Controversial Goldman Sachs Downgrades | BlackBerry (BBRY) | MannKind (MNKD)

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Goldman Sachs News  MNKD  BBRYGoldman Sachs is a well respected company that’s known to make moves in the market by analyzing and grading stocks. However, there have been quite a few Goldman Sachs downgrades that have been sparking quite a bit of controversy in the investing world. Two of the biggest being the downgrades of BlackBerry (BBRY) stock and MannKind (MNKD) stock. So, today, we’re going to take a look at these two downgrades, discuss whether or not these downgrades were really justified, and talk about whether or not investors should still trust Goldman Sachs grading.

BlackBerry (BBRY) Stock Downgraded To Sell

On Sunday, Goldman Sachs published a report that downgraded BlackBerry (BBRY) stock from a “Neutral” rating to a “Sell” rating; changing their target price from $10 to $9 on the stock. As a result, BlackBerry (BBRY) stocks plummeted Monday and Tuesday; falling from $10.67 per share to just over $9.50 per share. While this was happening, I decided to jump over to my favorite social trading room, StockTwits.com to see what was going on. From there, it became clear that the majority of investors and traders in the stream didn’t approve of the downgrade. So, I decided to do some research to see what all the fuss was about.

In an early review, it was almost impossible to find a clear reason for the downgrade. However, as the day rolled on Monday, I was finally able to find a few sources that seemed to give an accurate depiction of why Goldman Sachs decided to downgrade the stock. After a while of researching, I found that the downgrade was due mostly to concerns over the Enterprise Mobility Management Software the company offers. However, in the same note, the analyst mentioned an revenue expectations were on the upside when it comes to hardware.

Was This A Fair Downgrade?

Personally, I don’t think it was. While EMM Software sales may be of a slight concern, upward momentum in hardware sales as well as the company’s proven ability to solve problems tells me that the grade should remain at “Neutral”. According to the movement in the stock today, it looks like most investors agree with me. BlackBerry (BBRY) is currently up 1.33% (trading at $9.90 per share) and is expected to close the day in the green.

MannKind (MNKD) Stock Downgraded To Sell

BlackBerry (BBRY) doesn’t seem to be the first of Goldman Sachs’ downgrade victims for the month either. On March 3rd, analysts at GS downgraded MannKind (MNKD) stock to a “Sell” rating as well. In this case Goldman Sachs placed MannKind (MNKD) stocks price target at $3 per share; insinuating that the company’s stock would fall by about 50%. Following the downgrade, the stock definitely fell. Unfortunately, it fell for a much longer period of time than BlackBerry (BBRY). As a matter of fact, MannKind (MNKD) stock seems to have just started to recover.

The analyst at Goldman Sachs blamed a poor launch of Afrezza. However, at the time of the downgrade, the new drug had just barely hit the market. Reports also mentioned that MannKind (MNKD) was receiving pressure from diabetics to reduce their medication prices, but after quite a bit of research, I haven’t been able to find proof of the concept.

Was The Downgrade Fair?

In my opinion, the downgrade was not fair in this case either. Unfortunately, when I first saw the downgrade, I trusted what Goldman Sachs said. It’s not until the BlackBerry (BBRY) debacle that I chose to question their opinion and do my own research. With Afrezza being such a new drug on the market, it’s unfair to downgrade the company’s stock based on the drug’s performance. I could understand if the drug had been out for a period of 3 to 6 months, but in this case, the downgrade definitely came prematurely.

Should Investors Listen To Goldman Sachs?

In both of these cases, I was able to find numerous examples of analysts that have upgraded the stock ratings rather than downgraded. Unfortunately, I don’t think I’ll be trusting Goldman Sachs based on their word anymore; and I don’t think you should either. Your best bet when you see a GS downgrade from now on is probably going to be to do your own research and come to your own conclusion!

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3 COMMENTS

  1. Funny how GS is going to take a company public next month and the company uses MobileIron for its EMM.

    Also funny how the author stated BlackBerry needed to leapfrog other EMM providers to be relevant yet BlackBerry is the #1 provider of EMM

    If it looks like market manipulation and sounds like market manipulation…..

  2. My guess is that the same folks who brought us their “too big too fail” banking fiasco of 2008 are the same market manipulators shorting MannKind Corporation.

    The author is correct in that it is absurd to base a downgrade on just four weeks of sales, especially when everyone knows that Afrezza was a soft launch oriented first towards educating endocrinologists in their offices.

    The public will not hear much about Afrezza, except through the investment community and through diabetic early adopters who are using social media, for many months to come. Everyone knows this at Goldman Sachs. ManKind and Sanofi have made this clear in numerous previous conference calls.

    I also appreciate this author writing that MannKind, “was receiving pressure from diabetics to reduce their medication prices, but after quite a bit of research, I haven’t been able to find proof of the concept.” I have not had to look for that information because I knew it was a lie.

    All you have to do is follow the social media discussion within the diabetic community and you will know that Afrezza is priced just underneath the cost of injection pens and those pens are sold at a premium to injected vials of insulin.

    There’s a very informative video featuring Jim Cramer from 2006 where he speaks about how to plant false stories and why shorting companies that have great potential are the best companies to short.

    Think about that GS analyst false flag planted last week, then please take ten minutes to watch this video:

    https://www.youtube.com/watch?v=VMuEis3byY4&sns=em

  3. “At the heart of any senseless downgrade, greed is always the culprit”, copied from StockTwits. Follow the money trail. Days before the downgrade, who was buying huge quantities of puts. Who was writing huge number of calls?
    As soon as the bell rang on Monday, the puts skyrocketed, and the calls written the week before were covered for pennies on the dollar. Millions made in less than 48 hours. In any kind of plan to alter the market, the decision to walk it down is done before the article comes out, but if timed correctly, market manipulators claim that the share fell after the article and not before. Everything that GS said is inaccurate. in the coming quarter handset sales will be slightly higher because many were not part of last quarter because of late activations. BES12 revenues kicked in Feb. And in the next quarter handset sales will be slightly higher again this time due to Verizon and AT&T. At the same time, the amazon store is still selling, plus hundreds of online sites, plus carrier partners all over the world.

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