Herb's Hotline: The Market, Rock Center and More Cybernasties
It's the market, stupid: Ten days ago on our
Fox
show I predicted that the Nasdaq would hit 3225 -- meaning that the Nasdaq had fallen 35% from its high -- sometime this month. And it did just that (albeit briefly) earlier today! Gee, pinch me and tell me it ain't true: I can now call myself ... a guru! (
Gary B
. and
Dave the Kansas
still make me look overly optimistic, with their dire 3000 estimates -- and they may yet be right!) ... And, no, the excesses still haven't been squeezed out.
Lernout & Hauspie
(LHSP)
, the ultimate stock of excesses, still trades well above where it was
before
it started its rapid rise. The company recently did a 2-for-1 stock split. The stock is down considerably from where it had been, but it still must fall (sez me) at least to around 20 -- it is currently at around 39 -- for the excesses to be considered totally wrung out. (The shorts, of course, believe the excesses won't be fully done until the stock falls
another
39 points or so. Like you would expect them to say anything else?!) ...
Greater fool follies: Now that
Rockefeller Center
is for sale (
again!
) you can't help but wonder whether this is the ultimate sign of the top. The sellers are trying to cash in on the soaring prices of New York real estate. If prices are so high, you can only wonder who the buyer will be. If history is any guide, it'll be foreign investors, who have a tendency to buy U.S. assets at highs and sell at lows (the case with both Pebble Beach and the prior owner of the Rock.) ... Speaking of rock, let's turn to dock, as in David MurDOCK: The California real estate tycoon has finally gone and done it: Bought the remaining shares of
Castle & Cooke
(CCS) - Get Report
that he didn't own. That ends one of
the
longest rumored takeover stories I can recall -- one that has come and gone for most of the 12 years I've been writing this column. ...
Cybernasties: This morning's
HerbonTheStreet
mentioned that three shareholder class-action lawsuits had been filed last week against
Cyber-Care
(CYBR) - Get Report
. The company this morning denied all of the allegations and took a swipe at short-sellers. From the press release (as if to state a revelation): "Those 'shorts' have a selfish motive, contrary to the interest of the ordinary CYBeR-CARE shareholder -- to drive down the price of CYBeR-CARE stock, through manipulation means which include unfavorable press stories and deflammatory attacks on the company, its business, and its management." Deflammatory? Not a word in my dictionary. ...
Moving on: Remember
Able Telecom
(ABTEE)
? The company that bought a ditch-digging biz from
WorldCom
( WCOM) -- the same ditch-digging biz that has come under fire for delay after delay, and problem after problem, with the installation of the EZPass system on the Garden State Parkway? As this column
reported at the time, Able was sued by
Sirit Technologies
, a Canadian company that had tried to buy the MCI biz, then claimed the deal was stolen from under it by Able. Last week a jury in federal court in Florida agreed, and awarded Sirit damages of $31.2 million. Able doesn't have $31.2 million. Who will pay? Well, WorldCom is Able's largest holder, and is believed to be its largest creditor and customer. Stay tuned. ...
Finally, from the inflationary front: The only signs that the stock-market wealth effect has been squeezed out of part of the economy is anecdotal at this point, so let's get some anecdotes: The first comes from Saddle River, N.J. Carpenter
John Rock
who writes: "Large insulation contractors have seen two 3-cent-per-square-foot decreases from
materials suppliers in the last few months. Large sheet-rock contractors couldn't get the stuff last summer, when there was a month's waiting time. Now they can get it when needed. These are contractors that do condos or new houses -- large jobs." ... And from our very own
Mark Martinez
: "My friend, who happens to supply plumbing fixtures for almost every wealthy individual in Rancho Santa Fe, Del Mar and other wealthy communities near San Diego, says that their last month of biz was their worst month in four years. Further, customers who used to come in talking about stock gains, riches from stock gains, etc., are no longer doing that. The whole atmosphere has become very somber." ... as has the tone of this edition of ... The Hotline.
Herb Greenberg writes daily for TheStreet.com. In keeping with TSC's editorial policy, he doesn't own or short individual stocks, though he owns stock in TheStreet.com. He also doesn't invest in hedge funds or other private investment partnerships. He welcomes your feedback at
herb@thestreet.com. Greenberg also writes a monthly column for Fortune.
Mark Martinez assisted with the reporting of this column.
