Everyone remember that phony "estimates" by brokerages can be used _both_ to help a worthless stock (such as AMZN) beat the numbers game, or it can be used to *HURT* a stock that the brokerage might have a short position in, or even a stock that just happens to be a competitor of a major brokerage holding.
For instance. The keiretsu don't want disney moving in on their turf. Disney has the brands and the deep pockets to make life miserable for them.. So what does the keiretsu and its circle of old-boy brokerage houses do to Infoseek? They raise the estimates to a level they know Infoseek cannot reach. Even if infoseek says "Look, we're going to report 6 cents loss, why dont you make it your f***ing estimate?" the keiretsu just sits back and smiles and says "Sorry, from what I can see I think the estimate should be a profit of 2 cents"
Or, in Amazon's case, if your firm holds a large position in AMZN shares long, you would want to "over-estimate" the profits for Barnes and Noble (obvious) Borders (who cares right now) and Walmart (throw that one in for spites sake)
Then when those companies turn in lower "than expected" profits, you can say Amazon's competitors arent growing as fast as you predicted them to, thus by subtle implication Amazon is a better buy- which helps your firms long position.. And if you can really hammer the other guys stock, it makes it harder for them to further compete by taking away their ability to aquire other companies for stock.
Yes, indeed, I sense in the relatively near future the financial situation behind the 'net stocks in general is going to be looked on as one of the greatest frauds in the history of the equity markets.
Who will be the first to start the domino effect? :) |
