BusinessWeek wrote a short article about the ongoing feud between discredited wall street analysts Henry Blodget and Mary Meeker. Evidently Blodget pointed out an error by Meeker that threw her calculations off by $4.3 billion.......chump change! Of course after Meeker corrected her error, she then changed her assumptions in order to make her analysis look better. If this isn't proof of Wall Street not being honest and not putting your best interest first.....I don't know what is.
Scott Dauenhauer, CFP, MSFP, AIF
Article below.
WALL STREET
Blodget And Meeker Redux
In an echo of the tech bubble, once-iconic Internet analysts Henry Blodget and Mary Meeker are battling it out again over stock valuations. But this little rivalry involves estimates of how much Google (GOOG ) can make by overlaying ads on videos viewed at its popular YouTube site. In an Aug. 22 post to his Silicon Alley Insider blog, ex-Merrill Lynch (MER ) analyst Blodget, who is barred from Wall Street for hyping stocks that he privately dissed, argued that the ads could bring in as little as $12 million or as much as $360 million in gross annual revenues.
Then Meeker, the Morgan Stanley (MS ) analyst dubbed the "Queen of the Net" before her name became synonymous with the excesses of the bubble, quickly released estimates that the ads could bring in $4.8 billion over the coming year.
Blodget called out his former rival by noting that Meeker had made a critical math error: In estimating how much YouTube could make for every 1,000 video ads shown, Meeker's team neglected to divide by 1,000. By her math, Blodget mused, the YouTube revenue would amount to only $4.8 million.
Meeker, whose firm co-underwrote two of Google's stock offerings, promptly corrected her error. But first she revised upward some of her original assumptions to still argue that YouTube could bring in $504 million to $1.26 billion. Meeker was on vacation and unavailable to comment. Blodget declined comment, but on his blog he joked that Meeker's move was another example of the Wall Street practice of "backing into the numbers."
By Heather Green
