Will SIRI crack like WEL?

[garfangle]

Although marketsurfer and others made a good pick with SIRI at ~2.25 and it now is nearing on 4.00 is it a candidate ripe for a fall like WEL did shortly after the Iraq War was concluded? I rarely would suggest that a stock is overvalued, but it seems incredible that it could now have a $4.1 billion market cap, when in its most recent quarter its revenues were only $4.25 million with a loss of $106.69 million. A telling figure is that just its subscriber acquisition costs (ex-marketing) are $25.89 million.

However, its current assets are a comfortable $505.35 million, though the company has required $2.285 billion in capital to get to where it is now.

So, is SIRI a ripe short?

 

[formikatrading]

is to never short a stock based solely on valuation. Even if I could short this stock (what's the rule on short-selling these days -- I always thought it had to be at least $5/share with a margin account?), I wouldn't try to fight the upward momentum that it has at least in the short-term.

 

[F. d'Anconia]

Moot point, its under $5.00 so its not shortable.

 

[JT47319]

Ah yes, the fundie-based short. Because that's what traders do. Trade off of fundamentals.

 

[LongShot]

Quote from F. d'Anconia:

Moot point, its under $5.00 so its not shortable.

wher does this come from?? this is not true.

 

[gaj]

stocks under $5 are most definitely shortable, IF:
-> you do it on an uptick (for most stocks, NOT all).
-> your broker and clearinghouse can locate shares.
-> your broker and clearinghouse doesn't mind taking risk...

penson and csc (?) do not allow shorting under $5...

but others most definitely do.

 

[garfangle]

Quote from JT47319:

Ah yes, the fundie-based short. Because that's what traders do. Trade off of fundamentals.

When I am referring to the fundamentals, I am just putting out there some variables to keep in mind, not necessarily make a specific trading decision off of.

 

[valleyvintner]

Quote from garfangle:

Although marketsurfer and others made a good pick with SIRI at ~2.25 and it now is nearing on 4.00 is it a candidate ripe for a fall like WEL did shortly after the Iraq War was concluded?
So, is SIRI a ripe short?

I don't think so. The intraday (60 min) price action seems to point to a high somewhat over $4.75 before it corrects. Present momentum precludes shorting. However if optionable, SIRI could offer a reverse ratio butterfly play with a small profit at worst and a very nice one at best.

 

[gaj]

yes, SIRI has options...

(got puts this morning before the big breakdown, and shorted it twice during the day).

unfortunately, the spread on the ITM 5s has ranged from 10-20c for nearly the entire day.

 

[dafugginman]

it's not the leader in it's market, or even close. course, this has nothing to do with short term trading, but i'd rather be in the leader if this is a long term trade.