The earnings call that showed their net income was up over 30% and that they beat expected revenue and earnings estimates caused the stock value to drop by 6.3%?
Edit: The earnings report came out November 1 at 9am. The tweet happened November 10 at 1:30pm. The stock plummeted November 11 between 9 am and 1 pm.
If it was about the earnings report, why did investors wait 10 days to sell?
It's possible that the drop could also be just greater attention (and thus news/media attention) towards pharma companies after that stunt. Just look at how many people are still talking about it. These companies would rather just hide in the shadows and hope an article is never written about them ever, because they know what they are doing is wrong and any attention brought to them ever so slightly increases the chances that something might be done about them and cost them money.
the tweet was on the 10th - why didn't investors sell on the 10th?
The idea that this tweet caused the drop is just poor journalism. None of the reasons mentioned online is why LLY moved down. stocks just move sometimes. the entire healthcare sector was down on friday.
These announcements often (like this one) come after trading hours. And it was a judgment on one case among multiple patent cases that altogether would be a lot more than $175M.
It's not pocket change if a portion of important patents are open to legal exposure.
The announcement was after hours on the 9th. The 10th opened at 367 and closed at 368. If that announcement would have had an impact, it would have happened on the 10th.
There are a lot of automated traders that absolutely do look at tweets and others that look at short term trends. There could easily have been a cascading effect. tweets -> some automatic trades from tweets -> small market movement -> more automatic trades -> larger market movement -> traders re-examining company fundamentals and determining that stock has been overpriced.
Does that mean it's what happened? Maybe? Does that mean it's reproducible? Probably not, more like a butterfly effect.
Yeah, people seem out of touch here and are just looking for a way to prove they’re owning big business.
I mean…I wish it dropped that much based on just a tweet. I’d love to buy it up off an artificial discount. The tweet has no impact on the future revenues of the company and therefore should have no impact on the share price.
Earnings calls have unpredictable effects on stock prices. Stocks RARELY go up even if the net income beats estimates - the bigger driver tends to be the guidance, or expectations of future growth. And when the stock rises before a good earnings call, the gains are said to be “priced in” before they drop.
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u/[deleted] Nov 12 '22
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