News Doesn’t Matter, Dell Edition


Barnett has a great little story today about the stock market’s reaction

to news that Dell has been hit with a lawsuit from New York Attorney General

Andrew Cuomo: the company’s shares were last

seen up $1.25 apiece, or more than 5%. To put it another way, Cuomo would

seem to have increased the value of the company by $2.8 billion.

There’s even a great quote from one of those people who is convinced that news

moves stocks, even when it’s obvious that it doesn’t:

Goldman Sachs analyst Laura Conigliaro said she thinks investors might be

pleased the suit wasn’t connected to a separate investigation by the S.E.C.

into Dell’s accounting practices, the Associated Press reports.

Oh, for an analyst or a journalist to be able to admit that there isn’t always

a causal relationship between news releases and stock-price moves! The fact

is that Dell stock went up and (weak version) nobody knows why, or (strong version)

there simply isn’t a reason at all.

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