>>>Ms. Meeker declined to comment for this article. But Ray O'Rourke,
a Morgan Stanley Dean Witter spokesman, defended the star analyst,
saying that her picks had been made for the long term<<<
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Declined to comment, seems to be a popular theme looking forward by these so called gurus!
>>>But it became obvious to me a long time ago -- and I wrote this in my columns -- that Mary Meeker isn't a stock picker. She's a skilled talent scout, adviser to her management clients and promoter of companies she likes -- most of whom happen to be Morgan Stanley Dean Witter investment banking clients.
<<<
Friday November 24, 10:23 am Eastern Time
TheStreet.com - Silicon Valley
Meeker's Calls Don't Merit a Lot of Worth
The Morgan Stanley analyst has a lot of skills, but stock picking ain't one of them. Caveat emptor.
By Adam Lashinsky
Silicon Valley Columnist
I vividly recall a conversation with a big-shot stock analyst much earlier this year, when times were still very good in Silicon Valley. The analyst had just left his job at a major tech-oriented investment bank after a grueling few years of trying to identify potential Internet winners while also trying not to give in to the demands from his investment-banker colleagues that he unquestioningly support the firm's underwriting clients. In the end, the analyst bolted, he said, "because the bankers forgot to say 'thanks.' " He was mostly kidding. But only mostly. He got paid handsomely, of course. But he grew weary of the game. A few years ago investors didn't understand the game: They were up against an entrepreneurial/venture capital/investment banking complex that rigged the rules against them. Sure, you could profit from this game, but only if you piggybacked on them for the ride and, importantly, knew when to jump off.
With giving thanks on my mind (it being that time of year after all), I thought about this anecdote again on Tuesday when an angry reader wrote urging me to beat up on Mary Meeker. The longtime Internet-stock bull issued negative comments Tuesday on Yahoo! (Nasdaq: YHOO - news) , helping remove a quick 10%-plus from its stock's value. The reader suggested that Meeker's blithe disregard for the fundamentals on Yahoo! was "criminal" and that she should be taken to task.
Now, Mary Meeker doesn't need me defending her. After all, a puff-piece cover story in Barron's and a long feature in The New Yorker pumped her on the way up. They can come to her rescue now, though they probably won't.
But what's disturbing in this market is the sense of entitlement. Stocks are supposed to go up; the people who hype them promised us they would, after all. Now they're going down, and those hypesters should be ashamed.
Earth to investors: They were hyping all along. Do the words caveat emptor mean anything to anyone? Please don't read this as a statement of not caring about people's losses. I care. I've lost money myself; I'm a shareholder in TheStreet.com (Nasdaq: TSCM - news) . But it became obvious to me a long time ago -- and I wrote this in my columns -- that Mary Meeker isn't a stock picker. She's a skilled talent scout, adviser to her management clients and promoter of companies she likes -- most of whom happen to be Morgan Stanley Dean Witter investment banking clients.
Consider Meeker's pronouncement Tuesday that there's a 30% likelihood that Yahoo! will miss fourth-quarter revenue projections. Thirty percent? There's no science there. No analysis. Never has been. Or Meeker's observation that "90% of Yahoo!'s revenue is driven by Internet advertising spending and that market right now, in several words, is tough and wacky." Tough and wacky? Is that a chapter in Graham and Dodd?
But it has always been thus with Meeker. She called Yahoo! -- not a Morgan Stanley banking client, by the way -- when it was worth a tiny fraction of where it is today. And she cautioned eons ago -- I recall hearing this first at an October 1998 breakfast in Palo Alto, Calif. - that she didn't want to become a poster child for the Internet. She knew there was a good chance it was going to come to a day like this. Your job as an investor was to ride the wave with her. Would she get you out in time? No.
Last thought on Meeker and the way the game is played: As noted, one of Meeker's skills is staying very close to management. As such, pay careful attention to comments she made Tuesday warning that Yahoo! is falling prey to the "Apple syndrome":
"Has [the company] become too insular and can't see the market for the gestalt?" she asks. "And does it need to expand the breadth/experience of its management team and board [given that] the pending merger of AOL and Time Warner has changed Yahoo!s competitive landscape and reacting to the merger can't be ignored?"
Meeker flat-out suggests it's time for a shake-up at the top at Yahoo!. Understand the anatomy of how the thought process works with public comments like these. People close to Yahoo! have been muttering about a need for a change for months. The first mention I saw of this was when New York Post gossip columnist Chris Nolan suggested Timothy Koogle was stepping down as CEO. Didn't happen. Then came Wall Street Journal gossip columnist Kara Swisher's suggestion that Yahoo! had become too insular and needed to find its Bob Pittman (the AOL president). Now comes Mary Meeker, more powerful by far than Nolan or Swisher, musing the same things but in greater detail and more forcefully. The people whispering in the ears of all three are Yahoo! fans who think these are things the board and senior management need to hear. Nolan, Swisher and Meeker are their mouthpieces.
There will be a shakeup at Yahoo! It may help the stock price. But not soon. And forget about applying fundamental analysis to the situation. People like Mary Meeker never knew how high the stock would go. And they have even less clue how far it will fall.
Random musings : Potentially bad sign for Israeli stocks. And for Cisco (Nasdaq: CSCO - news) : I see that Benchmark Capital , the Silicon Valley firm that brought you eBay (Nasdaq: EBAY - news) , Ariba (Nasdaq: ARBA - news) ... and Webvan , PlanetRx and MVP.com , is establishing a $200 million venture fund in Israel. Sign of the top for Israeli stocks? Gee, I hope not, but it's not like the Israeli high-tech scene hasn't already benefited from some tremendous hype. I also note that one of the new partners in Benchmark's fund is Arad Naveh, whom the newsletter Venture Wire refers to as the fo! under and CEO of a company called Class Data . The full skinny is this: Cisco Systems bought Class Data in 1998 for $50 million, and Naveh became Cisco's point man for hunting down new investments in Israel. I met with Naveh in Tel Aviv in July to discuss Cisco's M&A strategy in Israel. Easy come, easy go, I suppose.
biz.yahoo.com
KM |
