Barnett has a great little story today about the stock market’s reaction
to news that Dell has been hit with a lawsuit from New York Attorney General
Andrew Cuomo: the company’s shares were last
seen up $1.25 apiece, or more than 5%. To put it another way, Cuomo would
seem to have increased the value of the company by $2.8 billion.
There’s even a great quote from one of those people who is convinced that news
moves stocks, even when it’s obvious that it doesn’t:
Goldman Sachs analyst Laura Conigliaro said she thinks investors might be
pleased the suit wasn’t connected to a separate investigation by the S.E.C.
into Dell’s accounting practices, the Associated Press reports.
Oh, for an analyst or a journalist to be able to admit that there isn’t always
a causal relationship between news releases and stock-price moves! The fact
is that Dell stock went up and (weak version) nobody knows why, or (strong version)
there simply isn’t a reason at all.