Management does not need to waste their time with Moody's. MOODY'S IS PURE GARBAGE.
Ratings Agency Reports Called Worthless
Monday, March 16, 2009 3:49 PM
By: Michael Kling Article Font Size
Standard & Poor’s and Moody’s are worthless and should be ignored, argue Jerome S. Fons, former managing director at Moody’s, and Frank Partnoy, a law professor at the University of San Diego.
Investors and regulators should drop rating-related language from contracts. Instead, they should return to good old-fashioned judgment.
Credit ratings can mean the difference between life and death for a company, but the agencies should get F’s for failure, Fons and Partnoy assert in an editorial in The New York Times.
“No one has been more wrong than Moody’s and S&P,” they write.
They gave stellar marks to large but troubled companies such as AIG and Lehman Brothers. Mortgage-backed assets now called toxic got AAA ratings until recently.
Thanks and a great buy at $3. I agree this was a great buying opportunity since the market already knew the company would have to do some asset selling. This was a shakedown to get some cheap shares from weak hands. It works everytime!
Imagine how the stock might drop if there was a real downgrade. These rating agencies might just be a tool of the hedge funds wanting to trade stocks up or down. Agencies can announce they might up or downgrade just about anything and the speculators trade the market wildly.
Yes, I often wonder if the low pps in comparison to other G&P's is mostly due to hedges/shorts etc. APL has double the volume of many G&P's, but the price action to the upside disappoints, and I've said before, several recent analysts ratings that I have read (some updated yesterday) on APL are buy, hold, and neutral, with one sell.
Moody's making an announcement is no reason to say anything more on the subject until some part of the company's plan is "finalized" as by a written agreement to sell some asset.
The company has already mentioned its restructuring moves in the ATLS conference call and the APL conference call. Anyone who sold in a knee jerk response to Moody's could not possibly have been paying attention.
In point of fact, a downgrade before an asset sale could be beneficial in the short-term. If you noted from all sorts of sources, in December APL bought back some $60 million of debt for $40 million due to the market value of the debt being reduced. Wouldn't it be sweet if they could pull that sort of play off again, buying back debt at a fraction of market and using the proceeds from an asset sale to do so.