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Dow Jones & Company's (NYSE: DJ) Wall Street Journal (a.k.a., The Towel) occupies a unique spot in the media firmament. As I pointed out earlier in the year, it changed its footprint and now looks to me like a Holiday Inn bath towel. Towel Talk offers a perspective on its news and views.
The New York Times [registration required] reports this morning that The Towel held back the news of News Corp.'s (NYSE: NWS) $5 billion bid for at least a week before General Electric Co.'s (NYSE: GE) CNBC announced it on April 30th.
Why does this matter? Because someone traded on the inside information. For example, on April 25, an investor made a single purchase of 280,000 Dow Jones options, far more than are typically traded in a day. That investor was sitting on a paper profit of $4.6 million as of last Friday. So who knew about the bid prior to April 30th?
Federal and state officials are investigating.
The answer to that is still being investigated -- because those who profited from those options trades were likely among the insiders. According to the New York Times, those in the know included The Towel's CEO, top editor, incoming top editor, publisher, deputy managing editor, and Money and Investing Editor.
Once the bid was submitted, it was disclosed to the Towel's entire board as well as at least a half dozen senior executives on its business side. And advisors to the deal which include bankers and lawyers also were in the know prior to the 30th.
Who knew what and when and how did they know it? These are questions that The Towel could do a great job answering. But it probably won't.
Peter Cohan is President of Peter S. Cohan & Associates, a management consulting and venture capital firm. He also teaches management at Babson College and edits The Cohan Letter. He owns General Electric stock and has no financial interest in the other securities mentioned in this post.
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Reader Comments (Page 1 of 1)
5-08-2007 @ 4:50PM
Mark Richert said...
I think you are full of "S". The oil cartels have said they would not boost their production because supply to their point of view is just fine. Who ever you are, you must have money in oil and are pumping the oil stocks!