coitus

Deutsche Upgrades Navteq Following Buyout: Totally Pointless

I'll let you in on a little secret of how the sell side gets compensated in the post Spitzer world. Analysts get compensated for "market moving" upgrades/downgrades. In principal, an analyst makes a smart call that causes a stock to move, they get rewarded for it. As in any comp system, guys have figured out how to game it. So when you have a market moving event (i.e. a takeout), it pays to upgrade from Sell to Hold. In a dumb comp system, boom, you just did a market moving call and you'll get compensated for it even though you had nothing to do with it. Think of it as monkey piling onto good/bad news by analysts.