It seems that the warning was a wrong move on part of the management?
The timing was horrible - HP and Dell just had missed earnings and Intel took a big hit. Warren Buffet disclosed that BH sold all of Intel. Analysts came out of the woodwork and downgraded the whole PC sector and then just to confirm the worst fears Intel warned.
As a result Intel stock kept going lower in opposite direction from the market. Why did Intel warn? If they didn't the stock might have recovered with the market but now no one wants to touch it with a 6 ft poll.
What is the best that can happen now? Intel meets it's lowered guidance? Stock will not recover then - at best will stay flat. On the opposite if Intel misses it's lowered guidance, even by a little bit - it'll be a bloodbath for the exit even from a long term value investors, not just day traders.
I've been scratching my head on decision to warn and can't understand it. Anyone?
Intel did the responsible thing by warning. A lot of companies warned without getting mugged the way that Intel did. Any company that suffers the unrelenting attacks that Wall Street's largest firms and hedge funds mounted on Intel are going to show the effects. A coordinated effort using money, leverage and the media will produce these results.
The whole question is whether this type of wholesale manipulation is going to be allowed. Wall Street firms need to earn their money rather than use sleazy tactics to mug small and medium sized investors. Their efforts are at the best extremely unethical and at the worst illegal.
The coordinated appearance of these attacks at least suggest the possibility of collusion.
Intel investors need to demand an accounting from Wall Street. Why does Wall Street continue to attack one of America's best companies?
A comment from Fudzilla on Wall Street:
"The cocaine nose jobs of Wall Street have been spluttering into their espressos after Texas Instruments announced that it is set to beat their low end estimates. Wall Street had smuggly declared that since TI was operating in a weaker economy it must be suffering from poor orders. However it seems that TI didn't get the memo."
Responsible thing to whom? Shareholders? Wall Street? Analysts? Employees?
Intel's first responsibility is to shareholders to increase their value and in that regards timing of the warning was terrible. Shareholders would've been much better off with no warning.
As far as Media/ Wall Street attacking Intel - that's direct result of such Horrible PR decisions year after year on part of Intel management.
As a fellow foolish commentator points out, the announcement is classic Intel. The company has a long history of waiting until a few weeks before its earnings announcement – the next one is scheduled for October 16 – and then lowering guidance. When actual earnings results are then reported in line with the original expectations, the company can declare the figures “an earnings beat” and watch shares rise by much more than the lowered guidance cost them. This is a classic game of Wall Street expectation management, and one at which Intel excels
" the company can declare the figures “an earnings beat” and watch shares rise by much more than the lowered guidance cost them."
If the BTE earnings always cause the shares to jump by more than the lowered guidance takes them down, one might reasonably expect the stock to have advanced over the last ten years, no? And yet, the shares have NOT advanced over the last decade. In fact, these shares were north of $70 a little over ten years ago. Got any more of that "foolish" analysis to share with us?
Do you believe that meeting lowered guidance will result in shares rise? I don't have such a high expectations. The shares are down over $2.50 since warning. They could've been up by buck or two with the raising market so we could've been up $4 compared to where we are now.
How is this "managing expectations" working out for Intel? Do you think it will rise by $4 in case of meeting reduced guidance? - In my opinion it has a bigger chance of going down after earnings then up.