Rumours are still rumours, even when they come from a man in a suit

From time immemorial some market rumours gain traction, and some don't. The size of the rumour can vary from a bit of minor gossip to the type of whispering campaign that some say brought down Bear Stearns, but one of the things that often counts is the source of the rumour.

As mentioned on this blog before, I'm taking the same attitude towards passing rumours on as I do with passing them on to other people. If it passes muster, it can get on here (and "passing muster" is my own personal judgement based on a sliding scale of several things). So when I first heard the word going around about Brazilian (basically cellular) telco Vivo (VIV) aiming at buying direct competitor TIM early last week, I thought "that old chestnut again" and dismissed it. This is the kind of unoriginal tosh that gets wheeled out by longs desperate to see an upwards movement in their stock, usually.

Then late in the week VIV moved up sharply when a dude named Alex Pardellas who works at Brazil's Banif published a report and called VIV as buying out TIM. Suddenly the rumour got legs, and with a (supposedly) serious analyst saying a buyout is in the cards, VIV did this.

So what is it going to do today, I wonder? I've heard more believeable scuttlebutt from the lady who sells me my newspaper, and just cos this BS comes from a guy in a suit, it doesn't mean it should be given any more airtime than it deserves, i.e. zero minutes and zero seconds. Because since that piece of officialized speculation from Banif hit the wires, TIM has gone on record as saying "The rumours circulating in the market lack any fundamentals". I do enjoy it when a company has the gumption to call a professional analyst out as the fishwife rumour-monger that he so definitely is! People like Pardellas hide behind semantic get-outs, and will always throw up their hands and say "All I said was that VIV could buy out TIM", but the modus operandi is so transparent that any protests quickly turn into the lady doth too much methinks variety.

The bottom line is that although the Brazil market likes to try and pass itself off as serious these days, it's still the Wild West show that it always was...there's just more money sloshing around for the cowboys to play with. Caveat emptor is still the most important phrase in Sao Paolo, and that goes for taking advice from the reputable banks and their staff, too.