Monday Morning: When Maria grinds, the stocks go bump

She was once the “Money Honey.”

But good Lord! The names angry investors are calling CNBC newscaster Maria Bartiromo these days in the chat rooms of Yahoo!

Would you believe “Maria FartAroma”?

Come on, guys, she doesn’t deserve that.

You’d think she alone was responsible for the tech stock bust.

As a former CNBC news junkie who is still recovering from the pains of withdrawal – not to mention a somewhat diminished stock portfolio – I can attest that she was just doing her job.

But exactly what was her job?

She’s been forced to remind us (more and more these days) that she’s just a journalist. If I may correct the record slightly, she’s actually a television journalist. But she can’t help that.

Television bigwigs made the decision long ago, when Maria was still in diapers, to make TV news another form of entertainment – no different, say, than “Tic Tac Dough.”

In fact, if you look at business news shows on CNBC and other cable networks in that light, they suddenly make much more sense.

From those frenetic reports from the floor of the New York Stock Exchange to those chummy interviews with stock analysts who were conflicted six ways to Sunday, I was mesmerized by Maria’s pouty lips, deep, fawnlike eyes and, most of all, her self-assurance. And so were 7 million other viewers who watched the network during the height of the tech stock boom.

CNBC was “Wheel of Fortune” on steroids. “Come on, Maria, show me the money! Show me the money!” And for the most part, she did.

The only problem was, it was no game. And we were playing with real money. Our money.

Now of course the boom has turned bust; some $2 trillion has gone “poof!” and the National Association of Securities Dealers wants to crack down.

The organization has proposed a rule that would require analysts who appear on television to disclose whether they own the stocks they recommend, whether their company owns 5% or more of the stock and whether it receives investment banking fees from the company.

You might as well call it the CNBC rule.

Of course, the networks, for their part, insist they’ve had that policy all along. But I wonder about that.

I reviewed the transcripts of 20 CNBC interviews with analysts, market strategists and others conducted between Jan. 1, 1999, and as recently as last week. Only once did I see Ms. Bartiromo or colleagues Ron Insana or Sue Herera call attention to a potential conflict of interest.

It happened only last week, in an interview with Doug Arthur, Morgan Stanley’s publishing analyst, on Martha Stewart Living Omnimedia Inc. Here it is:

Ms. Bartiromo: “Doug, we should tell – say that you are the lead banker of Martha Stewart’s company. You took the company public.”

Mr. Arthur: “Yeah, took the company public …”

That’s it.

My review is by no means scientific or exhaustive. But if the network had such a policy in place, you’d think those questions would show up more than once, and not just now, when the heat is on.

Incidentally, of the 23 stocks Mr. Arthur covers, he has “outperform” ratings on three, one of which is Martha Stewart.

And as it turns out, getting a little airtime was as sweet as one of Martha’s apple turnovers.

Two days before the interview, Sharon Patrick, Omnimedia Inc.’s president and chief operating officer, filed with the SEC to sell 120,000 shares of the company’s Class A common stock.

The day before the interview, the stock was at $21.75. After the interview, it closed at $23.10. That’s a nice 6% gain on a day when the Dow Jones Industrial Average finished down 68 points, or about 0.6%.

That’s come to be known as the “Bartiromo bump.”

Ms. Patrick, by the way, listed the Tuesday after the interview as the approximate sale date for the shares, which she initially valued at $2.5 million. If she sold as planned, the Bartiromo bump would have added a nice $272,000 sweetener to the deal.

A coincidence? You be the judge. But it would have been nice if Ms. Bartiromo had at least mentioned it.

In any event, now you know why analysts clamor to get on the show. The question is, why are we still watching?

Keith Girard is the editor of InvestmentNews.