In: Finance
2. Discuss whether James Stewart’s assessment of eBay reflects any psychological phenomena.
On January 26,2005, James Stewart wrote about eBay in his wall street journal column "Common Sense".
Before the assessment done by James Stewart eBay's CEO Meg Whitman gave the reason about the growth and the future growth due to this the stock price and the market value of the share decreases in the market.
James Stewart's assessmemt of eBay reflects the psychological phenomena in the following ways :
1. James called it common sense because people and analyst in the market does not see the facts behind the annoucements.
2. They act on the sendiments rather than the facts and future plan of the company.
3. After the statement given by the James Stewart many analyst and investor might be possible that they will think again and see the facts and future plans of the eBay as their CEO and CFO were saying.
4. It will saves the eBay from forming the wrong perception by the analyst and other agencies in the market.
5. It will possible that after the statement the price of the stock and market capitalization will rise by its time in the future.