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join:2002-03-03
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| Re: Is it really short sighted investors? said by Titus Pullo  :or do these investors know something about future economic conditions that average Joe doesn't? It appears "the Street" columnist is reading more in to a VZ stock price drop than it warrants. He says that VZ has been dropping since it's October high. But, in fact, since its low on Nov 27 it has been steadily rising.
But you do have a point. And that is that most investors(by volume of shares traded) are institutional investors, pension funds, and mutual funds. And these investors will drop a stock if they don't forecast at least a positive return in the intermediate term. And to some of them, obviously, they don't see Verizon profits so hot for a while. But they can move back in to Verizon later, when they expect Verizon profits to start rising again.
It really isn't the stock market that is the key to whether Verizon is going to stay the course or not on Fios. It is up to top management and whether they can convince the Board of Directors that investing in Fios will have a good ROI in the foreseeable future. If their business plan for Fios is believed, they will get backing by the Board. But if the Board thinks that management hasn't made a good case for getting a good return on Fios capital investments, then Fios could very well be severely slowed down, even if it is not stopped.
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