Since 2004, Seeking Alpha has been an incredible resource for the individual investor to not only receive information regarding the markets and individual stocks, but to also pen their own articles for the benefit of others. This freedom allows unheard voices to get an audience and that is a very good thing.
But it is also a very dangerous thing. Seeking Alpha articles show up in company news feeds along side legitimate news sources, and there is no asterisk telling potential readers that the articles written on Seeking Alpha are not written by financial journalists, financial professionals, or even educated individuals.
It allows articles to be published and distributed to mainstream financial websites that should be relegated to blog posts, forums or comment sections.
Take for example this recent article that was sent to nearly 40,000 people and read by many more. Mind you, the author of this article was paid by Seeking Alpha real money: seekingalpha.com/article/1921721-why-you...-organovo
I highlight this article because many individual investors are interested in finding out about the 3D Printing space and when you look up 3D Systems (NYSE:DDD) or Organovo (NYSEMKT:ONVO) on Google Finance you see this article as company news for the day (Dec 30, 2013).
So is this news? No! It is pure drivel! It is the unsubstantiated opinion of one individual, who is not a market professional, researcher or academic. There is no data and no analysis. But to many this appears as real news and real investment decisions may be made. Scrolling down to the comment section of that article we see most users find the article to be worthless- but the damage has already been done.
Another recent 'article' posted by a user with all of 2 articles (including this one) showed up in the company news feed for Twitter (NYSE:TWTR) and Facebook (NASDAQ:FB) which has been a hot topic lately, and is precisely why I highlight it. Should this article really be used to make investment decisions? seekingalpha.com/article/1920961-twitter...-ok
More dangerous still is that this outlet can be used nefariously to run pump and dump schemes or to otherwise spread misinformation. There have been examples of contributors coming under SEC scrutiny (mainly in penny stock schemes), however for the most part these articles generally fly under the radar and are never investigated- even if wrong doing has occurred.
So what is one to do when they see an article from Seeking Alpha in the news feed? Don't believe everything you read there as fact, or simply ignore it. When was the last time you read a truly compelling, independent analysis on Seeking Alpha? When was the last time real material news broke first on that site? How many times did it produce actionable and profitable trading decisions for you? I would love to hear those true stories in the comments.
Disclosure: I am long DDD. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.