Where the Muscle to Move the Market Is
It's reported today that Boeing's share price on the New York Stock Exchange took a tumble on reports by an analyst for Wachovia Securities that the Boeing 787 program is running into delays and cost issues. Joe San Pietro downgraded the stock, and I haven't seen his report yet.
But move the market did. Boeing's stock, and thus its net worth dropped 3.4 per cent on the news, losing $3.03 per share. That means if you owned a share of Boeing stock yesterday morning you lost three bucks by dinner time on the strength of an unsupported rumor.
Of course, by lunchtime today the market had shrugged off the San Pietro report and had regained $2.37, or 2.77 per cent of value. But you still lost seventy cents more or less.
In absolute terms what's it mean? Well, there are 790,739,000 shares of Boeing stock outstanding give or take. That means that around $2.4 billion of shareholder value was scuttled with the stroke of a pen, or the drop of a nuanced word. Things aren't so bad today, as we're only down by half a billion, more or less.
Does anyone besides me think that this was awfully beneficial to short sellers? It would be interesting to see what the moves were on behalf of Wachovia's clients who own Boeing yesterday.
It's also mighty cavalier with other people's money is how it looks like from here.