Window dressing my ass. That $31.00 low was a direct result of the F.D.A. scare that took a dollar of the stock price for about half an hour.The rest of the drop in the last ten days can be attributed to G.E.s drop. You were wrong all the way down, don't be wrong all the way back up. I do enjoy reading your posts. You are far more informative than most of the posting on this board. Keep the faith...
If you don't accept the $31 low for window-dressing, you would still have to accept the $32 that was seen the day before with no adverse news from the conference call. I completely reject the FDA letter as a reason for the decline - that's silly - those letters are rather routine occurrences. The CIT debt and the exposure to Argentina are different stories, however.
I also have to minimize the effect of GE's problems. The news was pretty specific to GE - they didn't have backup lines of credit sufficient to cover commercial paper if they were faced with temporarily being locked out of that market as Tyco was. GE was also pilloried for announcing a $50 billion shelf offering of debt right after they had sold a regular $11 billion debt offering. Those events had nothing at all to do with Tyco. Also, I didn't see GE dropping precipitously when Tyco had its free-fall.
And even if Tyco dropped TEMPORARILY in the wake of the GE news, why was there no meaningful recovery in the final days of the quarter? To say that window-dressing didn't play a big part here is to dig your head in the sand.
I'm not very thrilled about your comment that I was "wrong all the way down." Other than absolute clairvoyance, there was no way to get that right AND COME UP WITH A RATIONAL REASON!
If when the stock was at $37 anyone asked for a forecast, I would have said as Phua Young of Merrill Lynch said at the time that it looked like all of the shoes had dropped and that Tyco should start to slowly recover.
Am I really supposed to know that the Wall Street Journal will have a sensationalist article about the tiny acquisitions where Tyco didn't have public PR's? Does anyone really expect me - or anyone else - to anticipate a 15-point two-day drop on such a "nothing" story and that the stock decline will actually cause the bond rating agencies to lower the ratings by three levels?
Prior to that happening, did you expect me to envision that Mark Schwartz of K-Mart would resign and that somehow it would be turned around to where traders thought it was Mark Swartz of Tyco and that the stock would buckle five points on such rumors?
Did you expect me to envision rumors about a Honeywell acquisition - and that another five points would be lost?
I don't mind admitting when I'm wrong - but fair is fair - placing blame for not predicting those kinds of flukish stuff is way beyond the pale.
On the other hand, the window-dressing was rather easy to predict. After declining by 40%, at least SOME funds would understandably not want to include the stock in the porfolio to have to show to fund-holders at quarter-end. We had a very recent history of just that kind of window-dressing that occurred in the March quarter of 2001 - why would anyone expect this year's experience to be radically different - given the fact that the decline preceding the window-dressing was even steeper this year?
I own some at 48 but averaged down at 33, then bought some more at 32, but would have expected a recovery above where we are languishing now, expecially since it seems the major reasons (the rumors) for the fall are just that - rumors. Do you think there'll be a breakout soon, or is there real risk that the dissolution won't work for the valuation?