Generally speaking, it’s not a great idea for a journalist to own stock in a company he or she covers. In fact, it’s entirely unethical.
But there is one exception. Back before the SEC’s Regulation FD, Yahoo Finance, the Internet and instantaneous disclosure of everything to everybody, it was an established practice for a journalist to own one share of stock in a particular company.
That had the advantage of giving the journalist access to the company’s mailed annual reports and financial statements. In addition, being a shareholder of record was the only way to guarantee admission to the company’s annual shareholder meeting — and yes, I have fond memories of being tossed out of the shareholder meeting of Grease Monkey Holdings back in the day.
So, it is in the spirit of the “one share” rule that a few days before Ford Financial Fund closed its $500 million investment in the region’s biggest banking company, I made a very small one in my Fidelity Investments account. With a few simple mouse clicks, I purchased 10 shares of Pacific Capital Bancorp at a price of 90 cents each, or $9 — plus a sales commission of $7.95. Total transaction cost: $16.95.