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alstry (35.70)

Do Analysts have ANY INTEGRITY!!!!

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May 27, 2008 – Comments (4)

Some commentary on today's commentary off of Dow Jones: 

 "Everybody here feels great," said Jeffrey Peterson, who became Standard Pacific's chairman and chief executive earlier this year. "We feel awesome."

No kidding YOU feel "awesome", but how do you think your existing shareholders feel for selling out the company at such a low price when you just represented to them that book value was over $10 per share?

  For the most part, analysts were also positive. JMP Securities, which reiterated its market outperform rating, said the deal "secures the company's long-term future and provides significant potential for long-term growth."  Standard & Poor's Equity Analyst Ken Leon noted "these actions should improve SPF's financial condition." He reiterated his hold opinion.

How can these jokers make these kind of comments when the company just sold over 3X the outstanding shares at less than $2.35 per share and both analysts had a $6 or better price target prior to the transaction?  Do these guys give a damm about their firms clients?  Maybe just certain clients?

4 Comments – Post Your Own

#1) On May 28, 2008 at 12:37 AM, thisthatother47 (88.49) wrote:

"Maybe just certain clients?"

And with that you've summed up this entire mess - from the ratings agencies, to the analysts, to the investment banks...

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#2) On May 28, 2008 at 12:59 AM, awallejr (80.13) wrote:

Same thing with TMA.  The deals the CEO made kept HIS job, but diluted the hell out of the common stock.

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#3) On May 28, 2008 at 7:38 AM, alstry (35.70) wrote:

At this point, Mr. Peterson will face the hurdle of telling shareholders when requested to approve the deal that he is allowing MP fund to buy about 215 million shares at and average price $2.34 and forcing SPF existing shareholder to pay $3.05 for only upto 50 million shares.

First, why not make this clear in the press release.

Second, how much of the $500 million infusion will the banks require for debt paydown.  SPF has about $1.4 Billion out to public bond holders and about $500 million to banks in the form of a revolver, Term A, and Term B debt.

My guess is that banks will want to absorb a bunch of the cash while the going is good and the outlook is negative...the negotiations probably already started.

The two hurdles to the deal right now are shareholders and banks.....it will be interesting to see how this plays out....

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#4) On May 28, 2008 at 12:10 PM, PDTBiotech (94.55) wrote:

As I said in response to a previous rant, analysts don't do what they do for retail investors, and if you interpret their information literally or assume that it's meant for you, or especially that you're seeing all of their opinion, you're going to get burned.   Sell-side analysts' success is measured by the annual Institutional Investors poll, not by how accurate their estimates are or the performance of their picks.  You were on the right track when you asked "Do these guys give a damm about their firms clients?  Maybe just certain clients?".  If you don't like their numbers, believe me they really don't care unless you're voting in the II poll in October, and if you are they'll go the extra mile to make sure you're happy.  The tiny bit of info you see from the analysts is a drop in the bucket compared to what their institutional clients see, and often the public and private opinions are quite different.  A close friend of mine who is a sell-side guy at a bulge-bracket bank refers to retail investors as "hacks", and literally sneers every time he says the word.

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