New to this stock, have some questions for the board
Hi all, I am looking at the numbers of this stock and I want to make sure I am reading this right. They burned through half of their cash this past year, but finally turned a small profit this past quarter. So, how sustainable its it and is it the start of a trend of profitability, or did the stars align once and that's it? Seems like ANGI is at the head of the line of the current market darlings, and in my 20 years of trading I can say that 99% of the time when a stock gets this strong it ends in tears. I initially came to this looking at a momentum long but now I am thinking short. Noticed it changed to hard to borrow half way through the day. Thinking about August puts, maybe 22.50's. Premium is high since this is behaving so emotionally. Any thoughts on this? Last time I saw a group of stocks as strong as this was the reverse merger Chinese stocks in 2010, and that ended very badly. Seen it other times as well. Not sure how to even value this one except as a feel good story stock. Any thoughts?
Thought about it overnight and decided to take an initial put position today. Could go up more, but I am convinced it's going back to 10 in the coming months. Moves this emotional are usually retraced 100%, in my experience. Patient short here. I will continue to average in over the next week.
Not trying to flame you or anything, but didnt you say last week that this company would lose money the rest of the year by it's own admission, and that there was no good reason to buy this "loser"? I know there is momentum higher, but can it last?
Ztrader1000 Angie"s List did not make any money last year, they lost 52M. The only way they made a $.02 profit last quarter was by cutting marketing to almost nothing. The net book value is $.09. That is nine cents per share. The problem I see is that institutional investors own 76% of the stock and it is going to be hard for them to admit they have a loser on their hands, but as soon as one of them blink and start selling, watch out, longs will not be able to get out of the way fast enough. Angie's List has no money and they make no money.
Ahh. actually that makes sense. I was thinking this morning how I had seen them advertised far less in recent months compared to a year ago or so. Hmm. If they cant afford to advertise they are in a tough spot because they've got to advertise to bring in the paid subscriptions and eyeballs. They need to get traction. Also, another problem I see with them is their business model is easily replicated. I mean really, any of the big boys could do this and probably do it better. Like Google for instance, they are a wealth of data ANGI will never come close to equaling.
So, what about the possibility of being acquired? That's about the only major threat I see here to the short case beyond the short term. Of course if a competitor can do it themselves why bother? What would it cost for, say, Google to do this on their own compared to the cost of buying ANGI out? Price has gone up a lot for ANGI lately for a buyout for sure. For the short term anyway.