Popular investor service TheFlyOnTheWall.com may be forced out of business because a court ruled that it can no longer give out rapid updates of analyst calls.
This is nonsense.
What is The Fly doing that Bloomberg and others aren’t?
To back up, this is a court case that involves three banks (Barclays, Merrill Lynch, and Morgan Stanley) teaming up to stomp out TheFlyOnTheWall.com, a newswire service.
The problem for these banks is that The Fly is posting their analyst’s recommendations minutes (sometimes seconds) after they’re released. This has angered the banks who demand that The Fly stop posting analyst upgrades and downgrades until they’ve been out in the open for a few hours.
If you’d like to know more about the legal side of things, including similar cases in the past, Citizen Media has a fantastic write up of this ordeal.
But here’s the real problem: if TheFlyOnTheWall.com has to stop posting this kind of information, why don’t bigger players like Bloomberg, Dow Jones, and Thomson-Reuters stop as well? Why aren’t the banks after them?
This is a scary precedent being set in the online world that affects everyone from newswire services to blogs to Twitter. After all, if it’s on The Fly, it’s probably on Twitter somewhere, too.
And this court ruling hasn’t made the big firms like Bloomberg flinch whatsoever.
In fact, Bloomberg is currently working on a direct competitor to TheFlyOnTheWall.com that’s called “First Word.” It’s described as a “company RSS feeder” according to Talking Biz News.
Oh, and you know who’s been working on First Word? The Fly’s former CTO who was poached by Bloomberg to work on the project, according to a source familiar with the matter..
Banks need to stop worrying about the inevitable: information WILL leak, like it or not. And if you plug up one hole, another one will spring up somewhere else. If Barclays is going to go all the way with this lawsuit, it should go after every player in the space from Bloomberg to Trade The News. If it doesn’t, the suit should be dropped altogether and The Fly’s service restored to the way it was.
Business Insider Emails & Alerts
Site highlights each day to your inbox.