Noble and the Anonymous Analyst
I have been following with quite a bit of interest the saga of the anonymous analyst firm and its analysis of finances at Noble. Iceberg Research is supposedly a financial analyst firm. I say supposedly because it is virtually anonymous and so far as I can see it has only ever issued three reports – each a damning indictment of Noble. Iceberg also appears to have no history. It’s website’s archives begin in March 2015. People following the story will know that Noble believes that Iceberg Research is nothing more than a disgruntled ex-employee of the company and has taken legal action against that former employee and those it deems to be behind Iceberg Research, for ‘conspiracy to injure Noble Group.’ Whatever the truth regarding Iceberg Research and its allegations and, irrespective of Noble’s denials and rebuttals, its share price has dropped significantly since the first report was issued – around 30% in fact. As if that wasn’t enough, short seller Muddy Waters has piled the pressure on Noble by issuing a report saying that it was short Noble and picking up Iceberg’s allegations while making more of its own.
What I find intriguing about this is that while commodity firms like Noble are facing more and increasing regulatory scrutiny, it is apparently absolutely OK for an anonymous firm and a short seller of Noble stock to make allegations and accusations that erode Noble’s stock value and may in the end jeopardize its entire existence. Exactly how is that OK? Exactly how is that allowed to happen? On the other hand, aren’t analysts supposed to keep the companies they cover honest? So, if some of the allegations turn out to be true, can this series of events be somehow justified?
I’m all for financial analysts doing their job properly. I am all for weeding out companies that manipulate their financials and cheat their employees and shareholders like Enron did, but an analyst needs to stand up and be counted. It needs to have identifiable employees and liable owners, it surely needs to have a track record of careful, honest analysis and accurate reporting surely? And, while I am no lawyer, for a short seller to explain its position to the market is surely a blatant attempt at price manipulation isn’t it?
I continue to watch this situation closely because it isn’t just about Noble. It is about how our markets are regulated and kept honest and trustworthy. Something stinks about this whole affair and yet I don’t see any rush to find out just exactly what rotten meat is causing the stench by any regulator.
Opinions anyone?
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