Why?
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Why?
Rocky Agrawal, who writes regularly for VentureBeat, is getting some criticism on Twitter for slamming Groupon repeatedly without disclosing that he has financial bets against the company.
A recent post – Why Groupon Now won’t work, where he heavily criticizes the company. Or yesterday – Why Andrew Mason is still wrong about Groupon’s prospects, where he again criticizes the company.
None of these posts have any disclosure of his short position or various bets on the company’s downfall. He does list all of those on his personal blog. One example: “I have a bet with Mark Rogowsky that Groupon goes to zero by 4/5/13. I can claim early if it is delisted for being worthless.”
He also apparently attempted but failed to get directed shares in the IPO at the offering price. Which is weird (that he tried) given how negative he is on the company.
VentureBeat, which has occasionally (and erroneously) criticized TechCrunch over ethical issues, needs to button this up.
The issue isn’t that Agrawal has a short position and is criticizing the company, in my opinion. Transparency in such a situation is fine by me (the SEC might be a different issue). The issue is that there’s no disclosure in the post, or even on the author page. And his personal blog isn’t linked from that author page, either.
The disclosure needs to be right up front in each and every blog post he discusses Groupon. Anything else is dishonest and unfair to readers and Groupon.
I note with interest that Agrawal thought the Yahoo CEO resume issue was about Silicon Valley snobbery over computer science degrees. It wasn’t about that, it was about the character of the man running Yahoo.
Similarly, this issue isn’t about the conflict of interest (to me at least). It’s about the failure to disclose it in the posts.
I should also add by way of disclosure that Agrawal wrote guest posts for TechCrunch for a time in 2011, before their IPO. We stopped working with him for a variety of non-ethical reasons.