Thread - Put on your thinking caps if you choose.
For those of you that have read my posts you will know that I had suspected that there would be a pre-earnings run-up followed by a sell-off after earnings release. Although it can be argued that a slight run-up has occured I hardly would describe it as a major run-up which would more likely result in a sell-off. Lets assume for the moment that (i) cpq doesn't change next monday and tuesday from its current level of about 27 3/4, (ii) what the market as a whole does next monday and tuesday will be ignored for our purposes and will not impact cpq stock price, and (iii) when earnings are released by cpq tuesday after the close earnings are .16 or .17 with .03 from investment income (like last quarer) and revenues are within expectations.
O.K. here we go. (A)What will cpq stock price do if, given the above facts, MC's conference call is positive with great anticipation by MC for the second half of 2000?
Will it (i) go up, or (ii) go down or (iii) remain unchanged?
(B) What if MC's conference call is viewed as being middle of the road, somewhat positive but peppered with caveats about upcoming competition? Will it (i) go up, or (ii) go down or (iii) remain unchanged.
I think it is safe to assume if earnings fall short (not likely) by even a penny the stock will head south. If revenues are below expectations the stock will head south. If conference call is negative, or perceived as being less than rah-rah, the stock will head south. Question, number three.
(C) Should we sell monday or tuesday, even if stock is at best only 28, because there is a good probability that given sell-offs in other stocks cpq will head south and can be picked up cheaper later next week? Remember, even stocks with good earnings reports have been selling off (of course, most of them have had larger pre-earnings run-ups than cpq).
Look forward to any of your views on what will happen to cpq stock price given the above assumptions.
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