Why is Mark Cuban so ... well, so Mark Cuban? Why is he so focused on Mark Cuban all the time? The latest example of this is really disappointing because it sullies what otherwise is a noble effort on his part.
Cuban has bankrolled a new blog, Sharesleuth.com, which is written by longtime business journalist and former St. Louis Post-Dispatch reporter Christopher Carey. The site's stated goals are "to shine a spotlight on questionable companies, to build an audience through unique, compelling stories" about the business world. Carey writes that his efforts have "a clear bias -- against deception and corruption."
That's good. It's one of the things that good investigative journalism is all about.
But then Cuban cast a dark shadow over the site's first major investigative effort: a nearly 6,000-word (that's very long) piece posted Aug. 7. The extensively researched story, with links to back-up documents, examined Xethanol Corp., a company that says it makes ethanol out of "biomass" -- meaning various kinds of trash, some of it now being sent to landfills.
The story says that Xethanol hasn't backed up its promises and questions the background of some of the people connected with the company. Xethanol responded Thursday on its own Web site ( www.xethanol.com), saying that it does indeed produce ethanol -- lots of it -- and that the people criticized by Sharesleuth are good folks.
That's a part of journalism, too. People and companies get to respond when they take heat.
What's not journalism is what Cuban did.
Knowing that the Sharesleuth story was coming out, he invested about $126,500 in a short sale of Xethanol stock. That means that he borrowed shares (10,000 of them) and sold them. It means that he could make money if the stock value went down, when he would buy cheaper shares to pay back what he borrowed.
It means that Cuban and Sharesleuth left themselves open to the charge that the story was simply an effort to drive down the price of Xethanol stock so that Cuban could make money. It damages Sharesleuth's credibility, which is a big thing in journalism -- in fact, it's the whole thing.
Cuban and Carey disclosed when they launched Sharesleuth on July 1 that Cuban would be doing this sort of thing. Cuban also attached a note to the end of the Xethanol story disclosing his investment dealings related to the company, and another such disclosure was embedded in the story itself. Full disclosure helps, but it doesn't heal all wounds.
It's too bad that Cuban couldn't let his investment in Sharesleuth stand on its own. He had to use it as a tool in a side deal to make himself a few more bucks to add to the gigazillion that he already has.
In the process, he cast doubt on Sharesleuth's efforts.
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