Take a look at Netflix NFLX and this is what can happen when you get short on the wrong stock. This is unbelievable, people shorting from $100 - 160 and the stock is now trading at $190 - the short percentage of float is 32%. The PWER shorts are not into something as risky ok but it's reasonably likely that the stock could be taken out if it trades at such a low PE. What do you think?
>>The PWER shorts are not into something as risky ok...<<
I'm not so sure about that. After all, NFLX is trading at around 50x next year's consensus earnings estimate. Meanwhile, PWER is trading at around 7x next year's consensus estimate, with those earnings projected to be 27% higher than this year's number. If it starts to look more certain that this company will make its number and if it were then to trade at a forward PEG ratio of just 1, it would be $34/share, lol.
(That is NOT a prediction; I'm merely pointing out the upside risk to the shorts here.)
Logical, I'm not saying it's not risky, I'd be crapping myself to be short on something as volatile as this. The worst case scenario would only really manifest itself with a take out as given the lowish market cap, we're probably talking $20 + for a take out. Not sure will the takeover happen of course.
What's the impact of rising oil do you think? I note the 2011 forecast is $95 per barrel.