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Tag Archives: Gradient Analytics

The shock and outrage in the wake of Cramer’s subpoena-ripping is quick.  Not by the media or the public at Cramer for the stunt, mind you, but by Mitchell at the rest of the media for circling the wagons around America’s favorite bald Wall Street gnome. Jesse Eisinger, another alum (DUN!) is specifically cited as claiming the subpoena is an attack on free speech, although Mitchell’s argument for (presumably) disagreeing, if he has one, isn’t included.  I guess he’s counting on the reader to reject First Amendment arguments on their face, if they might cause share prices to fall.

Mitchell goes on to note that Gradient Analytics provides the data for automated stock evaluation tools on both the MSN website as well as that of CNBC; MSN, for one, has been using them as a data source from 2001 to this day.  I suppose the goal here is to frame Gradient as the powerful bad guy and the likes of Byrne and Overstock as the scrappy underdog.  Otherwise I can’t imagine why Mitchell would choose to highlight the fact that Gradient’s prestige has hardly been diminished by any of the past couple of years of proceedings.

Wait, Mitchell actually does have another revelation: Gradient is just a puppet of David Rocker, and apparently every single stock rating is personally dictated by the man.  That’s… an interesting take.  He also goes on to cite the “serious” accusations made against Gradient, and, for no apparent reason other than to mention his name again, Herb Greenberg.

Mitchell seems to be out of gas on this topic, though, so he switches gears and goes into a bullet-point recitations of “facts”.  Most notable among those is Cramer’s claim to have never even heard of Gradient.  Now obviously, after the subpoena, Cramer had most certainly heard of them.  Yet Mitchell only speaks in the present tense of what Cramer and his associates have to say about them.  Did he actually interview Ms. Quick prior to the February subpoenas?  Or is he just trying to confuse the reader about timelines?

Another point is devoted to Jon Markman, who’s been around quite a bit on Wall Street.  Mitchell claims that Markman ran a hedge fund (in other narratives he uses the adjective “dodgy”, for no other reason than to add an extra touch of nastiness) out of the “back office” of Gradient, although the only documented connection was Markman co-developing the MSN StockScouter, cited above, back in 2001, a year before he started his hedge fund.  Still, even if there was some time overlap, that hardly constitutes Gradient running Markman’s hedge fund, as Mitchell asserts was the case.

At any rate, most of the rest of the “points” Mitchell makes amount to a bunch of “if” assertions to allege-without-alleging more misdeeds on Markman’s part.

The bottom line appears to be that Gradient today is an extremely well-respected research firm, whose reputation has only flourished since Byrne’s flashy accusations against them, and Mitchell hates every bit of it.  So much so that he concludes the section with a complete change of direction, claiming that “a Gradient manager” has used “multiple aliases and IDs” to somehow mask unspecified “activities”.

I can only presume that this refers to message forums on the Internet.  It’s a popular myth that it’s somehow a key part of hedge fund activity to trash-talk stocks the fund is short on message boards; so much so that it’s become practically cliché to ask a message board poster who voices a bearish opinion on a stock, which hedge fund he or she works for.  It’s a weird dichotomy in a way, as the accusers assert, often simultaneously, that the bearish opinions (regardless of how well-supported or not) have no effect on the stock, yet that it is still vital that the negative opinions be discouraged.  And yes, this brings us right back to the overarching theme of this movement, the denial of speech to anyone holding a negative opinion (much less a position) in a stock.

And it should go without saying that bullish posters can be and are equally “guilty” of multiple-alias usage.  Indeed, Mitchell knows full well of the activities of one of his closest allies on that score, which actually take that activity to another, far more insidious, level.  But as we will not be introduced to him for some time yet, I will leave it there for now.

Next week: A trip back to happier times.