Intel Corporation (INTC) Message Board

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Technology Stocks : Intel Corporation (INTC)

INTC 50.59

+4.9%

Feb 6 9:30 AM EST

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To: damniseedemons who wrote (3863)	10/11/1996 9:33:00 AM
From: Larry Loeb	of 186894

Sal, Preannouncements are a GOOD thing. We price stocks based on our understanding of the business prospects of the underlying business and the risks associated with those prospects. When management preannounces bad news, this allows investors to better trust management. If we trust management, the risk we assign to a stock is less and, therefore, the required return is lower (hence the stock is valued higher than otherwise). If management constantly waits until the quarter is complete, then they will surprise the market. If the market can't depend on its understanding of the underlying business it assigns a higher risk (higher required return - lower stock price). As you said, the stock will be effected whenever the announcement is made. Unless you are an insider, you really have no reason to be upset that the news is pre-announced (and if you are an insider, the SEC might get upset if you tried to trade on un-announced info). JMHO Larry

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