Threadkiller, you seem to be suffering from the misconception that prices of stocks are linked to the underlying fundamentals of the company. While that may seem like a reasonable idea, it just isn’t so. And before you venture into the world of wall street trading I highly recommend that you get past this line of thinking.

Stock prices instead are based on what traders think other traders will pay for the stock in the near future. Typically, when a company buys another company and then lays off a bunch of workers, that stock will bounce. I’ll leave it to others to argue if this makes business sense or not, but to me it doesn’t matter. This is what is routine and so this is what happens.

XBoxBoy

Threadkiller, you seem to be suffering from the misconception that prices of stocks are linked to the underlying fundamentals of the company. While that may seem like a reasonable idea, it just isn’t so. And before you venture into the world of wall street trading I highly recommend that you get past this line of thinking.

Stock prices instead are based on what traders think other traders will pay for the stock in the near future. Typically, when a company buys another company and then lays off a bunch of workers, that stock will bounce. I’ll leave it to others to argue if this makes business sense or not, but to me it doesn’t matter. This is what is routine and so this is what happens.

XBoxBoy

Well, the other angle is “cost-cutting” to drive up short term profits is

a)bad news for employees

b)good news for shareholders

If in doubt, just look at HP and talk to some former employees there.

However, cost-cutting because company is totally foobared/screwed after posting hefty losses generally is not good news for anyone….

Also, short term stock movements appear to be more sentiment driven than any other rationale.

Anyone want to bet today Intel’s going to report good profits, but wall street will be disappointed because although they probably will beat estimates, they didn’t beat “whisper” numbers or some B.S. like that. Me thinks the run-up in the chip sector is about over, short of something spectacular from intel

Well, the other angle is “cost-cutting” to drive up short term profits is

a)bad news for employees

b)good news for shareholders

If in doubt, just look at HP and talk to some former employees there.

However, cost-cutting because company is totally foobared/screwed after posting hefty losses generally is not good news for anyone….

Also, short term stock movements appear to be more sentiment driven than any other rationale.

Anyone want to bet today Intel’s going to report good profits, but wall street will be disappointed because although they probably will beat estimates, they didn’t beat “whisper” numbers or some B.S. like that. Me thinks the run-up in the chip sector is about over, short of something spectacular from intel

Well, the other angle is “cost-cutting” to drive up short term profits is

a)bad news for employees

b)good news for shareholders

If in doubt, just look at HP and talk to some former employees there.

However, cost-cutting because company is totally foobared/screwed after posting hefty losses generally is not good news for anyone….

Also, short term stock movements appear to be more sentiment driven than any other rationale.

Anyone want to bet today Intel’s going to report good profits, but wall street will be disappointed because although they probably will beat estimates, they didn’t beat “whisper” numbers or some B.S. like that. Me thinks the run-up in the chip sector is about over, short of something spectacular from intel

When Company A buys Company B, people costs are reduced ie. no need for two accounting depts. This cost reduction usually results in increased profit. And increased profit will usually increase share price.

If you like dividend-paying companies that are currently hiring people, look at utility companies. Sempra Energy – Ticker: SRE (parent of San Diego Gas & Electric) is a utility company.

When Company A buys Company B, people costs are reduced ie. no need for two accounting depts. This cost reduction usually results in increased profit. And increased profit will usually increase share price.

If you like dividend-paying companies that are currently hiring people, look at utility companies. Sempra Energy – Ticker: SRE (parent of San Diego Gas & Electric) is a utility company.