Ford's Mulally Is Beating Around the Bush
NEW YORK ( TheStreet) -- Dismissing the price action over the past two days, Ford
Still, the share price barely budged. Of course, any remotely active F investor has likely witnessed the stock drop to $15.30, an 8% fall from Tuesday's closing price of $16.70.
Even during Wednesday's rally -- induced by the Federal Reserve's latest tapering announcement -- shares of F still closed lower by some 6+%. Not generally a good sign, especially when both the Dow Jones Industrial Average and S&P 500 posted record closing highs.
Before dissecting the recent move lower, let's take a step back and discuss the previous three months of share price stagnation.
Increased speculation regarding CEO Alan Mulally's potential departure to Microsoft
But it has mattered, and honestly, it will continue to do so until the headwind is removed. Personally, I don't think Mulally's going anywhere .
The move for Mulally to stay would (and should) not come as a surprise to investors at this point. Although to reassure them that it's true seems rather important now.
Of course, the most recent shellacking was not helped by this management uncertainty. Many investors -- admittedly, myself included -- were hoping that the company's last-minute analyst meeting was staged to announce Mr. Mulally's future plans, which hopefully included staying put in Dearborn, MI.
Instead, the meeting was much worse than expected. Not only was there no light shed on the Mulally situation, but the company also announced that it expects 2014 pre-tax profit to be lower than 2013. ( Click here for the entire slideshow.)
Even though global markets are recovering and the U.S. remains strong, new vehicle launches and recalls (particularly the Ford Escape) are expected to weigh on its bottom line.
The price action isn't shocking, given this news. Over the short term, the stock is oversold and will probably see a little bounce back in the next couple of trading sessions. If anything, it should at least settle down and find a bottom, even if it's only temporary.
But why should investors rush into Ford, when automakers like General Motors
GM just announced a seamless transition with its chief executive, naming Mary Barra the new CEO -- which was a tremendous and deserving accomplishment on her part.