The Upshot: Embattled Winstar Tries to Spread Some Love to the Troops

Companies are always working to gain investors' confidence, but when they turn the charm on their employees, it starts to smell a bit desperate.

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At least that's what seems to be happening at Winstar (WCII Quote), where the brass sent a five-paragraph hug -- disguised as an internal memo -- to all employees.

They had a pretty good reason to do so. The New York-based phone and data service upstart was a $60 stock about a year ago. This month, after continued questions about its ongoing ability to get financing, the company has seen its shares dragged through the shoe sizes and dropped through the hat sizes to land at about four bucks. All this to the delight of short-sellers -- investors who speculate that a stock's price will fall -- who currently hold about 30% of Winstar's shares.

Winstar didn't reply to calls for comment.

So, presumably, to prevent the hostility out on the Street from causing a mutiny within, Winstar presented its side of the story to its employees. But internal memos, as well-intentioned as they may be, are usually nothing more than company spin turned inward.

And in this post-growth era, in-house memos resemble Backstreet Boys songs in that they generally all sound alike. Typically framed by the challenges the company faces, they attempt to summon the esprit de corps, either in "us against the world" fashion, or through emboldening "keep your chin up" exhortations.

The Winstar memo fits squarely into this category, opening with the obligatory: "Many of you may have read or heard some of the recent negative coverage on Winstar, reports that are driven more by misinformation, fear and rumor than they are by the plain facts."

The note mentions the company's positive performance, cites recent accolades from three sell-side analysts and points to the pressures of the current market environment. And the last paragraph reads: "Together, all of us have made Winstar into a truly unique and industry-leading company. We have much to be proud of." Signed: Bill and Nate. (Bill is CEO and Chairman William Rouhana; Nate is COO and President Nathan Kantor.)

The thing about these "chin up" memos, though, is that they have an inevitable and obvious sequel: a somber and officious note about firings.

But as mom and dad always told us, it's the time between memos that's to be cherished.