Greg: Thanks for your posting. All the rumours began with reference to that analysts meeting. At first we were told that House had made the statement. Then the MM who was supposed to have been the source said he never said that. Then other analysts were reported to have said that there was no statement there was body-language. Then the BAY PR said that the reports were "basically innacurate" then the BAY VP said the reports were just rumours. Now,in your posting, an analyst who was present at the original meeting said that there was no statement nor body language.
What we had before the infamous analysts meeting was about two weeks of high volume on the basis of speculation that because BAY had performed badly last quarter, there was renewed doubt about its ability to hack it alone and that it needed to be taken-over, that the collapse in the share price made it a relatively cheap buy. The volume brought in a lot of momentum players and retail buyers and let out a lot of institutions. Just when that play was subsiding and volume got low, the report of the analyst meeting appeared in the press and hey presto a big jump in the share price and volume to allow larger exits by those institutions who had not gotten out, yet.
It is now in the interest of all those who have purchased during this exercise to keep the rumours going. The fundamentals are still very questionable. There has been no positive news this quarter. Realistically this would suggest that things are not going too well. But optimists will interpret this as the company being uncharacteristically modest given the innacuracies of its last quarters projections.
I would be happier if it was moving, on rumours or otherwise, in the 22-50/25.50 range, because I think this would provide a trading range with less downside risk. It may be that 25.50/28.50 will be a good trading range, but I do not think this offers upward reward for six months, at the earliest, and it offers substantial downside risk if we were to get an earnings warning in the next 2-4 weeks, or slew of major analysts downgrades.
Victor |
