The stock had been trading for $100 for months, then bad things happened to Rectangles R Us. It fell to $82, sat there three weeks, and then hovered at $65/share, where it traded at only a dozen turns times earnings. At this level, it magically seemed like the stock could go no lower, despite continued bad news flowing from Rectangle, which was being assaulted by Soft Corners. This $65 is the accumulation area at which buyside analysists and portfolio managers decided, either on a fundamental and/or technical basis, that this was the price at which to buy the stock and hold it, because eventually, from $65 as a base cost, the belief was that investors would see a very nice return from here.
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Finance: What is a Fallen Angel?1 Views
Finance a la shmoop what is a fallen angel? oh oh so sad I was once loved as [Sears crying]
were we all we were angels we floated way up here above the clouds above the
hundred times earnings high multiple-o- sphere but then we stumbled we failed
the market turned the environment saddened competition came and we did not
adjust so we fell as we missed our earnings numbers again and we missed
them again and again yeah it was just like that
a fallen angel is a company that used to be loved by everyone on Wall Street it
was the next Google the next Facebook the next Amazon heading oh so high to [Sears rocket flying in the sky]
the sky with no ceiling in sight but then well the ceiling actually came into
sight and got hit and the company missed a quarter and the multiple of earnings
the stock traded at got hit and the company fell again and again and again
and each time flew lower to the ground from the lofty lovely views of the
hundred X club a hundred times earnings club that's a very high multiple to be
now single-digit world of boring companies at six seven eight times
earnings yep no banker love barely any coverage even on Wall Street like nobody
even bothers to write about the companies anymore [Newspaper article appears]
it's just a bunch of vultures picking at their wings...hey! stop that yeah well
maybe someday they'll figure things out and you know get back up there where we
belong or where we used to or something like that it's so sad for now well
they're just hoping their wings grow back you know like these guys are hoping [Fallen angel companies grow wings]
yeah keep hoping there Sears
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