I'm definitely not a bull on them that's for sure. I'm not a huge fan of shorting for reasons similar to what is happening here. DVD is a slow natural decliner, and they don't have the chops to pull a Netflix change of business. They didn't even start Redbox they just bought it.
I don't see an out for them. They tried the streaming and have made it extremely appealing with the free videos as a throw in, yet they still can't make any traction. I thought that Verizon would do way more to promote the streaming, but it is non existent.
I agree that shorting this will be difficult especially for the next week or two with the squeeze that will take place. Eventually reality will set in that they were too late to the streaming party, DVD's are dying, and very few people have change to count anymore. I think people are hoping for a "shakeup" from the activists, but what can they do? They aren't sitting on a pile of cash to do a buy back, dividend is out of the question, and they are not even a player in the content bidding game. The bottom line is that if you don't have the crucial kids content you don't have a shot in streaming.
I agree. If anything change it to Redbox considering that is the brand most are familiar with. The shorts on that stock are going to get murdered over the next few days. I tried to put a short order in just for the sake of seeing if Ameritrade had any to borrow, and the result was no shares available to short at this time.
That heavy short interest is going to lead a monster squeeze over the next few days. That is what happens when people get to greedy. The stock dropped $10 in two days and people stayed short on a stock with an insanely low P/E. We all know that they will eventually parish as a result of streaming, but way to dangerous to have shorted after the pre announced earnings. Now the shorts are trapped and will cover furiously, thus wiping each other out. It should be a good short in the high 68's next week.