Translation: C. Brayton
File under “investor relations,” and remember to renew our subscription to the OESP, the best paper in town.
A report that ran in Sunday’s O Estado de S. Paulo (July 7), bylined to Irany Tereza and Mariana Durão, did readers a considerable favor by showing us that “the bubble at OGX was inflated by 55 communiques reporting oil discoveries.”
A study conducted by the Estadão found that Eike Batista’s oil and gas subsidiary published 105 communications to the market in two and a half years, in large part having to do with fresh discoveries at the same well. The CVM will officially investigate this grand opus and its effects on share prices.”
From October 2009 to May 2012, according to the reporters,
“OGX issued (…) 55 announcements of petroleum discoveries or declarations of commerciality — oil and gas jargon for evidence that an area subject to exploration will become a productive source. With each promising announcement, the market reacted immediately and OGX watched its share price grow by leaps and bounds.”
This case, torn from today’s headlines, illustrates just how many such cases are processed by the official Brazilian “incubator.” (See “Material event releases summon multitudes”). On the same page of the Estadão, Sérgio Torres analyzes “self-praise in the autobiography of Eike Batista, X da Questão — the crux of the question.”
The reporters dig up the following pearl from the book: “OGX has in its DNA something special inherited from me: the will to enchant and surprise.”
In an accompanying article, Sabrina Valle, says that “regulators, BNDES and big private banks saw nothing wrong with the promises made on behalf of X Group companies.”
Something for nothing
This modest sample of what newspapers published before the collapse of X Group shares is not the fault of Eike and his investor relations team. The defendant is the press itself. Also to blame are readers who allowed themselves to be coaxed by such a lovely melody. They did it because they wanted to do it
In the novel It All Adds Up (translated and published in Brazil in 2002), Saul Bellow describes an interview he did with the Yellow Kid, the greatest confidence trickster in Chicago.
It is an amusing conversation. At one point, Bellow asks the kid — born Joseph Weill, he lived for 100 years): have you no remorse for having swindled so many people?
(The topic was a scheme promising spectacular returns for a modest investment; the con man had rented a high-profile store and hired extremely pretty receptionists.)
The Kid replied: “No. They wanted to get something for nothing. I gave them nothing for something”.
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