Re:"All this rationalization about the earnings/revenue downgrade cracks
me up.
It is never good for a stock (in the short term) to have it's earnings
estimates lowered. It causes fear amongst stock holders, scares new
buyers away, and causes funds to stay away until the dust clears."
Ken, I think you missed the entire point here. If IOMG didn't already
crash to the bottom of the barrel, then what you said above would apply.
In the current situation, the worst thing that could happen is for expectation
to remain, especially high EPS projection.
In the current situation, if you own IOMG, which of the followings would you
prefer?
1. Revenue and EPS estimates at 0.12 and 300MM, then IOMG report 0.12
and 300.
2. Rev/EPS estimates at 0.12 and 300MM, then IOMG report 0.07 and 257MM.
3. Rev/EPS estimates at 0.07 and 257MM, then IOMG reports 0.12 and 300MM.
4. Estimates at 0.07 and 257MM, then IOMG reports 0.07 and 257MM or lower.
See my point? The greatest move up from this point will happen if #3 occurs in Oct.
The worst that can happen is #2. I was not confortable at 0.12 estimates and
would bail if analysts start to raise estimates higher - too much risks.(Probbaly won't
bother you since you probably would bail before reporting time anyway, right?).
Now let's see if they would lower 4Q estimates also.
I think more people will buy IOMG now because the estimate has been
lowered and current price is already discounted for a bad 3Q. The risk has
been significantly lowered with the lower estimates. The chance for positive
surprise is much better now. |
