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Nautilus Inc. Message Board

  • technotickers technotickers Oct 31, 2003 5:59 AM Flag

    OVERBOOKING

    The ones who flew during the 96-99 era know...
    Airlines were extensively practicing overbooking.

    Basically, they were (short) selling more seats than they physically had.
    Most of the time, it worked, and they pocketed the money of the "no show" (non refundable tickets).
    But time to time, ouch !..
    Everyone seemed to have decided to fly.
    Then came the painful momment for the (short) airline :
    the request for volunteers to give up their seat,
    and fly at a later time, for a hefty financial reward.
    (My personal experience : had a US-Europe flight for $500 ;
    was given $800 for flying the next day).

    Here, at NLS, this is exactly the same...
    The stock (plane) is 25% overbooked ;
    all the (seats) shares are taken ;
    and more (passengers) investors are comming in.
    So, all naturally, you start to here calls (from the shorts) for "volunteers" to give their seats.

    The difference between the street and the airlines is that, on the Street,
    you can bluff, and use scare tactics to get weak hands to give up their shares (seats).

    I bet you that if the airline did the following, they would have avoid paying me $800 :
    "Folks, the Captain wonders if the plane is safe after all".
    Is there anyone who wich to fly later (we will gladly take your seat for free) ?..
    "No ?,. well, let me tell you,.. we all wonder here if the plane has enough fuel after all !?.
    OK,.. anyone yet to give up their seat ?"
    You would certainly have seen some grandma - and other weak individuals -
    panicking, and giving up their seats for free...
    to the great joy of the (short) airline, who could have then cover the seats it sold previously short.

    Back to the Street, and its unforgiving environment :
    Logic says that we are gonna to hear a lot of bad things about NLS these comming days,
    especially from respectable individuals who have so much to cover :
    Fuel (cash) burning rate too high to fly the distance ;
    Obsolete airplane (product) ; ... name your favorite scare tactic here ...

    And as usual, their will be some who will be scared enough to jump off their seat.
    But with 25% of the seats sold short, shorties have a long way to go...

    So, do not be surprised if you see the price overshooting all the way up to $26 !..

    As I always say : the Street is all about irrationality,.. and bluff.


    Have all a profitable day.

    Important Note :
    As usual, this is my own opinion, worth as much as anyone's else.

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NLS
15.71+0.13(+0.83%)Sep 4 4:02 PMEDT