VRSN competitor "BALT"imore Tech laying off 250 souls which make up 18% of its workforce after sales fell and losses jumped 10 times.
With that in mind, I thought you might enjoy this from 247profits e-dispatch:
Greetings,
Yesterday I told you about how big investment firms are
robbing individual investors with misleading research and
phony buy/sell recommendations. Forbes.com just ran a story
on a man who's running a personal campaign against what he
calls "the Wall Street scam." He thinks he's found a way to
bring some sanity back to the way the big boys do business.
Here are the details...
Manuel Asensio is a short seller. He likes to borrow shares
and sell them on the belief that their price will fall. He
also likes to file lawsuits against companies for
misrepresenting themselves when they issue reports about
past and future revenue growth.
Asensio's latest suit is against VeriSign (VRSN:NASDAQ),
which has a legal monopoly as the official registry for all
World Wide Web addresses ending in ".com." He claims that
Wall Street's forecast of 60% income growth over the next
nine months is absurd, and based on misleading data from
VeriSign. Like I said yesterday, Wall Street analysts are
willing to swallow corporate spin all too often. Asensio is
betting against the stock with a short position, saying
that when the ridiculous revenue projections fail
miserably, the stock--already valued at over 100 times
earnings--will go right down the toilet.
Asensio made a lot of money earlier by pointing out that
Winstar Communications (now bankrupt) wasn't going to be
able to pay its debts. Professional analysts didn't get
around to downgrading the stock to "neutral" until two
weeks before the company went under.
Which brings me to Asensio's main point. He thinks that
short selling, and the kind of research that goes into
deciding on a short position, is the antidote to the empty
hype-machine that Wall Street has become. In fact, he'd
like to see 15% of the assets of pension and mutual funds
devoted to short selling.
The idea is that if fund managers were more inclined to
profit on the downside, it would help protect stocks from
grotesque overvaluation and get analysts back to the job
they're supposed to be doing, instead of the mindless
cheerleading they've been engaging in the last few years.
There is a whole industry devoted to promoting stocks, with
virtually no voice representing the fact that sometimes you
need to be selling.
The result, says Asensio, is a system that is "corrupt" and
"dastardly." |
