Tuesday, January 08, 2008

Short seller ambush

Today's massive late afternoon sell-off in the equity markets was an orchestrated event by short sellers. It was classic and unmistakable.

The set-up was right. No question that this is a nervous market with a bias for the downside, a necessary situation for this trick. Randell Stephenson, CEO of ATT, was scheduled to be the keynote speaker at the Citigroup 2008 Entertainment, Media and Telecommunications Conference, an event for institutional investors in Phoenix. The time was 12:15pm Mountain, 2:15 EST. With only a few months in the CEO chair, Stephenson with his core career background in accounting was perhaps the perfect foil. No investor could have expected ATT to come out with all good news in this consumer stressed environment and ATT did not. On top of that Stephenson apparently ad-libbed that he "hoped" they would be able to get through this period(the wireless and business sides of ATT are doing fine, as ATT overall is, and this is simply poor communication). To sum up, weak market, planned event, inexperienced CEO, expected negative commentary, short short short, ask some tough rhetorical questions in the Q&A, and then get on the phones and scare the market to death. BIG Gains on the short side.

And that's the way it is.


Anonymous Anonymous said...

It could have been very simply bad news that affected the market. If there was some set-up, why hasn't the market bounced back today.

2:20 PM  

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