OSTK

Anadrol 50 · #1 03-09-2004, 08:17 PM

I am making a ton in this stock. I think it will go even higher due to all the outstanding shorts. Any thoughts ?

adios · #2 03-10-2004, 02:24 AM

A quick scan of the financial statements shows a lot of revenue growth but the costs of revenue seem to go up proportionately. Looks like a lot of variable costs as opposed to fixed costs. Balance sheet looks solid. When and how do they expect to go profitable?

Anadrol 50 · #3 03-10-2004, 08:19 AM

Not for a while.....

They are similar to a baby Amazon, a pure e-commerce play. Looking technicly I think the reason for their impending reraise is the huge amount of outstanding shorts. I think it is something like 7 times their average daily volume. The stock has been up every day for the last month.

adios · #4 03-10-2004, 11:46 AM

[ QUOTE ]
They are similar to a baby Amazon, a pure e-commerce play.

[/ QUOTE ]

Building a brand, fair enough thanks. Really don't know that much about short squeezes so wouldn't necessarily buy for that reason. But that's me, not saying a short squeeze isn't a reason to buy. Thanks for the feedback and posting.

Ray Zee · #5 03-10-2004, 12:05 PM

generally when there are lots of shorts you can be sure the stock is overvalued. the shortters are not newbies to stock picking. profiting from a short squeeze isnt very easy. reconsider your position for a while anyway.

DOTTT · #6 03-10-2004, 05:49 PM

Shorts are wrong more often then right just take a look at NFLX or CALM.

AceHigh · #7 03-10-2004, 10:05 PM

I saw the same thing, revenue up 4x in 2 years but no decline in losses, no closer to break even. The CEO of the company has bought 13 million worth of stock recently, so that might explain the run up as much as anything.

If I owner the stock I would be looking to sell on a downturn. The shorts look like the smart money.

http://biz.yahoo.com/tsp/040305/10147252_1.html

It dropped 13% on 3 times normal volume today. Today was a bad day for a market, but I would seriously think about taking my profits and running on this one.

adios · #8 03-11-2004, 01:26 AM

I'd just point out that the example of 2 stocks doesn't mean Ray's wrong.

BadBoyBenny · #9 03-13-2004, 01:00 PM

Very interting scenario though, where the CEO of the company tries to single handedly cause a short squeeze by buying a ridiculous amount of stock. I doubt this is something that the shorts expect or are ready for and it may have worked.

My opinion on OSTK is that they trade at a somewhat reasonable multiple to sales (it was much more reasonable around 20 than at 30), have a candid CEO (which is very rare in ecommerce) but they are way too risky for my portfolio. I love to look risky stocks but usually end up owning boring ones.

I browsed their 10K and have no idea why they would drop 5 million on a lot of watches that go for over 15 grand apiece. If they screw this up its enough to have a big effect of a company whose profitability is so borderline. They don't seen to have a demographic in mind for their customer. I don't see someone buying a 20,000 watch to browse internet discount sites for the best deal. However, I'm so far under their league I really have no idea how you shop for something like that.

Anadrol 50 · #10 03-17-2004, 05:44 PM

It had a sick run today....

Should I get out ?