In recent weeks, we’ve seen Wall Street unmercifully punish wireless and blue-chip high-tech firms because of lower-than-expected quarterly earnings. Maybe punish is the wrong word. How about mutilate. In one fell swoop, unforgiving financial kingpins lop off value-sometimes a third or more-from high tech firms. Maybe, to win Wall Street’s respect, it’s simply better to boast unprofitability and record losses a la dot-com. That worked a while, until Wall Street began dissing dot-coms. Now the Street is turning on high-tech blue chips, which have the misfortune lately of experiencing normal growth as opposed to paranormal growth.
Wall Street giveth and Wall Street taketh away. So it is that Wall Street plays God with wireless carriers and manufacturers and others. Of course they share some blame for contributing to the financial bubble on Wall Street that’s now bursting. You know, those press releases that ooze with optimism while downplaying heavy debt and seemingly endless unprofitability.
These days, Mean Street is in the midst of a wild sell-off. Even tech bargain hunting is falling out of favor. The word is out: Dump those `priced-for-perfection’ tech stocks. Unforgiving. No remorse. In fact, Wall Street is now blaming high tech for its travails. Imagine that.
Verizon Wireless Inc. got so spooked it postponed its initial stock offering last week.
This is a free-market we’re told, capitalism American style. And Wall Street is how the market expresses itself. There are good days and bad days on Wall Street, we’re told. Besides, Wall Street gurus say, stocks are bound to go south with lower earnings, hints of inflation, rising oil prices and Mideast sabre rattling.
True, but there’s more to explain the recent unprecedented Wall Street speculation and volatility.
In his new book, The Fortune Tellers: Inside Wall Street’s Game of Money, Media and Manipulation, Washington Post media columnist Howard Kurtz writes of the cozy relationship between the financial electronic media and Wall Street analysts who are never asked to disclose their interest in stocks they talk up or down during TV appearances.
There’s also the touchy little issue that SEC Chairman Arthur Levitt is trying to straighten out, involving auditors conflicted because of their dual role as number crunchers and consultants to companies traded on the Street.
Perhaps they all deserve each other.
