Under yesterday’s post “Henk Van Alphen: Once a scammer, always a scammer“, one commenter asked, “Who are the other major perpetrators of these types of PR/faux-analysis as objective coverage schemes?” The short answer is that there are too many to count these days, we’re at the point where you should assume that if it’s not coming directly from its own IR department or an established sell side brokerage, your junior is paying to get its story in front of your face.
Instead, for an example of scamster modus operandi let’s stay with long-term market shyster and Bill Cara’s best pally pal, Henk Van Alphen, as World Copper (WCU.v) offers neat insight on how scamsters use sleight of hand to hide pay-to-play schemes. The good news is that, due to Van Alphen’s dumb mini-me Nolan Peterson showing the company’s dirty petticoat yesterday, half our work is already done as we know…
- WCU has paid Zack’s Small Cap Research U$30,000 for coverage
- WCU has paid Fundamental Research Corp C$40,000 for coverage
And by some astounding coincidence both firms think WCU is the veritable Bee’s Knees, both firms opened coverage on the stock in January 2022 and both rate it a Buy, with Zack’s slapping a U$2.03 price target of WCU and Fundamental Research Corp (FRC) going for a C$2.02 target, in other words a double-plus. But that’s only the start of the fun, because both new reports were immediately picked up by Proactive Investors on the day of release. Then Proactive Investors runs “What The Brokers Say” articles on each report write-up but, instead of talking about WCU, they talk about Zack’s and FRC talking about WCU. This subtle difference allows Proactive Investors to highlight all the good things written about WCU by these “independent researchers”, but not a single mention of the money changing hands in the background. Please feel free to check out the Proactive on FRC on WCU here, then Proactive on Zack’s on WCU here, as despite being written by different people (impossible to use “reporter” or “journalist”) the scripts are remarkably similar in style and substance. Both Proactive Investor pages have upbeat titles, both talk about Zack’s and FRC’s research paper in the third person, both make sure the reader sees the juicy price targets, but in a strange coincidence neither report mentions FRC or Zack’s are being paid to pump WCU in such glowing terms.
Then for most fun, keep scrolling down to the very bottom of each Proactive Investors page, then click another link, then scroll to the bottom of a long text to discover WCU is also paying Proactive Investors to the tune of $25,000 per year. In other words, WCU pays Proactive $25,000 to talk up research reports from companies paid $30,000, and $40,000 respectively to write research reports, with Proactive doing its darndest to hide all financial motivations paid by WCU.
Are we having fun yet, Henk?