Heard from Leslie Flegel, CEO of
Source Information Management
. His company was the focus of an item
here yesterday, and he disagrees with some of the conclusions. (Neither he nor any officials of the company could be reached Friday; he says he never got my messages -- all three of them to his office and his public-relations firm.)
So, let's go over it: The column, in an effort to level the playing field, pointed out that Source's investors might not know that Source has competition from private
Management Science Associates
in the new biz of providing online weekly magazine sales data from retailers to publishers. (Flegel doesn't argue with that.)
MSA, in fact, is working with
Time Distribution Services
Warner Publishing Services
to create a system of its own. Time and Warner, the column said, distribute Time's magazines, "which account for one-third of
single-copy magazine sales." Flegel says Time's magazines don't account for one-third of all single-copy magazine sales. Indeed, Time's magazines don't. But sources close to Time say that
of the magazines distributed by Time and Warner -- including non-Time magazines -- do. (A wording issue -- sorry.)
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The column also suggested that, considering MSA's tie to such a large chunk of the market, Source may be left out in the cold. Flegel says that's simply not true. He says his company has been signing up big retailers as customers, and those retailers are telling their distributors that they
give all of their sales data to Source. Is that anticompetitive? Not acccording to Flegel, who claims the retailers own the data so they can do whatever they want with it. (Or can they? Several sources inside the industry say ownership of the data is a gray area; some say the data really belong to the distributors. The sources say it is likely to be a few months before either MSA or Source can claim victory.)
Flegel also takes issue with the column's description as "rather mundane" regarding the seven magazine-rack manufacturers acquired by Source. He says they're more than magazine-rack manufacturers; he says they manufacture checkout-line racks that hold magazines, candy and other items, and he says he now controls 70% of what he claims is a business that grows at 20% to 25% a year.
The column also cited a 1995
St. Louis Post-Dispatch
story that said Flegel had co-founded
, a company that eventually was sued by shareholders for fraud. He said he never co-founded the company and said he resigned from its board not because the company canceled its directors and officers liability insurance -- as the column said -- but "because I thought they were going to run the business into the ground and I didn't want to be part of it." (However, in a 1995 news release issued by NationsMart, the reason given for Flegel's departure was none other than the insurance cancellation.)
He also said he had distanced himself from
when it was forced into bankruptcy and liquidated in 1989. He says he hadn't been involved in the company since 1985, "and they had me under a covenant not to compete." So, with a group of others, he says he forced Magic into bankruptcy so he could get out from under the covenant.
Finally, Flegel alleged that I was tipped off to his company by short-sellers. Guilty as charged. Short-sellers, as this column's readers know, are some of my best sources.
bucked the bad news of preannouncing that it will miss sales and earnings estimates, with its stock rising 1 1/8 to close at 46 1/4. Chief cheerleader Ashok Kumar of
U.S. Bancorp Piper Jaffray
in a report attributes part of the miss to business being dampened by Y2K. Perhaps, but our spies in the industry (no, not short-sellers) say Ancor's competitors didn't experience similar Y2K, uh, bugs.
rose 3 23/32 to close at 57 23/32. So much for my prediction on the
show that the stock eventually will settle into the 30s. Actually, one day does not make a trend. But my favorite line on the Lucent rebound came from our own
wrote in one of his many columns yesterday, "For what it's worth, I thought Herb Greenberg's warnings on "TheStreet.com" on
Fox News Channel
this weekend were right on the button. That's out the window now, maybe, but Herb's advice was right for its time." Yeah, like about five minutes. That's about all you need to know!
Herb Greenberg writes daily for TheStreet.com. In keeping with TSC's editorial policy, he doesn't own or short individual stocks, though he owns stock in TheStreet.com. He also doesn't invest in hedge funds or other private investment partnerships. He welcomes your feedback at
firstname.lastname@example.org. Greenberg also writes a monthly column for Fortune.
Mark Martinez assisted with the reporting of this column.