Maybe it’s just me, but this BusinessWeek article defines everything I’ve ever said about how analysts are just out to swing the markets for whatever silly reason.
My real annoyance? In six months, an analyst went from an eight billion dollar figure to a five hundred million price tag for the handset division. While this analyst claims that it’s due to market share sliding and stock price drops, I actually have another idea behind it: they [or he] don’t know anything about it.
I find it absolutely fascinating that analysts can come up with outrageous numbers and prices and the stock market just listens and changes the stock price without any solid facts. It also makes me go back and review some thoughts I’ve had on analysts in the past.
Do I have thoughts on why Motorola is trying to sell or not sell the handset division and why the stock price has dropped in the recent times? Sure. Every employee does and we all have some insight. But that’s between the company, the management team, and its employees. The point being that the analysts make their judgments seemingly out of the blue and with outrageous extremes (note the $500 million to $8 billion range) and shareholders just sit silently and watch? It’s a tragedy.
It just goes to show that before you open your mouth as an analyst, you better have some pretty solid numbers to back up your statements. While in no way, shape, or form do I personally feel that Motorola was never worth $8 billion for just the handset division, but it’s also a bit higher than just $500 million. Like my opinion is worth anything to the shareholders though. They’d rather listen to some guy that probably wouldn’t know the difference between CDMA and GSM.
Disclaimer: While the author is an employee of Motorola, these opinions are solely the opinions of the author and do not reflect the opinions of the corporation.