Copied from food fight. Have no personal knowledge here. Typical Barrons effort to print bad news though.
From Barron's, 3-4-02, p 17:
"Investors spooked by unpleasant surprises in companies SEC filings will
want to sell first & ask questions later, he (Chris Wolfe, equity strategist at
JP Morgan Private Bank) said. Firms with a growth by acquisition story such
as Cendant, Cisco or Tyco International or companies that used cash to
create venture arms, such as Intel or Adobe, could come under scrutiny."
In addition to *accounting problems*, Intel has an *Asian Contagion
problem*. As you know, Oracle warned Friday, March 1, after the close &
its stock dropped 12%. Oracle said they would miss previous earnings
estimates this quarter due to the powerful business downturn in Asia.
Oracle only has 13% of its revenues coming from Asia as per their last
earnings report at
www.oracle.com/corporate/investor_relations/Q202AnalystSpdshts.pdf
when you do the proper calculations using their Geographic Revenue
section. *Intel*, however, has nearly *four times* as much exposure to
*Asian contagion* as does Oracle since Intel gets 42% of their revenues
from Asia as per their last earnings report at
www.intc.com/pressroom/archive/releases/20020115corp.htm
The Oracle warning creates an extremely disappointing outlook for tech
stocks going forward. To wit:
This was supposed to be a lay-up. The compares were supposed to be
getting easier ... It's kind of grim," said Mark Verbeck, a principal in the San
Francisco office of ThinkEquity Partners, an investment banking &
institutional research firm.
Also:
Oracle's warning probably will dash hopes for a revival in the depressed
high-tech sector. "This casts a pall over everything," said industry analyst
George Gilbert of Credit Suisse First Boston.
As well as *accounting problems* noted by Barron's above & as well as
having nearly four times as much *Asian Contagion* as Oracle due to the
fact that 42% of Intel's global revenues come directly from Asia, Intel also
has WARNING RUMOR problems. To wit:
4:21 ET Intel rumor (INTC) 33.95 +0.57: -- Update -- We are hearing from
multiple sources that a rumor is flying around the Street that INTC's qtr is
tracking below forecast due to pricing pressure on the P4. We have no
confirmation of this rumor.
Intel is scheduled to give its mid-quarter update *this* Thursday, March 7,
after the close. If Intel warns, like Oracle did due to Asian Contagion (recall,
Intel has nearly 4 times as much exposure to Asian Contagion as Oracle),
then one can expect Intel's
share price to experience a substantial & immediate "evaporation" on the
evening of this Thursday, March 7th, just as Oracle shares experienced
Friday evening after Oracle issued its warning.
Ironically, & also after a huge rally, exactly one year ago on March 1, 2001,
Oracle warned & helped propel the Nasdaq down 500 points in barely 30
days. Oracle's stock dropped as well:
1-Mar-01 21.38
2-Mar-01 16.88
5-Mar-01 17.00
6-Mar-01 17.63
7-Mar-01 18.63
8-Mar-01 17.50
9-Mar-01 16.38
12-Mar-01 15.19
13-Mar-01 16.94
14-Mar-01 16.06
15-Mar-01 14.69
16-Mar-01 14.06
19-Mar-01 15.44
20-Mar-01 14.38
21-Mar-01 14.75
22-Mar-01 15.50
23-Mar-01 15.88
26-Mar-01 15.69
27-Mar-01 16.65
28-Mar-01 15.10
29-Mar-01 14.52
30-Mar-01 14.98
2-Apr-01 15.32
3-Apr-01 13.25
4-Apr-01 13.66
5-Apr-01 14.74
6-Apr-01 13.86
On March 1, 2002, Oracle closed at $15.99 so this price plummet is likely to
carry Oracle stock into the single digits.
Intel, should it also warn this Thursday & prove the rumors true, given its
accounting problems noted by Barron's plus its Asian Contagion, very well
may experience a price reduction far greater than what Oracle is likely to
experience this week, due to the fact that Intel has nearly 4 times the Asian
Contagion of Oracle. c3 |
