SunWorks Inc (SUNWQ)

[SandridgeEnergy]

The problem is that he chooses to deliver good news, or even good sounding press releases that contain no news whatsoever constantly (though this has slowed in recent months, there is a huge backlog of this kind of stuff). But when the news doesn't go their way, they like to pretend that nothing happened or that they suddenly can't comment on something. If Nelson wants to be credible then his communication strategy has to project to institutional investors that he is serious about keeping them informed, not using Marketwired as a way to pump the stock while people close to the company are dumping shares the same day press releases come out (this has happened more than once).

A prime example of this is Fresno, the company put out two press releases that both strongly implied the Fresno contract was to be awarded to them. They were happy to use that bit of news when it benefited them, but when it went the other way they didn't put out a release on Marketwired. They just put Fresno next to the cell on their list of communications priorities. Putting out the initial releases on Fresno set the clear precedent that the company considered news related to that deal as newsworthy enough to put on the wire. By not putting out a release that things had not gone their way, they blatantly signaled to the market the purpose of their communications strategy: not to inform investors but to pump the stock.

That kind of behavior is kryptonite to institutional investors. Profits and growth can be found all over the place. If they can't trust management to keep them fully informed, there is no sense investing extra resources to constantly check up on everything they say. It's much more simple just to move on to somewhere that doesn't engage in that behavior.