Message boards often have false information
Wilmington (Del.) News Journal
One anonymous message calls the new chief executive of Hercules Inc. "the used car salesman of corporate America."
Another suggests filing a class-action lawsuit against MBNA Corp. for "balance transfer rip-offs."
Yet another hints that the DuPont Co. is about to swap its drug division for the farm chemical business of Aventis.
That's life on anonymous financial message boards — an endless stream of rumors, gripes and dubious investment advice.
Message boards, where Internet users can gather to trade information about specific companies, have become extremely popular. Internet portal Yahoo!, where a board can be found for just about every publicly traded company, says hundreds of thousands of messages are posted every day and can be read by anyone with Internet access.
The postings are generally harmless pokes at top executives or stab-in-the-dark predictions about a company's stock performance.
But occasionally they can cause serious problems. Federal regulators have prosecuted posters who used boards to manipulate stock prices. And executives are becoming more aggressive in responding to false or damaging messages.
For the most part, companies do not like to talk about message boards or postings, for fear of validating the ranting that take place.
Hercules, for example, refused to comment when someone posted a message about layoffs at the company and concluded with a line about workplace violence that could be perceived as a threat.
The posting highlights a growing debate about message boards: Should the musings of posters with user names such as "I love PCBs" be considered free speech, protected by the Constitution? Or should there be limits to what people can post anonymously about publicly traded companies?
In recent months, several companies have sought to discover the identities of posters so they can sue them for slander.
And in early May, three small companies banded together to retain an attorney to sue anyone posting libelous information about their businesses.
"We've been a victim repeatedly of false and erroneous information. It's annoying and it's distracting," said Alex Kanakaris, chief executive of California-based Kanakaris Wireless Inc. "We'll go after anybody who's damaging a company or conspiring to manipulate a stock."
To date judges have been hesitant to force message board hosts to reveal the identities of posters, ruling that anonymity is an important protection of free speech.
The right to post messages anonymously has been defended by the ACLU and an Internet privacy group.
"These exchanges (on message boards) can be very heated and ... are sometimes filled with invective and insult," foundation lawyers wrote in a court case involving Medinex Systems Inc. "However, most things, if not everything, said on these types of message boards are taken with a grain of salt."
Idaho-based Medinex filed a defamation suit in March against anonymous message posters. The company is awaiting a ruling on its request to discover their identities.
A Yahoo! spokeswoman said the company does not monitor its boards, but it reviews messages if it receives complaints and removes postings that violate the Web site's policies. Its terms of use prohibit any postings that are threatening, harassing or libelous.
"There are hundreds of thousands of messages posted every day, and a very small percentage turn into something that needs to be taken down," said Shannon Stubo.
The Hercules posting about the layoffs was quickly removed from the message board, but Stubo would not comment on why.
If the company has something to tell investors, it will do so in a globally distributed press release, said MaryBeth Alvin, director of investor relations for Cephalon Inc.
"You will never see Cephalon respond to a message on a chat board," Alvin said. "It is the unwritten practice among investor relations professionals — more companies than not will not respond to any messages on a chat board."
