Bears maul Marconi but dead cats bounce; STOCK MARKET: Future uphill for telecoms supplier which has broken into American market in a big way.
WEall know bears have a proclivity to do their business in the woods, or so the saying goes, but they can, quite skilfully, do it from great heights as well.
No where has this been better seen than in the last week where Marconi's woes have been compounded by a mauling from the bears.
You will recall from last week's words of wisdom that, even in times like these, money can be made from short selling and whilst I would not wish to see a great British company go down the tubes, one has to ask how much more can Marconi stand. Short selling (that is selling today to buy back at a lower price) is not new to the market but very rarely has it been seen in such a way in recent times.
The big boys came out in the week led by Goldman Sachs and Merrill Lynch and pushed the price further south than one could imagine or Marconi could fear. By early yesterday a staggering 800 million shares had been short traded, pushing the once pride of the markets close to the point where they have to switch all the lights off and go home early.
The financial decline of Marconi is mind boggling. Just over a year ago the company was capitalised at around pounds 33bn but now it weighs in at a paltry pounds 1.7bn.
But remember dead cats do bounce.
I am not about to suggest you pile in with your retirement fund but there comes a point when even the bears can't push the price down any more and Marconi has broken into the US market in a big way.
The future is uphill for Marconi but it can realistically look to positioning itself as a major supplier to the likes of Nortel, Lucent and possibly even Cisco.
After all this you probably feel like a stiff drink? Well I do and as I sit sipping my spritzer (I'm on a diet) you can rest assured my thoughts are never too far away from thinking of the markets.
This week has certainly seen a great deal of activity in the drinks sector, culminating in the acquisition of just over 50 per cent of Old English Inns by Greene King for a small sherry under pounds 30m. The pub sector has always fascinated me from the time of my first cider to nights that I want to forget but can't remember. However, shares in pubs can leave you with a serious hangover. This affair may yet be referred to the Competition Commission.
Well at long last our blushing bride TBI has told the French suitor to frog march off by advising shareholders to reject the offer from Vinci. We can only hope that a more eligible match can be sorted - we wouldn't want to see such a pretty thing on the shelf.
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|Publication:||Western Mail (Cardiff, Wales)|
|Date:||Sep 8, 2001|
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