From a professional standpoint (I'm an accountant and financial reporting and analysis consultant), this short note makes me happy, because it looks like the downgrade is based on actual analysis, rather than just hype, momentum, and guesswork.
Citi appears to have been watching the pricing of rooms at Disney resorts, and has concluded that during the fourth quarter of 2007 (which is actually Disney's first quarter, as the company as a 9/30 year end), Disney needed to lower prices on rooms in order to fill them more than they expected to. Citi worries that this will continue, and Disney will need to sell rooms at a lower price in order to fill them. If Citi's prediction is right, financial performance would suffer to some extent, causing them to downgrade.
Also, if Citi is right, we'll all get our vacations for a little bit cheaper as the year moves on.
And regarding the suggestion that somebody may be wanting the price lower so they can sell more -- it doesn't work that way. The public capital markets move to whatever the market-clearing price is, so you can't sell more if the price is low than if its high. Rather, the price will have gone high or low specifically in order to balance the buyers and sellers.
If somebody were manipulating the stock price down by some means, it would be because they want to buy at the low price, then sell at a higher price when their temporary manipulation wears off. Alternatively, manipulators buy a lot of a stock, then talk it up on the internet and in other venues, and then sell before the market realizes they were just blowing smoke. That's called a "pump and dump".
There's no reason, however, that Disney or Citi would be engaged in of manipulation. This downgrade just sounds to me like the results of real analysis.
