London, England and San Francisco, CA – 31 March 2014 – blinkx plc (“blinkx” or the “Company”) provides a detailed response and its perspective on a blog published about blinkx on 28 January 2014, (“the blog”), which contributed to the recent volatility in the Company’s share price.
blinkx strongly refuted the assertions made in the blog at the time it was published. Since then, the Company has completed a thorough investigation of these assertions, including:
- A comprehensive internal review of current procedures and processes across blinkx;
- An audit of the Company’s technology and processes by Kroll, the Global Leader in Risk Management; This audit was led by the Head of the Cyber Investigations and a former FBI Special Agent with extensive industry experience in online investigations, brand protection and internet traffic forensics;
- A legal review of the Company’s practices and commercial obligations by the law firm DLA Piper, LLP, as related to the FTC’s (Federal Trade Commission) enforcement actions. This review was performed by a Partner and former FTC investigator and included a proactive outreach to the FTC’s Division of Advertising Practices and Division of Enforcement, within the Bureau of Consumer Protection;
- An outreach to Harvard University to understand the University’s policies governing the non-academic research activities of faculty and potential conflicts of interest relating to the paid for publication and marketing of such financial research to institutional and retail investors; and,
- Engagement with relevant financial regulatory authorities to investigate the recent trading activity and volatility in the Company’s shares.
Through this publication, the Company expands upon the numerous factual errors in the blog, which follows the four primary sections contained in the blog. The Company has been able to confirm and verify that the blog contains materially misleading information, uses selective data, makes erroneous assumptions about current and past practices, and reflects either a fundamental misunderstanding of the online advertising ecosystem and economics or is a deliberate attempt to use partial, incorrect and misleading information to arrive at subjective and malformed conclusions.
As a publicly traded company in a rapidly changing industry, blinkx management and Board are acutely aware of their fiduciary duty to investors. To that end, blinkx has always welcomed an informed debate about the Company in which ideas are shared openly to help form investment decisions, and the Company would never seek to curtail such an important function played by commentators.
However, given the apparent errors and bias within the blog, the subsequent disclosures that still remain opaque particularly around potential sponsorship and the short position in blinkx stock built prior to the blog, the Company questions the motivations and transparency of both the blogger and the sponsors of his research, who may have made significant financial gains as a result of the adverse impact on blinkx’s share price. Included below is an unedited version of the blog alongside blinkx’s detailed response to each assertion advanced by the blogger.