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Strategies & Market Trends : Ask Vendit Off-Topic Questions
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To: Walkingshadow who wrote (5011)2/16/2005 10:32:41 PM
From: IHateSourCream  Read Replies (1) of 8752
 
Hi Terry,

Thanks for your reply.

>>But it still strikes me that the market was not very forgiving of rather minor sins.

NTAP closed down about 7.6% as you point out:

139.142.147.218.

But ADBL got drawn and quartered and finished down 35% on the day:

139.142.147.218.

That's rather excessive in both cases I'd say.<<

Full disclosure: I own NTAP. Needless to say, I'm kicking myself for not selling prior to earnings. I could have sold for just under $35. (Ouch!)

I agree that NTAP's sins were, indeed, rather minor. In my opinion, the market reaction was unduly severe. I would not, however, place Audible in that same "minor sin" category. I think that their primary infraction was considerably more severe. I admittedly don't follow this company regularly, but from what I understand -- ADBL revealed that their acquisition costs/customer were $3 greater than expected -- close to a 7% higher cost/customer. That's a pretty big deal. And it clearly came as a surprise to the market. I personally think a harsh reaction (or at least more harsh than NTAP) was somewhat warranted (although I would agree that a 35% haircut was absolutely extreme). So with no intention of being argumentative -- I just don't think the two examples fall into the same category. JMHO! :-)

As this is a TA board, I suspect much of this discussion is borderline off topic. My apologies! :-)

Best regards,

IHSC
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