More reasons why retail investors should never buy individual stocks.
LinkedIn is currently down about 42% (yes, 42%). Beat estimates but got downgraded by analysts and very severely.http://www.marketwatch.com/story/linkedins-stock-suffers-biggest-ever-selloff-2016-02-05
Symantec is up some 3% on a down day for tech with a failing business outlook but financial engineering arrangement http://www.marketwatch.com/story/despite-billions-in-fresh-cash-symantec-will-cut-costs-and-go-into-debt-2016-02-04
Both are companies that management is running to the ground and have been for a long time. You would never know it looking at the stock market movements. Twitter is joining these not surprisingly.
The thing that is common to both Symantec and LinkedIn is the inability of the management to innovate and keep moving the initial advantage they had. Both were playing not to lose, rather than to win.
But then since being in the capital markets makes the management rich enough in a year or two that they can retire anywhere in the world even if their jobs disappeared overnight, what exactly motivates them to do anyhing other than egos. Instead, shareholders and employees get left holding the bag. This is not what capitalism is about.
Symantec is essentially being taken private in a fire sale but you wouldn't see it from the recent financial engineering reported in that article. I would have loved to see the covenants in that debt financing. Getting a board seat for debt financing in a public company is unheard of except perhaps in very dire situations or bankruptcy. And people are bidding up the share price for the dividend announcement like dogs salivating at the sight of meat in the hands of an intruder.
Symantec was once a powerful force in software. They let their products deteriorate as the technology moved and cheaper competitors moved in. It had no vision in leadership, no new markets established. A near perfect failure to execute with very little to blame externally.
LinkedIn stumbled on to a great near-monopoly opportunity but ran the company only slightly better than CraigsList in innovation with extreme intolerance to risk taking. Part of the problem is going to public markets before the revenue is stabilized. The CFOs a reluctant to let the company spend on anything and if the CEO isn't a Bezos or Zuckerberg or a Sergei, who is willing to take a bold stand and set a strong direction, they just stifle the company into hubris and incremental changes until it falls apart. Often penny wise and pound foolish. Tim Cook may be taking Apple in the same direction.
Gilead will probably get a financial engineering CEO next.
All a consequence of easy money creating a greater fool market.