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Wall Street’s weird reaction to Ford’s news
Automotive News

By DAVE GUILFORD
January 28, 201


Wall Street’s reaction to Ford Motor Co.’s year-end results illustrates what a weird game it can be to run a publicly traded company.

To recap:

  • Ford posted a $6.6 billion net profit, hitting the range sometimes referred to as “Toyota money.”
  • Wall Street analysts pronounced themselves disappointed, and Ford’s share price fell.

Analysts were bummed because Ford posted fourth-quarter net income of only $190 million. That was significantly lower than $886 million in fourth quarter 2009.

But consider the explanation: Ford was busy launching products and paying down debt -- things that you want a car company to be doing, I think.

Ford’s sin was failing to meet analyst expectations, and that’s where things get, as I said, a little weird. Sometimes I think that Wall Street would applaud a company that lost $1 billion, assuming that analysts had predicted a loss of $1.5 billion.

Stock price movements -- and analyst buy/sell/hold recommendations -- can be misleading, too. Strictly speaking, they don’t track corporate performance. They represent the market’s bet on whether the share price will go up.


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Yep, they punished Ford for not producing what they wished they did........................ instead of basing the stock price on what they actually do.

Like Ford gives a care what the analysts "wish" for.

As wescoent said, buying on Friday would have been like getting free money.
 

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He is right. Stock price does not always correlate with performance. It correlates with expectations. That is nothing new.

I just briefly combed through the Q4 financials. I'm a little perplexed by them myself, specifically with Ford North America results.
 

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The Spaminator
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He is right. Stock price does not always correlate with performance. It correlates with expectations. That is nothing new.

I just briefly combed through the Q4 financials. I'm a little perplexed by them myself, specifically with Ford North America results.
What was it that looked out of place?
 
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