Dan Loeb is Mr. Pink and more
I. Daniel Loeb, manager of hedge fund Third Point Partners
The Silicon Investor stock message boards have Mr. Pink.
The Yahoo Finance stock message boards have Mr_Pink_esq.
In this legal filing, hedge fund manager Daniel Loeb admits that he is the Mr. Pink of Silicon Investor.
According to this Wall Street Journal story, Loeb insists that he is not Mr_Pink_esq of Yahoo Finance.
Loeb, as it turns out, is not telling the truth, and here’s how I know it:
On Yahoo Finance, Mr_Pink_esq manually signs all his posts, as either “Mr. P$nk” or “MP”.
Mr_Pink_esq is the only message board poster who signs his posts as Mr. P$nk…with two important exceptions: ricardo_ferberger and senor_pinche_wey.
ricardo_ferberger
On the fourth post of his short career, ricardo_ferberger signed this post to Yahoo’s MEDC stock message board “Mr. P$nk”.
Interestingly, the post expressed a point of view that ran 100% counter to the strawman arguments typical of each of ricardo_ferberger’s previous three contributions, but was entirely consistent with Mr_Pink_esq’s well-established hostility toward MEDC.
Almost immediately, another poster asked ricardo_ferberger why he had used Mr_Pink_esq’s signature. Ricardo_ferberger responded by claiming that he had copied and pasted the entire text of this post by Mr. Pink on Silicon Investor – signature included.
Unfortunately for ricardo_ferberger, the post he claimed to have copied from Silicon Investor was actually time-stamped 14 minutes later than the Yahoo post that supposedly drew from it.
Two conclusions can be drawn from this episode:
- Ricardo_ferberger and Mr_Pink_esq are two aliases belonging to the same person.
- That person is also Mr. Pink on Silicon investor.
Because we know Mr. Pink on Silicon Investor is hedge fund manager Daniel Loeb, it stands to reason that Loeb lied when he told the Wall Street Journal that he was not Mr_Pink_esq.
Senor_pinche_wey
Though it went entirely ignored at the time, on one occasion, Yahoo Finance poster senor_pinche_wey also signed a post as “Mr. P$nk”.
Senor_pinche_wey@yahoo.com is the email address used by a former participant of several message boards dedicated to Ashtanga yoga – the style Loeb is known to practice.
Shockingly, even enlightened Ashtanga yoga practitioners have their limits, and – like so many on Yahoo Finance – many lost patience with Senor Pinche Wey. So much so, that one brilliant poster took steps to capture Senor Pinche Wey’s IP address, only to discover that it traced back to Third Point Management.
Indeed, senor_pinche_wey is Daniel Loeb.
This is significant because, as explained in an earlier item, senor_pinche_wey is the (previously) anonymous Yahoo message board poster whose defamatory writings led to a lawsuit and, ultimately, unfortunate legal precedents affirming the rights of childish and abusive stock message board trolls.
Now, for a little running up of the score.
As proof that old habits die hard, in this post to the India Divine Ashtanga Yoga message board, we see Senor Pinche Wey engage in an impressive act of logical contortionism as he tries to explain why he occasionally signs his posts there as “MP” (which is, as mentioned above, how Mr_Pink_esq occasionally signed his posts on Yahoo Finance).
II.Robert Chapman, manager of Chapman Capital
In the same Wall Street Journal story mentioned earlier, it’s revealed that Robert Chapman, manager of hedge fund Chapman Capital, posts on Yahoo message boards as bobbingbargain.
Based on evidence referenced in the same story, it’s apparent that Chapman also posts on Yahoo Finance message boards as kidstockjoec and LaseriumQueen.
A lexical analysis and the dissembler sorting algorithm reveal that the person behind kidstockjoec is also behind disgustedinvestor, tautologicaltrader, notably_absent, herniatedgorilla, and ghaulty_lodgick.
Daniel Loeb’s First Amendment Riot
In late 2005, I spent over four hours interviewing Overstock.com CEO Patrick Byrne as part of a podcast series on entrepreneurship I created.
After I published the audio of the interview, somebody posted a link to it on the Yahoo Finance message board dedicated to Overstock.com.
Seeking the origin of the resulting surge in downloads led to my first stock message board visit.
It was really strange.
What first struck me was the flurry of responses to the original posts in which users with foul mouths and bad attitudes warned that the linked mp3s contained computer viruses.
Of course, no mp3 has ever carried a virus, as I’m fairly certain the posters knew.
These were followed up by all manner of lies meant to discourage others from listening to any of the three Byrne interviews I would eventually publish.
Worse, they posted all manner of lies about Patrick Byrne personally – something I was in a unique position to recognize having just interviewed him at length.
Intrigued, I started examining the posting histories of the most prolific sources of this disinformation, trying to identify patterns that might in turn reveal their underlying motives and, often enough, their real identities.
Well over two years later, I remain engaged in the same pursuit. And, to be frank, I suspect that by now, I understand it better than anybody else, largely because of a few methods I've developed and the great amounts of information I’ve received from others.
What follows is a little bit about what I’ve learned.
First: just as there are dishonest people paid to post lies on stock message boards for the purpose of artificially boosting share prices, there are also bad people paid to post lies on stock message boards for the purpose of artificially lowering prices.
In the case of the latter, they are either paid outright as contract “stock researchers”, or paid in put options (which increase in value as a company’s stock drops in value).
Second: make no mistake, it’s short-biased hedge funds who are paying these stock “bashers” (as they’re often called).
Third: in some cases, it’s actually the managers of these short-biased hedge funds doing the bashing.
Consider the following notable example.
I’ve previously written about evidence received demonstrating that hedge fund Third Point, LLC contracted with convicted stock fraudster Michelle McDonough, whose duties included coordinating the efforts of message board bashers and inducing certain captured journalists to report negatively on targeted companies.
I’ve also written about Third Point founder Daniel Loeb’s well-known history of posting on the Yahoo and Silicon Investor stock message boards under the alias Mr. Pink.
Before getting to the rest of the story, here’s some background.
About the same time I first visited Yahoo Finance, a company called SFBC International (now PharmaNet Development Group) came under a blistering attack by Daniel Loeb, who very publicly announced Third Point’s sizeable short interest in the company.
SFBC got hit from all sides, and its share price withered.
In particular, there was a deluge of libelous (though tame compared to others I’ve seen) posts to Yahoo’s SBFC message board. Most notable were the attacks leveled against then-SFBC Chairwoman and President Lisa Krinsky.
Krinsky responded by filing a lawsuit against ten anonymous posters: Does 1 through 10.
In order to discover the identities of the ten Does, Yahoo was served with a subpoena.
In accordance with policy, Yahoo alerted the posters, giving them two weeks in which to contest the subpoena – an expensive proposition few bashers have the financial ability to pursue.
And indeed, none of the ten Does opted to put up a fight.
With one exception: Doe number 6, known on Yahoo Finance as Senor_Pinche_Wey (which is a slang Spanish term that is as obscene as you can imagine).
A typical post by Senor_Pinche_Wey reads:
…I will reciprocate [fellatio] with Lisa [Krinsky] even though she has fat thighs, a fake medical degree, "queefs" and has poor feminine hygiene…
Doe-6 fought the subpoena, was rejected, and appealed to California’s Sixth Appellate court.
Clearly, Doe-6 had some resources backing him up…to say nothing of a deep motivation not to be exposed.
And, fortunately for Doe-6, his appeal was successful and the subpoena was quashed.
This decision – handed down in February of this year – essentially affirms the First Amendment rights of message board bashers to say whatever they want about the officers of public companies. (An excellent analysis of the decision can be viewed here.)
In their decision, the Court noted:
We likewise conclude that the language of Doe 6's posts, together with the surrounding circumstances -- including the recent public attention to SFBC's practices and the entire "SFCC" message-board discussion over a two-month period -- compels the conclusion that the statements of which plaintiff complains are not actionable. Rather, they fall into the category of crude, satirical hyperbole which, while reflecting the immaturity of the speaker, constitute protected opinion under the First Amendment.
Interesting.
Ready for the other shoe to drop?
I’ve learned, through multiple sources, that the immature speaker in this case, Doe-6 (aka Senor_Pinche_Wey) was none other than Daniel Loeb himself.
As a matter of fact, Senor_Pinche_Wey is one of many abusive message board identities used by Loeb to harass officers of companies Third Point was shorting, often illegally.
On August 12, 2005, Patrick Byrne first publicly accused several hedge funds of working in coordination to illegally manipulate the share price of Overstock.com and many other small, public companies. Within 48 hours, armies of bashers arrived for the first time on the Overstock.com stock message boards across the web, all working off of a the same obvious set of talking points. Among the points these bashers took the greatest care to make, time and again: that Byrne was crazy for thinking that any two hedge funds would ever work together when shorting.
In case there are any doubts left regarding Byrne’s claims, I invite you to look at this message board exchange, between Senor_Pinche_Wey, LaseriumQueen, bobbingbargains, disgustedinvestor, kidstockjoec, jidoo, and Polytechnic_Trader.
What makes it so interesting is that at least 72% of the participants are hedge fund managers shorting the company they’re smearing.
Specifically, Senor_Pinche_Wey belongs to Daniel Loeb, while LaseriumQueen, bobbingbargains, disgustedinvestor, and kidstockjoec all belong to Robert Chapman, founder of hedge fund Chapman Capital.
Polytechnic_Trader and jidoo may or may not belong to Loeb or Chapman...I don't know either way.
I do know that Chapman also posts under the aliases tautologicaltrader, ghaulty_lodgick, notably_absent, and herniatedgorilla – all of which can be seen, time after time, posting things I’m quite certain Chapman would not dare say in person.
Do hedge funds coordinate their attacks?
Yes.
And as you'll read in a soon-to-be-published-post, message board bashing is only the beginning.