Media Misread Borders' Earnings Report
08/27/08 - 12:09 PM EDT
Marek Fuchs
We are just looking at one company here, but it is representative of many in the current era: The company reports, blaming its troubles on the slower larger economy.
And what do you know? Some of the company's troubles are due to that slower larger economy. But there are other factors as well, factors that have been hanging over the company, in a difficult business to begin with, for a long time and, in recent years, with increasing fury. When the business media amble along to cover the earnings, though, guess what? You don't really have to guess, do you? They play their sad little role as stenographer, pointing an accusatory finger at the economy just as their corporate overlords did -- without demonstrating the simple vision and morsel of independence that it would take to go ahead on their own and mention the other factors, even as possibilities. Welcome, in this case, to Borders(BGP Quote - Cramer on BGP - Stock Picks), the nation's second-largest bookseller, which reported yet another loss yesterday, this one for its second quarter. Reuters started its coverage of Borders' earnings with a sentence about how the loss was less than expected because of cost controls (I'll make a dig on that in a moment). But then we pass directly to a blame-it-on-the-economy quote from the company's CEO, followed not by the contradictory addition of those more-lasting and serious factors that have been challenging the company since before the economy turned but rather by what amounts to confirmation: Barnes & Noble(BKS Quote - Cramer on BKS - Stock Picks) told us the same thing.
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