Sharesleuth Targets Xethanol Corp

Mark Cuban's has posted its long-awaited first piece, on Xethanol Corp (ticker: XNL) today's chart is to the right:
Xethanol Corp. bills itself as a biotechnology-driven ethanol company that can turn wood chips, corn stalks and paper sludge into cheap alternative fuel.

But a investigation found no evidence that Xethanol (XNL: AMEX) has produced significant quantities of ethanol from those raw materials. Combine that with Xethanol's announcement that it'’s poised to become one of the first companies to commercialize that technology - a sort of Holy Grail in the renewable-energy world -– and you'’ve got the type of inconsistency that Sharesleuth seeks to uncover with its stories.

Read the whole thing here.

For those of you unfamiliar with Sharesleuth, it purports to provide "independent Web-based reporting aimed at exposing securities fraud and corporate chicanery." As I mentioned previously, I'll be looking forward to seeing what effect Sharesleuth's stories have on the featured companies.

A quick glance at Yahoo! Finance indicates that the stock was down almost 12% today, with most of the decline coming shortly after the opening bell. This could be due to people taking Sharesleuth's information seriously, or it could be due to Cuban putting in his short sale this morning (I don't know - I'm just speculating). However, the stock had been steadily dropping for the last few months, so I wouldn't hazard a gues as to which (if either) is the case.

In any event, it'll be fun to watch what happens.

Updated 8/10: It turns out that Cuban had actually shorted the stock some time ago (it looks like back in May). So, unless he found more shares to short (there were few available, it seems), the large drop in price wasn't due to a Cuban trade. It was more likely from other people trading on the information.