How to manage expectations
Desk-Pilot,
It is not really about spivs and braces.
Thomas Cook are a PUBLIC company, that accepted money from investors at floatation. They are duty bound to provide ACCURATE guidance to the London Stock Exchange as to how business is progressing.
It can be no surprise that when a business misses the previously stated by profit estimate by 20%, it has a bad effect on the share price.
It is as much about not being able to spout a load of old nonsense to the City - there by preventing asset bubbles - as it is about the City (not) understanding your business.
The facts are that the Chickens are coming home to roost here. Everyone - Thomas Cook included - thought business would be OK. It is not. It is dire. People are skint and they are foregoing their summer holidays.
Thomas Cook have a serious problem in the UK, and the City know it.
Had I still been a trader today, I'd have smashed the share price to pieces as well.
Remove the rose tinted spectacles: If the share price fall was overdone, the fund managers/speculators would have been hoovering up cheap shares all day. They've not been doing that for a good reason. Mainly because the share price fall is NOT an over reaction. On the contrary, there could be further to fall if the economy stays so subdued.
Best regards.
City Trader 1993-1999, Trainee Pilot 1999-2000 and Airline/Corporate Pilot 2000-present day.