In compiling Wall Street’s best and longest verifiable short selling record we have become experts on how stock promoters use publications. And there is no more used publication than the Wall Street Journal (“Journal”). If anyone wants to study how to use omissions and hidden motives the Journal would be a fruitful starting point. Case in point: Taser International, Inc.’s real story and yesterday’s Journal story titled, “Is Taser the Next Bubble Stock?”

The last place any seasoned short-selling investor with hard-hitting factual information about a company goes to is the Journal. First, the Journal’s reporters have very little if any control over what is published. Second, the Journal’s powerful and numerous editors always have their own axe to grind and are part of the system that nurtures Wall Street’s promoters. In the end the Journal sells stock.

The Journal refused to run stories about WorldCom, Winstar Communications, Enron, Tyco, the mutual fund scandals and hundreds of other scams and frauds claiming these cases were weak. Journal editors quash stories they view as “negative” everyday. Sooner or later all Journal reporters get the idea: If you want to see your name in the paper do what the editors want. Yesterday without a shred of analysis or a single supporting fact the Journal picked Taser as the best way to highlight the excesses in the market.

There are hundreds of very questionable companies with undeserved market capitalizations based wholly on bold-faced lies. And then there are other pricey stocks that are not innovators and leaders in their field, with very limited competition and selling a high margin proprietary product that uses a high margin proprietary disposable. Yet the Journal chose Taser, which has all these nice things.

To us what is striking about Taser is not investors’ interest but Wall Street’s blindness. Can anyone point to another company that has ever surprised Wall Street so completely? In the quarter ended June 30, 2003 Taser had net sales of $4.2 million, $347,059 in net income and a $37 million market value. This valuation turned out to be a mere 2.6 times Taser’s most recent annualized quarterly net income.

In the next three quarters Taser grew its quarterly net sales 314% and net income 1,023%. Taser’s most recent pretax earnings of $5.8 million are greater than its net sales were before Wall Street got a clue. And as product sales rise so will sales of its high margin disposable.

We are not advocating Taser. But we do have an investor suggestion. Think twice (no three times) before you let a Journal story impact your view – chances are high you will soon realize that the Journal’s view is either worthless or wrong, but never honest.