Who is Bill Wexler?
Asensio's work is widely promoted on Internet chat boards. One of his
longtime cheerleaders is Bill Wexler,
who also gives short-selling advice of his own.
Both Wexler and Asensio present themselves as dedicated fraud-fighters. Both love to
exaggerate, use inflammatory language, and make dire predictions. Both
practice guilt by association. It's little wonder that some believe Wexler
is Asensio.
Actually, the two differ more than enough to rule out the notion.
Which does not rule out the possibility
that they are business associates who have worked together for years.
Bill Wexler Basics
Wexler has hosted two discussion boards at Silicon Investor: Bill Wexler's Profits of DOOM, and its successor, Bill Wexler's Dog Pound. Both have served as billboards for his stock picks, which he has also publicized on Yahoo message boards.
Like a traditional analyst, Wexler would "initiate coverage" on a stock. But the similarity ended there. His short recommendations were more akin to Asensio's "fraud alerts." Initial commentaries were followed by a steady stream of further accusations about his targets--and occasionally, even plans to contact regulatory authorities. Anyone who disagreed with him was promptly denounced as a "shill."
One thing Wexler did not do was reveal his qualifications. But through his posts, he cultivated an image--that of a fabulously wealthy independent investor, living in the Bay Area and writing under his real name. One who could be counted on to answer any criticism with a reminder of how rich, how smart, and how right he was.
Until late in May, 2002. When without notice, the normally combative Wexler
suddenly vanished from his site.
Where Did Wexler Go?
Why Wexler abruptly stopped posting at his Dog Pound is unknown. But by the summer of 2002, his self-portrait as an independent investor had run into some resistance. One reader asked if Wexler was "part of Elgindy's outfit," a reference to the short-seller arrested for an alleged racketeering and extortion scheme. Wexler broke his silence to say he was simply taking some time off.
Another observer pointed to a recent message that named nine short picks. Wexler was asked to explain the astonishing coincidence of all nine turning up in the holdings of a hedge fund located in the city where he lives. And not just any hedge fund, but Asensio's longtime client, West Highland Capital.
Wexler never answered the question.
Coincidence? Or Smoking Gun?
The
nine stocks were just the beginning. Wexler actually commented on 41 stocks
held by West Highland between 1998 and 2002. Often
(though not always) its position was fairly small for an institutional investor. Such a holding
is frequently a marker for a far larger short position.
The 41 stocks are shown in the chart, which includes both long and short picks.
Obviously, many are small, little-known firms.
Is it mere coincidence that Wexler knew enough about every one to offer
an opinion? And that seven of the 30-odd short picks were targeted by not
just by Wexler, but by Asensio as well?
|
3Com |
Earthshell |
Med-Design |
|
Able Telecom |
Egghead Software |
Research Frontiers |
|
Actrade |
Gardenburger |
Smart Serve Online |
|
Altair |
GummTech/Matrixx |
Turbochef |
|
Aremissoft |
Hemispherx Biopharma |
Valence Technologies |
|
At Home |
Hollis-Eden Pharma. |
Viropharma |
|
Avanir Pharma |
Identix |
Visionics |
|
Avant |
IFX Corporation |
Waverider |
|
Biotime |
Intel |
Xybernaut |
|
Britesmile |
Keravision |
Westell Technologies |
|
Chromatics Color Sci. |
Lernout & Hauspie |
Zi Corporation |
|
Covad Communications |
Macrochem |
Zixit |
|
Data Race |
Mannatech |
Zonagen |
|
Dell |
Mechanical Technologies |
|
Just as striking are Wexler's messages that name multiple stocks. With thousands of stocks trading on U.S. exchanges, someone who picks three to 10 has very little chance of having even one match with a small hedge fund. And infinitely less chance of matching the fund three times out of three, or four times out of six, or seven times out of nine. Yet, Wexler repeatedly beat the extraordinary odds and did precisely that.
People Are Talking
The finding of so many matches between Wexler's picks and West Highland's
portfolio has fueled talk on Internet message boards that Wexler is a
pseudonym for someone at the fund. The odds-on favorite for "Most
Likely to Be Wexler" is Mike Wilkins,
manager of West Highland's short portfolio.* Former SEC accountant Robert
Lowry describes him as a "personal
acquaintance" of Asensio, who has acknowledged
working with Wilkins on reports about one target.
Wexler is aware of the talk that he is actually Mike Wilkins. Evidence that he has either admitted or denied the rumors appears elusive.
The Bottom Line
It looks fishy, to be sure. But determining who Bill Wexler is with certainty will probably require filing a subpoena for records from Silicon Investor.
Until someone does so successfully, investors will have to reach their own
opinion about Wexler. Was he truly offering independent advice? Or
presenting himself as a crusader against deception while promoting the
fortunes of an undisclosed institutional investor?
_______________________________________________________________________________________________________________
Update
March 2006
The Clients page of the website was updated in January to acknowledge the
downsizing of
West Highland Capital. Only the owner,
Lang
Gerhard, and
an assistant currently work there.
Mike Wilkins
is now associated with
Kingsford Capital Management.
Please see the
Clients page for further information.
_______________________________________________________________________________________________________________
Page Created 1/10/03 ●
Updated 3/2/06