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Technology Stocks : Intel Corporation (INTC)
INTC 37.22-0.3%10:59 AM EST
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To: AK2004 who wrote (183510)2/22/2006 11:09:59 AM
From: Sarmad Y. Hermiz  Read Replies (1) of 186894
 
I'm not sure, but I think ThinkEquity was the last broker to downgrade stx before it doubled.

There is absolutely no way that either of thinkequity or RBC (last Friday) can have any concept whatsoever about what inventories are at OEM's - or at distributors in China, India and Europe.

Besides that, Dell's model is that they do not order a component until a customer has paid for the PC that it goes in. Besides, both Dell and HP reported lower inventories last week (compared to October).

I think it is obvious that both RBC and thinkequity are working from the same script. Which is to make a negative statement that cannot be verified. And it is really just a signal to hedge funds to make a concerted effort to sell, so they draw in retail sellers.

If what I just said seems far fetched, then one needs to look at what happened to seagate when it dropped from 21.50 to under 14 while the company was reporting 3 consecutive all time record earnings. Basically there was a downgrade every couple weeks for five months. Brokers who had downgraded seagate, later were seen to have added to their positions by millions of shares (according to the inst holding report).

edit. In the case of seagate, while it was earning over $1B per year, and the P/E was under 7, the justifications for downgrading it was : "valuations are meaningless at inflection points." And the moron fund managers bought that crap and were selling millions of shares every day for months. Same as with Intel now.
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