We’ve already featured some of his distortions in the Daily Distortions series (no. 10-19), but this guy can’t help himself. We called him a liar (we’ll explain why), that hurt his feelings. We don’t want to do that so it will be the ‘misleading’ professor from now on.

Why did we call him a liar?

1. He argues that InterOil is misleading investors, consistently
2. He does that on the most flimpsy of ‘evidence’, often just stating it as a matter of fact, as if it is self-evident
3. When pressed for examples, the examples invariably turn out to be bad, often demonstrating that the misleading comes from him, not InterOil (see the Daily Distortion series no.11-20)
4. We have often ask for clarification of the examples (for instance, why did he call a PR from 2003 misleading when a third party mentioned in that very same PR does not, what extra information does he have to arrive at another conclusion? We asked it ten times, the only thing he answers is just stating that in his view, it was misleading. No arguments, no information, nothing).
5. He is an UCLA professor, he can’t be entirely stupid, yet he does it consistently
6. So these things are no incidents, there is a pattern, which forced us to arrive at the conclusion that he does it on purpose
7. Which is why we called him a liar.

And he reared his head on the board again with some silly stuff (once again implying that they promise and don’t deliver, as the refinery hasn’t just turned a profit, as if they didn’t discover the two best flowing wells in PNG and Australia in less than two years).

We reminded him on a past post, which tried to show that IOC was misleading when arguing that the flow rates from the well would improve with better equipment and after cleaning up the skin

• in the last press release, they mention issues with the skin and the testing equipment. It’s all subtle wordsmithing. [Eric Sussman]

That turned out to be a misleading post by Sussman itself.

1. They increased the pipe diameter and tests increased from the 10MMcf/d range to 63.9MMcf/d, just as InterOil (and Raymond James) predicted
2. They cleaned up the skin and the well increased gas flows another 36.5%. Just as InterOil (and Raymond James) predicted

So these InterOil predictions were born out by the facts, the only “wordsmithing” came from Sussman, and it wasn’t subtle.. After a while, he had some sort of defense:

• Labeling a press release as “misleading” or “wordsmithing” in my view is not “lying” and does not make on a “liar.” It is my opinion, and I stick to my opinion on these matters. [Eric Sussman]

Well:

1. Yes actually, as that label turned out to be 100% wrong, which it did
2. This is far from the only incident like this, he consistently attacks IOC for being misleading but his examples consistently not only fail to show that, but show that the one who is consistently misleading is Eric Sussman.

Of course, it must be frustrating to him to be publicly exposed and not being able to argue anything against it (or any of our other exposé’s about him), and that showed:

• It’s just too, too bad you don’t blog under your real name, so we could really track your performance, have a better sense of your background, that sort of stuff. Until then, I’ll continue to read Jeff Matthew’s blog, David Phillips 10K Detective, and yes, even Andrew Left, for more compelling investment analysis since they are out there for all to see. I mean, it’s hard to take seriously a blog written by a guy whose only knows as “stpioc”. Until then, I will continue to place Shareholders Unite in my Entertainment Folder, along with Rotten Tomatoes, ESPN, and YouTube. But heck, we all need to be entertained! [Eric Sussman]
• How do we even know you are a real person? How can I “attack” a shadow (I love the melodrama, using the word “attack?”)? Besides, when you use words like “corrupt” to describe someone (I really laughed at that one), I think this is a case of the pot calling the kettle black. Unite and attack the corrput shorts!!! [Eric Sussman]
• I just checked and I was wrong. We don’t know a thing about the blogger other than his Yahoo message board name, stpioc! Isn’t that classic? Who would ever think to look at a blog like that to get objective investment perspective when you don’t know who they are and their own Yahoo moniker has the name of a stock they are touting? That should answer your question. It’s just written by a pumper. I only hope he’s getting paid by the companies he follows, esp. IOC, since he’s written far more about that speculative company than any other… [Eric Sussman]

So, out came the ridicule, the personal attacks, the suggestion we’re paid pumpers (not the first time that either). You would think that a university lecturer who was just exposed as a liar might show some humility..

Not this one. Is this how they argue at UCLA? We hope not..

Note also the curious argumentation why he wants our identity: it would enable him to “really track our performance” Huh? It might be us, but we’re not getting this argument. So, if we put a name under something, it’s performance can be tracked better? We fail to see how..

He then laughs us off:

• Stp acts like he is all about the IOC analysis. But between whatever valuable content there might be, he has devoted countless pages to what I would consider personal attacks. I mean, he has called me a liar and corrupt. I hate to say it, but that’s illegal here in the U.S. Because it is has no bearing on anything or any credibility, I have just laughed it off, and am sort of flattered he finds what I have said to be worthy of such focus. But I don’t think any truly objective person here, whether long or short, would mistake stp for some independent analyst to be taken anywhere near face value. [Eric Sussman]

Then, a little later he got upset, and threatens legal action

• You call me a liar because I questioned an escrow from early 2007, reasonably believing that it had been canceled since not a peep had been mentioned about it for 12 whole months, until I bring it up on the Boards here and then miraculously, it is the first question addressed during the last conference call? Hardly a coincidence.
• Anyhow, that’s the basis for you calling me a “liar?” You yourself admitted that you thought the escrow must have gone away based on what I wrote, which is not unreasonable. I still have my doubt about the validity about that escrow, and I don’t care what Phil or anybody else says. That’s not a lie, I hate to tell you. [Eric Sussman]

• You are just wrong, dead wrong, stp. I said the press releases were examples of misleading messages from management. I stand by that assertion, and nothing you have written changes my views. THAT IS NOT A LIE! I reasonably assumed that escrow had been canceled as over 18 months had gone by, and not a word had been said about them for over a year. In fact, with Phil’s recent statement that they are on draft 8 or 9 of the agreements, and they have not said anything over the past year in their SEC filings about this gives me even greater pause. MY BELIEFS ON THIS POINT ARE NOT LIES.
• Endorsing some of another poster’s statements here, whether you like them or agree with them or not, is not lying (by the way, I have also criticized some of the things they do, but you overlook that). Claiming press releases when issued are wordsmithing is not lying. I actually believe that if your posts here and on your website were exposed to a judge and jury, they would conclude that they were defamatory and improper. I am certain a judge would order you to stop doing it. [Eric Sussman]

• You just don’t agree with me. Maybe I even read the things differently than you. Whatever! A difference in opinion, or even a difference in interpretation, does not mean the other is lying. You really need to know the difference, and I don’t think it’s a language thing. [Eric Sussman]

Take the options agreement ( to negotiate a final deal, with the money in escrow) we have shown that:

1. There was no basis on which to claim that the deal fell through
2. Even if it had, there was certainly no basis in claiming there was anything misleading about that. Negotiations sometimes fail to arrive at a conclusion, especially complex deals like this, streching far into the future (possibly 25 years) and involving a largely unknown valued recource.
3. There was no basis for his endorsement of someone else claiming that the money in escrow implied a valuation of InterOil (($13 per share) or even just Elk/Antelope. That view is just plain wrong, as we set out here.

So: if a university professor consistently says that a company, InterOil, is misleading investors on a consistent basis, but consistently fails to show that (again today), one is forced to arrive at a conclusion that the professor is consistently lying. Now that upset his feelings, so we’ll just say it’s not InterOil which is consistently misleading, it’s the professor, and leave it at that.

We think the examples we came up with (we’re sure there is more, we certainly didn’t analyze all his postings) speak for themselves. And if it does come to a court case, we’re sure that our analysis of his posting is an order of magnitude more thorough than his analyzing of InterOil’s PR’s. But you can judge for yourself (Daily Distortions no.11-20)