Certainly at least in theory, one of the best things about being a “chartist”, is that as far as the state of a company’s shares is concerned, you should, in theory, be more objective than most in “the market”. Indeed, the only real bias you may have is that after making a certain call on a stock (bull or bear), and which then goes on to slap you in the face, that there may be some ill will on one’s part and so a clouded view.
As far as video advertising group Blinkx (BLNX) is concerned, my personal history has been a happy one in the sense that it was easy to recommend the stock early last year after a higher low above the 200 day moving average in the 60p zone, and then an unfilled gap to the upside in February last year around 80p. The result of both the calls was a peak for the stock above £2.30 by November 2013. So far, so good.
Unfortunately for the bulls, it would appear that “fun-da-mental” factors have come into place since then, most notably in the form of Harvard Business School Associate Professor Ben Edelman whom we interviewed in the March edition of our magazine (see here -http://issuu.com/spreadbetmagazine/docs/spreadbet_magazine_v26_generic). As most of us may be aware, people of the IQ of Mr Edelman are not normally those we should be arguing with on any subject in the hope of winning, not at least without being very well informed indeed.
This warning would be just as relevant whether the topic was the true value of a loaf of bread, or in this case, the intricacies of online advertising. A taste of the brains of the man can be found in our interview with him. The interview was carried out at the time of the big share price collapse for Blinkx, and looking at the daily chart at the moment, it can be said that things are looking rather precarious again…
Indeed, any weekly close below the former January support at 85p could lead to a sub 50p target given the present trajectory of the shares within a falling trend channel from November. At this stage, only sustained price action back above the present position of the 10 day moving average at 100p would even begin to delay such a painful sounding downside.
Of course, it can be argued that the current plight of Blinkx is not so much a technical one but really a consequence of a battle between Edelman and the company, complicated by the business model and the way that its revenues are generated being not particularly easy to understand. Certainly if you are a layperson (like me!). Although you may not have to be a Harvard Professor in order to understand the nitty-gritty of how Blinkx operates, it would certainly help.
Ironically, in the wake of the latest revival of the accusations against the company, Blinkx pointed out factual errors made by the moral crusader / “Web Sheriff” and therefore, it would appear that even being an Associate Professor in Harvard Business School does not necessarily guarantee a full understanding of this private investor favourite company.
From my perspective though, the Blinkx affair has raised a number of issues, not only about the company itself, but also how even in an age of information overload that it is still relatively difficult for a definitive opinion to be delivered on any subject. It is also the case that I may not be quite as morally squeamish regarding Blinkx versus Edelman as I would have been even a few years ago in an era of MPs expense fiddling, BBC license fee wasting, Libor rigging / bank bonuses for losses, horsemeat in food, NSA spying, and the annexation of the Crimea. To name a few!!!
On this basis, I have as little concern regarding the alleged intrusive ad units of Blinkx as I do with the obvious enjoyment our charming Professor has for being in the public eye and am happy to excuse the odd mistake he might make in his research. Of course, we may feel for those investors who are long of the stock at higher levels and are currently offside in quite a painful fashion, but it is not as if the risks and the rewards of the AIM market are a big secret. Caveat Emptor remains one of the great concepts in the financial world; if only those in the FCA and beyond would allow it to work…