Chief exec Brian Mukherjee tells Oliver Smith that accusations about the tech company’s past are unfounded
BLINKX, the online video advertising firm that saw its share price plummet in January on the back of a critical blog post, was attacked by an “infamous professor” using the “bully pulpit” of Harvard University for personal gain, its chief executive said yesterday.
“On the one hand you have pharmaceutical research that has to be double blind in order to be published, and on the other hand you have a professor using the bully pulpit of an institution like Harvard to pursue personal opinions,” Brian Mukherjee told City A.M. following Blinkx’s release of a 15-page rebuttal of the blog’s allegations.
Professor Ben Edelman first published his post on 28 January, claiming that Blinkx had links with companies that use “deceptive tactics” to take fees, by making it seem like adverts had attracted more customers than they had. The blog post sent Blinkx’s shares tumbling by as much as 30 per cent.
Mukherjee said that while the blog post had shocked the company – Edelman had not given Blinkx any prior warning – his actions were not a complete surprise.
“He’s a pretty infamous figure in the industry, he’s been around for a long time,” said Mukherjee.
Following the allegations, Mukherjee said Blinkx spent five days conducting a full internal review of the “deceptive tactics” that Edelman had alleged – many of them referring to events that took place 10 years ago, before the current senior management team had joined the company.
“After that we had a pretty good view [that the allegations were unfounded],” said Mukherjee, who then opened up his findings to Kroll, the risk consulting firm, and law firm DLA Piper for a full audit.
“They literally went through the asset acquisition documents [relating to dealings with an adware company, Zango, in 2009], the processes, all of that – so that everything that was mentioned we had backup for.”
Blinkx’s rebuttal to the blog labelled it as “a deliberate attempt to use partial, incorrect and misleading information to arrive at subjective and malformed conclusions”. Blinkx also said it has called in the Financial Conduct Authority to investigate short sellers who may have benefited.
Investor confidence appeared to spike yesterday with shares up by as much as five per cent, but closing slightly down at 112.5p, a far cry from the 170p Blinkx traded at in January.
Aviva, one of Blinkx’s top 10 shareholders, praised the company yesterday. Fund manager Trevor Green said the company deserved credit for “tackling head on the issues raised in various online forums on the sector and Blinkx in particular.”
But one person still unconvinced is Edelman, who yesterday stood by his original blog posting, labelled Blinkx’s response as “unpersuasive” and promising to publish more on Blinkx soon.