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Strategies & Market Trends : NetCurrents NTCS -- Ignore unavailable to you. Want to Upgrade?

To: Scrumpy who wrote (4791)	11/21/2000 12:03:51 AM
From: Susan G	Read Replies (2) \| Respond to of 8925

Interesting take on recent analyst downgrades from a newsletter.... Was Morgan Stanley making an honest call or trying to take out the last strong tech sector to try and finally get everything washed out for a move back up? Or, was the brokerage giving some payback to the SEC for its new rule, basically saying we are going to downgrade any stock still standing as we think things are slowing and we are not going to be able to get the cozy, inside information we usually get to make profitable trades ahead of everyone else? Instead, we are going to short those stocks, drop the bombshell, take the money and laugh. Hell, it is legal for them to do it, but woe be to some poor slob who tries to do the same on his own. Not that the latter is right at all, but the former certainly cannot be right either. If the SEC wants to control these shenanigans, it needs to put a lid on the free hand analysts have to issue these reports. We are not for more government intervention, but obviously the current system is far, far from the best. A simple solution, or at least deterrent, would be to require the analysts and their brokerage houses to list all of their positions in the security (short, long, you name it), when it was taken, at what price, and any other information an interested party would need to make a decision as to whether the upgrade or downgrade had any real merit. * Another question we have to ask is how did Morgan come up with its information? Not two weeks ago Cisco upped its own earnings estimates for the coming year and talked of increasing demand. JNPR reported blowout earnings in October and it too stated that demand was huge and it was taking market share. And these two companies, particularly Cisco, are not ones that make such assertions lightly; they have a good track record with their projections. As one of our frustrated subscribers stated today "What gets me is that if Cisco has already issued forward guidance for the next few quarters re strong demand and no profit warnings, what are the facts behind the "brainless" analyst's comments re "the likelihood of a slowdown ... blah blah blah" except that he was JUST TALKING at the expense of the entire networking sector and their faithful investors?" We have seen a lot of analysts that have been simply speculating on the future of sectors, not based on real research, just "anecdotal evidence", i.e., a gut feeling. * We are seeing a combination of themes. The SEC just took away favored nations status in brokerages regarding financial information. There is a lot of pressure to perform or get a leg up on competition, but there is not that cozy pipeline of information anymore. They still want to make a name for themselves, but they have to do it alone. Thus the calls made on 'anecdotal evidence.' The implication is that is all they have to work with now that the SEC has cut off the milk run, and now investors are just going to have to deal with the 'uneven flow' of information (as if one small group getting the information ahead of time under the previous scheme was somehow more even or fair). Finally, way too much emphasis is put on these calls by these folks who have vested interests in certain stocks, and who have no better information than anyone else. Think about it. Without the inside pipeline or illegal information, they have no better resources than any investor. Moreover, we would bet that they are not as good at using these resources as the rest of us who do this for ourselves anyway. The field has been leveled regarding information, but the power of these analysts is still lingering for now. It is our hope that it fades as investors realize their calls are more or less bogus.

To: Scrumpy who wrote (4791)	11/21/2000 4:06:36 AM
From: 2MAR$	Read Replies (2) \| Respond to of 8925

Oh here was the full report from Holly Becker of Lehman Brothers for Ebay: Lehman Brothers analyst Holly Becker triggered Monday's downturn by lowering her rating on eBay's shares from a "buy" to a "neutral" after concluding the San Jose-based company's collectibles business has peaked. Skeptical that eBay will be successful in its effort to list mass merchandise items, Becker said she did not believe the company will be able to sustain the growth needed to deliver on management's promise for $3 billion in annual revenues in 2005. EBay's revenue this year is expected to range between $400 million and $450 million. One of the world's few profitable online businesses, eBay make its money by charging listing fees and commissions on auction sales on its site. Becker's bearish remarks rattled investors accustomed to seeing eBay's revenues double from one quarter to the next as more people sell goods on the site. EBay's shares dropped $8.94 on the Nasdaq Stock Market on Monday to close at $34.50. After the market closed, eBay management reiterated the company's belief that it will reach $3 billion in revenue in 2005. "We did a lot of homework before putting out that number. We still see a very robust business for us," said Rajib Dutta, eBay's vice-president of finance. But investors are worried most of eBay's users are only interested in buying and selling trendy collectible products, such as Beanie babies. Ebay expects collectibles sales to account for just 15 per cent of its projected $3 billion in revenue in 2005. The company said its site already accounts for the most online sales of toys, sports equipment and jewelry. EBay is aggressively branching into other big-ticket items such as automobiles and real estate. ABN Amro analyst Kevin Silverman said he believes eBay's sales projections are realistic. He expects total sales of used consumer goods across the United States to hit $517 billion in 2005. If eBay's site handles about nine per cent of that volume, Silverman estimates eBay's 2005 revenues will be $3.7 billion. Silverman and other analysts characterized the Monday meltdown in eBay's stock as a knee-jerk reaction by investors behaving as irrationally now as they did when they assigned mind-boggling market values to e-commerce stocks. As recently as March, eBay's shares traded at $125, giving the company a market value of about $35 billion. The company's market value is now below $10 billion. * Note stock was later defended by PRUS who maintained a strong "buy" rating on EBAY with target of $125 saying sell-off was unwarranted . Chart: stockcharts.com[H,A]DECAYIMY[DD][PB200!B50!A25][VC60][ILB14!LF!LC20]