NewsFactor Network – While writing a story today on a Wall Street analyst’s prediction that Apple will be late in shipping its new iPod Nano, I noticed the effect the report had on Apple’sstock. Naturally, Apple fell on Wednesday.
The Yankee Group and Gartner Group analysts I spoke with warned me that Wall Street reports must be treated with caution. One analyst, who did not want to be quoted for the story, said to me: “I don’t think I’m going to touch this one. I don’t see a source for the Wall Street analyst’s estimate, such as an interview with either Apple or its technology supplier. If the rumor comes from the channel, I am not sure I’d give it too much credence.”
Another analyst told me that research firms, by and large, will never confirm or deny Wall Street reports about tech companies. “The most we will do is to speculate on ‘what ifs,’ assuming that a Wall Street report on one of the companies we cover is correct,” he said.
There is also the possibility of a more sinister motive for some of the reports on tech stocks coming from Wall Street firms. A report on MSNBC yesterday claimed that hedge funds control a significant amount of the world’s stock markets and that there are growing concerns among U.S. regulators that they are artificially manipulating share prices to make a profit.
One way in which hedge funds could manipulate a stock price is by using analyst reports to move a share price either up or down. Hedge funds basically make their money by betting on these movements.
