It’s a fun month, though.
Most of the humorous but strange stuff usually occurs in the last two weeks of the year, when no one is around and big institutional investors have already closed their books. So even a little buying or selling can make stocks dance.
The oddest things seem to happen with mid- or small-cap stocks. Decades ago, for example, I was managing my first real equity portfolio–Australian stocks, although I could buy New Zealand-listed names, well. As it turned out, I (more properly my then employer, TIAA-CREF) was the biggest foreign investor in that region after the Kuwaiti Investment Office (an aside–I went to London to meet and compare notes with my KIA counterpart. I rang the bell at the front door …and a glass side panel slid open to let me in. Straight out of James Bond, I thought, but apparently a necessary security precaution).
Anyway, on the last trading day of the year, a big domestic Australian portfolio let its favorite broker know that its performance for the year would be perfect if the ANZ Bank stock (I think–it was at the very least one of the big three financials) would by chance go up a bunch that day. At the same time, however, another major-league portfolio hinted to a different broker that the sun would shine more brightly if ANZ went down that day. A cynic like me took the real issue, and the source of PM happiness, to be the bonus payments that would be triggered by the hoped-for outcome.
Anyway, at midday, despite mind-boggling volume generated by the competing brokers, the stock price was unchanged. At the lunch break (yes, that’s right), brokers A and B talked. They agreed that A would concentrate on making the stock go up on the Melbourne exchange, B on making it go down on the Sydney exchange (could have been vice versa, though). The day ended that day with all parties satisfied, but with a mind-boggling spread between the price for a top-ten market cap stock in two different cities.
December in the US is already off to a great weirdness start.
Symbotic (SYM), a stock I own–and, for good or ill, have bought more of on the current weakness–went down two days ago by around 20%, the sharp decline apparently triggered by a negative report from Goldman. I haven’t seen the report, but commentators who apparently have say it cites as worries iffy sales prospects and potential cash flow problems.
One weird thing about the analysis is that the sell recommendation came just after SYM published its annual 10k. The cash flow statement in the 10k shows the company with about $1.2 billion in cash on hand, several hundred million of that generated from operations during the last fiscal year. My reading is that not only is the company cash-flow positive, but it also has more cash on the balance sheet than it needs.
In its recent quarterly conference call SYM also mentioned that it is talking to companies in the EU for the first time, as well as to medical supplies firms worldwide. And it is saying that its products are several years ahead of the competition. If that’s anywhere close to true, sales prospects would seem to be pretty good.
There is a backlog issue, discussed by the company for at least the past several months. It has to do with the timing of new cash flows. SYM is revamping its general warehousing product, so customers are no longer buying current the soon-to-no-longer-be-shiny-new product and are waiting for its successor to emerge in the first half of 2026 before placing orders. The first half of the new year will be flattish, I think, as old backlog is worked down and before new orders come in. (All of this, and a coherent and persuasive (my view) presentation of the results is, I think, why the stock rocketed ahead the following day.)
Then came the Goldman report, and the stock gave up its gains.
It shot up again yesterday.
A second weird thing. Last night, SYM announced it’s making a stock offering to raise around $500 million through Goldman and Citigroup. So Goldman has trashed its own client’s stock just as it’s trying to persuade clients to buy it. Presumably great for the buyers, but not a great way to get repeat business from the investment banking client.
…only in December.