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China Techfaith Wireless Beats By $0.04; Guides Above Consensus; Stock Up 12% in After-Hours Trading (CNTF 3Q05 Earnings)

I really do not understand Wall Street. It was just a typical hoax played by the Chinese. First, without any news, the stock price went south in a rush. To give this a reason, the company lowered the guidance for 3Q and the whole year. Then the stock price jumped on this bad news. That is just a typical well-cordinated scheme by the insiders.

After all, all the models designed by this firm are very unpopluar in China. NEC claims 3% of the Chinese market but manages to receive the most complaints compared to other brandnames. If you go into any retailor store and ask the salesman in China, they will tell how bad NEC models perform. Actually, Kyocera and Mitsibishi's models are manufatured by Wuhan NEC and designed by CNTF. And, their products are referred as having the same quality issues as NEC models. This is a fact that every cellphone salesman in China knows.

Please use some common sense: will you share your core R&D strength with someone else if they have enabled your core competitive advantage? Why not Nokia and Motorola share their design team with other brand owners? Will that bring more revenue to them or kill their edge? After all, the cellphone is far from a commodity. Superior qualify does not come in cheap. If CNTF is this great, why most of its clients enjoy a bad reputation on quality?

This timezero has got right on one thing: the stock price will still go up because the insiders need to sell high. They created a trough to allow their accomplice to get shares cheaper thus having more strength to pump up. But, the baloon will bust eventually. A company's product is the last thing to tell the truth.