You're right, false rumors are started long and short, but the crime was they actually got people to sell at the bottom by stating something impossible was possible. Impossible because LU has just halved their debt, has three bilion in cash, just closed a 5 bill deal with VZ and even under the worst market conditions couldn't possibly be forced into bankrucy for what - 2-3 years? And that's the worst-case scenario. The crime therefore was not only stating a lie but people bashing LU so hard beforehand they created an market environment where some suckers would actually believe it? And yes whoever shorted LU then were suckers as well, maybe the biggest ones, and playing with fire.
As for takeover rumors, those are usually false but at least they're possible (usually). I don't know about rumors but LU, YHOO, ELNK, WCOM, FON, LOR, COVD and many others are likely to be swallowed up this year. But would I buy on that speculation? No way. I did once two years ago and it cost me. Never buy a takeover rumor. Better to sell into it if you're lucky enough to own the stock.
Anyway that LU thing just pissed me off. It exploited peoples' paranoia but now exposed might have helped trigger this huge rally-back. That because the Big Lie was finally revealed as exactly that. Though we may have a few lousy quarters we're really not in that bad shape at all, esp at these low prices in stocks, and the net-wireless revolution will definitely continue. Just a big hiccup and re-valuation here. But it's already happened and three comes a time enough is enough. Perhaps that time is finally here. |
