Merrill Lynch Tired of Being “Napsterized”

The Sudarshan Chakra Blog has good analysis of Merrill Lynch’s new walled garden. Reuters reports that Merrill Lynch is tired of having its analyst reports borrowed by online sources and is taking aggressive steps to protect its research.

According to Merrill Lynch’s global research chief, Candace Browning, research opinions provided to Merrill Lynch clients often appear verbatim in online news outlets within 60 seconds. Browning writes in a letter to clients, “…Much like the music and film industries before us, Merrill Lynch Research is in the throes of being Napsterized…” (Obituaries for Sellside Research are Premature).

Like the Recording Industry, Merrill Lynch has already made good on its promise to protect its research, successfully sueing last year for plagiarizing research.

What This Means For Investors

The Sudarshan Chakra Blog sums it up well…

Sell side analysts are currently barred from having privileged access to executives and information. So there is no information that is available to Merrill analysts that is not available to other analysts and the general public. So the only “value added” part of a Merrill report is pretty much the analysts’ opinion and interpretation of data.

It’s a valid point: with so many great online analysts freely available, from KirkReport to Trader Mike, who needs paid Merrill Lynch research reports?

The Future of Free Research

Zach and I built ValueWiki on the assumption that the internet will give paid research a run for its money. Like Wikipedia versus Brittainica, I believe 10 amateur volunteers working in synergy are smarter and more productive than a single paid expert. Examples:

*The ValueWiki SSRX page was written the day the company IPO’d. ValueWiki had SSRX information up weeks before any other financial site.

*Extensive ValueWiki articles like AAPL and RIMM rival the quality of content of Standard and Poors or Value Line (in my opinion).

*ValueWiki got the scoop on fraudulent companies IDWD, SLJB, and CSHD. These companies are too small to receive coverage from paid analysts, so they can easily prey upon uninformed investors.

*Anyone currently Googling for American Wagering (BETM) will find ValueWiki’s new BETM page the most comprehensive free BETM research on the internet.

Only time will tell if ValueWiki truly becomes the Wikipedia of investing. But I believe news like Merrill Lynch’s signal the death knell of paid sell-side research, and the emergence of freely available and high quality internet research.

Shameless Plug

If you believe investors should have completely free access to great research, login to ValueWiki. What have you got to lose, it’s free! Share your research and expertise with the world.


2 Responses to Merrill Lynch Tired of Being “Napsterized”

  1. Health says:

    Thanks for sharing!!!

  2. […] battle between the Street — including Merrill “stop napsterizing our research” Lynch, BarCap, Morgan Stanley, and boutique firm Sidoti — and the hyperactive website […]

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