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  • lekinsh01 lekinsh01 Jan 29, 2013 8:15 AM Flag

    CRM is not VMW, it is growing big time, VMW was saturated..I got FEB 97.5 PUTS on VMW

    but this is not VMW.

    Sentiment: Strong Buy

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    • Jan 29, 2013 11:37 AM Flag

      That's because Benioff will never lower guidance until it's too late and the Ponzi scheme blows up. On the "earnings" call, you'll hear him babble on about their "great, fantastic, incredible" $4B revenue "run rate", even though they haven't even got to $3B/year and won't actually get to $4B/year until 2015.

      Sentiment: Strong Sell

    • the similarities are that it trades at a large cap Multiple, 25 Billion, and doesn't generate cash.
      If it does make money, why hasn't the book value of the company grown? They've never returned any $ to shareholders.
      Go ahead buy some more today.

      • 2 Replies to reit765
      • I placed bets on a crm crash and won less than half of them. Now i play it both ways and make consistent modest profits.
        The reason it keeps going up is that it has huge front end costs for each new client, and as the account matures it keeps getting more profitable. The valuation for crm is probably a three year forward. In my book, that is ridiculous, but it is what Mr Market wants right now so that is the wave I surf upon with a hedge. Earnings are not for a month yet so there is time for a pullback, probably back down to 170.

        I used to think this was on a NetSol track which went to 700 and crashed to 6, but it is probably more like ComputerAssociates which was the greatest new thing 15 years ago and it then settled to reality, much less dramatic and reasonably profitable. CRM will settle back to standard valuation but it will take time. The day will come when this trades below PE 20 but it could take five years. The safest bet for modest profit is probably a 12 month straddle or strangle because it will move big, up if it is for real, or down if it is a scam, and cover your cost in 12 months plus decent profit. Check out the chart on CA five splits before its peak at 80 now trading at 25. It was a long long cycle and it will devastate a long short without an open ended upside hedge. I think they purposely keep darkness over the public understanding of their model because they make so much money writing puts on their own stock. Everybody thinks it will crash because of standard valuation metrics, but the institutionals keep it lofty because Beni keeps them informed.
        Think about it. You are an insider, you just sold 25,000 shares at 175. Now you write 250 contracts for August at 19.00. you just made 4.375 million on your sale and another half mill on the puts against your cash. In the mean time the stock keeps rising. You will never get exercised.
        It's insane.

      • I think, u should listen to Cramer, he liked it hard. $200 is easy.

        Sentiment: Strong Buy

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