finally out of the doghouse? Here is one of those cases where a much-loved stock got kiboshed by the upside being explained away ahead of the quarter.
A few weeks ago, some rumbles came out that MCI Worldcom had price competition. (You may have heard the same thing repeated today on
by those two
guys.) The usual defenders came out defending to keep the stock in the air, but by doing so they revealed that there was upside of a penny or maybe two.
That's the kiss of death from where I am from. We don't ever want that upside used in defense because that takes away a possible pop when the actual quarter is announced.
Sure enough, some giant-sized account (we never know who these accounts are, and they are never given up, even to friends or spouses) decided to unload MCI Worldcom. You saw the pressure, day after day after day. I can't get into the mind of the seller, but there are plenty of people out there who think like me and were disturbed that the upside had been blown in advance.
(I know I was gun-shy because periodically there would be price wars that hurt predecessor MCI's quarter, and I didn't think that the combo of Worldcom and MCI would necessarily be immune from them.)
Today a combination of a rating reiteration from
Salomon Smith Barney
, courtesy of powerhouse analyst Jack Grubman, as well as a push from
(and these come on top of a new recommendation from
yesterday) seems finally to have finished up the seller.
I still worry that the upside will have been taken away. But without the monster seller out there, the stock does feel like it wants to do better. For the first time in two weeks, I don't have that nagging feeling that this great story has at last run its course.
PC boxmakers continue to ramp. If we had true community, I would ask for a thread to be put up about what switch got flipped that everyone says it is OK to get long these stocks. I know I didn't flip it. I am hammering this community thing home for two reasons: We have the smartest audience in the world, and
own staff has been slow in producing what I consider to be quality community stuff.
James J. Cramer is manager of a hedge fund and co-founder of TheStreet.com. At time of publication, his fund was long Goldman Sachs and MCI Worldcom. His fund often buys and sells securities that are the subject of his columns, both before and after the columns are published, and the positions that his fund takes may change at any time. Under no circumstances does the information in this column represent a recommendation to buy or sell stocks. Cramer's writings provide insights into the dynamics of money management and are not a solicitation for transactions. While he cannot provide investment advice or recommendations, he invites you to comment on his column at