Amzn
- Thread starter pumpanddumper
- Start date
Yes - I just came across a long-short mutual fund who, as of March 31, had as two of their top short holdings: AMZN and AAPL.
Ouch!
Ouch!
Hmmmpf... in this case, I think the great increase in volume is the cause, with the price being the effect. I do not think the volume will continue at this pace or above, so with so many buyers today vs. a normal day, who is left to buy in this number?
I submit that this is a classic short squeeze, after which I have found it likely that the stock will trade below today's open.
Now, I am not saying the trend has suddenly changed to down, or that the gap will fill, or that ultimately the stock won't cruise higher. But, the hype will have required many shorts to cover, and there should also be weak hands that bought in long today.
Time will tell, but I think 50 is a good number
I submit that this is a classic short squeeze, after which I have found it likely that the stock will trade below today's open.
Now, I am not saying the trend has suddenly changed to down, or that the gap will fill, or that ultimately the stock won't cruise higher. But, the hype will have required many shorts to cover, and there should also be weak hands that bought in long today.
Time will tell, but I think 50 is a good number
Give me a break. I'm long goog short amazon (thru Jun 55 puts and Jun 60 puts). how's that for balance. Hopefully it doesn't get to 70, but if it does, I am buying big late 07 atm puts.
valuation wins.. well most of the time. Take a look at ICE. Remember the euphoria a few months ago ??? 167 -> 122 in a week or two.
OR.... Take a look at gasoline last week. Solid fundamentals, but too many longs (opposite this situation). Sold off nearly 10% in one week. Now its 15% higher.
Amazon just doesn't have the fundamentals for a 61 price. Maybe 45-50 at the most (and thats with aggressive growth rates). I won't even suggest a more in-line 40 price target as I'd be mocked.
Sorry but next Q one time harry potter sales aren't enough to make a company.
How did you find those numbers?.
http://internet.seekingalpha.com/article/33357
Have a look at the transcript. Lets say they meet their 32% growth rate. Lets say they match high expectations (65-105mm next q) and finish next 4 q's averaging 25c [look to past #s]. Superimpose 1.00 instead of .67 (old expectations)? [VERY ambitious] on the 07 #s found here.
http://finance.yahoo.com/q/ae?s=AMZN
That comes out to 1.00 for next 4q.
That is a forward PE of 62.50 (62.50/1.00), with a real growth rate of 32%. Take out forex, tax, and economy risks, and forget it. Thats a 2.0 PEG IF they meet and beat all expectations. Note holiday season 06 was .21 !!! So I'm being generous and giving you .25 PER Q all next 4 qs. Ridiculous to expect. I'm sure 'real analyst' work on quarter by quarter expectations all points to a PEG of 3.0...
And tertiary points on value:
1) 500m buyback will have to be leveraged no doubt, as their cash position is only 1.42bil. A wise decision to float debt to undilute a very very small portion of the stock?
2) temporary taxation and possibly forex mechanism benefits
If they were forecasting 65% growth, then I say fine, this stock is priced appropriately. But they are not. Not to mention median targets are all around 48.00. Remember when these upgrades were released, AMZN was flirting with 49.00 afterhours. Only yesterday did the huge short bloodfest start.
Again, I'll be generous to the bulls and just assume the shopper stays strong and continues buying crap at a rapid pace. The valuation argument is so strong is doesn't need to factor 'what if consumer slows down from less home equity line availability' side of the coin. In conclusion, with a PEG of 1.50 based on my farsical and inflated expectations [1.00 earnings next 4q] designed to accomodate the bulls [an inflated multiple factored in considering we are in a bull market], AMZN should be at 45.
I agree AMZN should be $45. That's my short target, which is definitely getting away from me now... sigh. Good thing it's puts, or I'd be really upset today.
HOWEVER... if it doesn't fall, you are looking at irrational exuberance and perhaps the ernest beginning of tech rally 2007.
In 1999... AMZN was around PE 100 or higher, as I recall (along with all the other bubbleables).
I hope it falls, but right now... it's not looking good.
HOWEVER... if it doesn't fall, you are looking at irrational exuberance and perhaps the ernest beginning of tech rally 2007.
In 1999... AMZN was around PE 100 or higher, as I recall (along with all the other bubbleables).
I hope it falls, but right now... it's not looking good.
104 million shares were traded yesterday, and today 63 million. There has to be a seller for all this. You might see new highs, but the closing prices probably wont be as grand as they were...IMO.
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