Here's the inside story on the price action today: The CEO spoke this morning at a conference and basically the analyst/host involved used it as an opportunity to hype the shares. Actually the CEO was involved as well. There are a number of dynamics involved which I'll try to cover. First, the CEO himself warned more than once that there will be FIVE quarters of no-growth and disruption to the extent he could not even predict the impacts. Now, the CEO has a past track record of hitting numbers more than 90% of the time, HOWEVER keep in mind "hitting" is not going to be enough the case of Symantec where the shares already hyper-extended, and also keep in mind Symantec is nothing like any company he has led thus far, let alone embarked down a path of disruption this large. Did the analysts focus on the lack of growth or risk like they should have? No, of course not. What they did focus in on what an orchestrated commentary where the CEO mentioned there could potential be some further divestiture in the future, but in proper context it means very small, if any. Nothing the size of Altiris. And all anyone has to do is look at the portfolio and combine that with further comments from the conference this morning. Most notably when the CEO clearly indicated they are not focusing on the consumer business any longer but plan to keep and milk it, and likely intend to raise prices to make up for the near-term risk in hitting numbers. But did the analysts focus on that? No, of course not. Lastly, understand the CEO has a personal vested interest in what he says and the impacts to the shares because his compensation is largely tied to price. In fact, at the current level he will already receive 100% of his multi-million dollar, multi-year stock bonus. Lastly, Europe is a very large and very real threat to Symantec's business. Europe is sliding back toward recession and the Euro is weakening. This has cause major problems for Symantec in the past and will do so again given currency conversion and the fact almost one fourth of Symantec's business is exposed to the Euro zone. But did the analysts or CEO touch upon this? No, of course not.
This rally has now entered the realm of a fool's rally, the shares are being gamed from every angle, and the game will end painfully, it always does. I am starting to believe the CEO may be an intentional influence in the game and once the rewards are reaped, shareholders will be left with 4-5 quarters of no-growth and earnings the company will struggle to meet at some juncture. Likely sooner rather than later. When this happens, or when the market stops buoying the shares, look out below.
Congrats to fellow long-suffering longs though, just realize the risks ahead. And anyone choosing to hold at these levels needs to stay well protected. Downside potential is clearly great than upside at this point, both for the shares and the market in general.
Just have to love the consistently wrong conclusions from a poorly informed poster with a strange agenda. Had longs actually listened to long_term last fall they would have been out at 17/18 per share. The good news is everytime long_term bashes the company the stock seems to go up... so please keep bashing!!!
BTW, the complete transcript of the CEO's preso yesterday is online in the event investors want to read facts vs. long_terms fiction.