A broker is a highly regulated entity; given it supposedly has already attracted the attention of ASIC it is very unlikely to engage in contradictory or misleading actions that would bring all hell down upon it.
In fact, anyone suggesting another party is engaging in market manipulation really ought to consider their legal position when they do so.
A broker primarily profits through brokerage - it is not inclined to work against the interests of its clients for to do so is to trade reputation for short term gain.
Those who have been around 8 years or so would recall the sensation caused by ASIC demanding specific undertakings of The Rivkin Report as a result of its associated interests trading in securities in a manner not reflecting the reports recommendations.
I often wonder what happened to subscriptions following that 'little' incident (although it would not surprise me if nothing adverse happened!).
A more likely reason for the collapse in price from the 67c high is that there are investors that are not emotionally attached to the stock and who merely see an opportunity to realise an incredible profit.
The basis for their selling may be rule based, or simply because their analysis (or State One's) tells them that ADY is, indeed, overvalued at current prices. In addition, their selling may confuse or scare others into doing the same which may exaggerate the impact of their selling.
Current market conditions are not helping either.
People are only too quick to forget that it was less than 20c a short time ago.
That said, I agree there is contradiction between the last two State One reports concerning ADY (the first of which I have only seen in a posting here, eg: http://www.hotcopper.com.au/post_thread.asp?fid=1&tid=516536#1986529 which lacks the analyst's name).
25th July 2007: "ADY is a SELL above 45c per share in 2007-08"
Unless there were relevant changes (eg: share issuance) between these dates, it is indeed very questionable as to how a short term recommendation could change so radically in such a short time frame.
Was the research analyst the same for both reports?
SHAW is considering covering ADY, having recently issued an introductory piece to their clients. It is always better to have a spread of opinions from which to draw a decision.
Areo
ADY Price at posting:
0.0¢ Sentiment: Buy Disclosure: Held
