WESTCHESTER COUNTY, N.Y. (TheStreet) -- When it comes to the reporting of merger rumors, it is too easy for a shaky premise to take shape in a headline. You need to look no further than an article this week in The New York Post (NWS) about Clorox (CLX). Other media outlets picked up and ran with the story and plenty on the Internet were braying about the possibility.
But there was little there to meet the eye. A quick look at the article holds a cautionary lesson.
First, we are told in the lead: "Clorox has caught the eye of at least one potential buyer, The Post has learned." The passive voice should raise a brow. Linguistically, it's a distancing mechanism. If there were several sources close to the negotiations actively asserting that Clorox might be gobbled up by a Japanese consumer product company, we'd hear it in an active voice. The Post's one source? Unnamed. Worse, we don't even get a sense of how--if at all--the source is involved in the proceedings. To believe such an article, you need a clue strewn about.
Later, we hear that Kao, the Japanese firm, "is looking at Clorox." Weak. Within industries, everyone "looks" at everyone. Moreover, in this case Carl Icahn put Clorox in play with a bid.It's a pretty safe guess that everyone from Kimberly- Clark (KMB) to Colgate Palmolive (CL) to Procter & Gamble (PG) is "looking at Clorox." At what level, and to what degree of seriousness, is another matter altogether.
Select the service that is right for you!COMPARE ALL SERVICES
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
- Weekly roundups
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Upgrade/downgrade alerts
- Diversified model portfolio of dividend stocks
- Alerts when market news affect the portfolio
- Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
- Real Money + Doug Kass Plus 15 more Wall Street Pros
- Intraday commentary & news
- Ultra-actionable trading ideas
- 100+ monthly options trading ideas
- Actionable options commentary & news
- Real-time trading community
- Options TV