Those Winchell Tips

On his Sunday night broadcasts Columnist Walter Winchell likes to pass out hot tips on stocks to his millions of listeners. Last week some of the heat was on Columnist Winchell himself. In Washington SEC investigators were checking to see if cunning speculators in Florida, where Winchell vacations, had used the columnist to clean up a quick profit at the expense of foolish listeners.

The stock was Pantepec Oil Co., a small company listed on the American Stock Exchange. In his Jan. 9 broadcast Winchell had a "piece of big advance news" that Pantepec had discovered "substantial oil reserves in the El Roble fields in Venezuela," and would hand out a stock dividend.

Actually, as in many cases before, Winchell's news was hardly new. Pantepec had announced its discovery on Nov. 24. The New York Times had already printed a note about it without affecting the market notably. But the week before Winchell's tip, heavy buying, reportedly in Florida, pushed Pantepec's stock volume from 32.000 shares to 174,800, boosted prices from 5 1/2 to 6 3/4. The Monday following Winchell's broadcast Pantepec sold an alltime record 357,500 shares, at 8 7/8, up more than two points. Soon after, Pantepec started dropping, to 7 1/2 at week's end. The paper loss to investors on Winchell's tip was an estimated $500,000, plus another $100,000 in commissions.

There is no doubt that some speculators are cleaning up on Winchell tips. Many traders, gambling that a Winchell-tipped stock will rise on Monday and then drop, sell it short. In Pantepec the short interest jumped from 500 shares on Dec. 15 to 92,327 shares on Jan. 14. Thus, those who sold the stock short after the tip instead of buying it, have already cleaned up more than $100,000 on the drop.

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