Hi pezz,
But the top experts in the field did expect LU to exceed general economic growth. The Mkt had little to do with LU's decline to a penny stock. The company is near bankrupt. That's my point the expectations of those who study companies for a living were wrong.
While I do understand the point that you are trying to make, LU is an imperfect example.
LU is failing/has failed for many reasons, and the myriad reasons were not entirely visible to analysts or investors.
To start with, LU was not 100% forthcoming regarding its accounting practices, in particular its accounts receivables. Had investors known the details within the contracts, the devil would have been recognized as lurking within the details, and the stock price would never have risen to the levels it attained before the collapse of confidence in the company. Analysts most certainly would have seen the red flags, and at the minimum, raised some concerns. But neither investors nor analysts could debate the details that were hidden from public scrutiny until such a time as the details could no longer be masked by other numbers found in corporate reports.
The telecommunications industry itself simply had too much capital financing, whether in the form of venture capital or simply the rising daily price of any given telecom's stock. The weak and inefficient companies were allowed, no encouraged, to survive by the huge inflow of capital, to the point where even the viable companies had to slash prices for their products, and no one in the industry could realize profits, or in some instances even survive as an ongoing concern. In essence, the weaklings were subsidized to the point where no one in the industry had any pricing power over the end products.
Lastly, the expectations for the industry were (and still are) well above what might reasonably be achieved within our lifetimes. Telecom infrastructure is not evenly distributed around the globe. Rather, there is a glut of available bandwidth in the wealthier countries (such as the USA, most of Europe, Japan, etcetera) while other parts of the world (such as most of Africa, major parts of Asia and South America) make do with a disproportionate share of the resources.
Mostly LU is failing/has failed because of a total lack of trust in the company, and a near total lack of faith in the industry. My prediction is that it will be many, many years before the small investor returns to telecom for investment purposes. The current leadership must be purged, replaced by more trustworthy leadership which must prove itself before the little guy will return en masse to the sector for investing purposes.
Just my point of view though...
KJC
PS - Sorry about your vehicle, but at least the loose nut behind the wheel was spared... <g> |
