When a blogger got hold of Research In Motion Ltd.'s latest product offering – a BlackBerry flip phone that suggests RIM is entering the cellphone market – and published pictures of it on Wednesday evening, RIM's stock went wild the next day as word spread. But as Mark McQueen noted on his own Wellington Financial blog, the product leak is a public relations coup but a potential disclosure nightmare.
The Boy Genius Report, the blog that unveiled the new phone, stayed mum on where it got the pictures of the new phone – but presumably it didn't just find them lying around somewhere.
“BGR knows all,” Mr. McQueen said. “And the only group that truly knows all, and benefits from each and every exclusive BGR leak, is the mighty RIM itself.”
That creates a potential regulatory problem, since a lot of investors made big money on Thursday's jump in the price of RIM shares – and some of them, presumably, could have made that money on inside information.
“It may well be that the BGR team doesn't invest in stocks at all – as the lack of disclosure on the BGR blog about stock ownership positions is often taken to mean that the blogger in question doesn't own a stake in the business he/she is writing about,” Mr. McQueen said.
“But if you're RIM (or the advertising agency handling the brown envelopes), and you are actually involved in making BGR famous, how can you be sure that no one is trading on the product leaks as you pursue your guerrilla-type marketing campaign?”
Indeed, since Thursday's rally added $3.5-billion to RIM's market capitalization, it is hard argue that the leak of the phone was not material information.
“The regulators would certainly care if a leaked takeover bid moved a stock $3.5 billion. It won't be too long before they start to get grumpy about this stuff, as well,” Mr. McQueen said.
A spokesperson at RIM could not be reached for comment on Friday afternoon.
