Critical blog on Blinkx was based on research paid for by investors

 
Oliver Smith
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ONLINE video search company Blinkx last night said it was “exploring all options” after it was revealed that the critical blog posting, that caused its stock to plummet 40 per cent, was paid for by two US investment firms.

The admission follows the build-up of a number of short positions on the company, raising concerns that Blinkx could have been a victim of market manipulation.

The Financial Conduct Authority last night would not confirm whether it had been asked by Blinkx to investigate concerns of market manipulation.

In the blog published last Tuesday Harvard Business School professor Ben Edelman claimed that Blinkx had links with companies that used “deceptive tactics” to take fees and referral commissions.

Yesterday Edelman updated his posting after Harvard Business School forced him to disclose who had paid for research that the blog post had been based on.

“By agreement with the client, I am not permitted to reveal its name, but I can indicate that the client is two US investment firms… The client tells me that it did not change its position on Blinkx after reading my article,” said Edelman.