more to buy some.
- Reply to this comment
-
(6 Comments)Frankly, PTSC belongs on the list as an example of "startup" that really still is a startup but tries to pretend they're not, because they've been around for more than five years (although still losing money) and have some clients (although not enough to pay the bills.) I run into these all the time - survivors of the Dot-Bomb crash who think because they made it through that era and are still around, they're no longer a VERY high risk startup venture.
When their stock is listed on an exchange, they're making enough net profit to pay everyone's salaries plus more, and have a solid product and growing client base, then they get some credit. I, for one, am sorry to see the author cave under pressure and remove the list, just because desperate investors in one of the companies have a different opinion. If they were doing so well with that stock, they wouldn't be complaining about the listing in the article - they'd think, as I often do, "Good - I can buy more stock at a cheaper price." Personally, I like when companies I think are good long-term investments get bad press - keeps their stock affordable.
Methinks PTSC stock-holders doth protest too much.