Do you think it will go higher after 22% gain in two days?
I just recall the Dec13 action when the volume was over 40M+ shares and the stock shot up from $12 to 14+ just to come back the next day with hight volume to $12 area. Look at the historical prices
Date Open High Low Close Volume Adj Close
Dec 14, 2012 12.46 12.59 11.60 12.05 42,322,400 12.05
Dec 13, 2012 13.87 14.48 13.70 14.12 44,057,800 14.12
Dec 12, 2012 12.08 12.38 11.87 12.18 16,364,900 12.18
The reason it popped last time was because of the buyout deadline, once they extended it the stock dropped. Here you have concrete proof of better then expected comps driving the PPS. I doubt you will see the company reverse direction and say oops we made a mistake and we will get back to you in two months.
Even so, let me break out that crystal ball. Its kinda dusty, because I threw it in the closet last time it didn't work. It says, You may see a jump early morning, but don't count on it holding. Short term traders will cash in for gains at the first decline. Institutions may even try to shake out the stops. Then you will see a gradual increase just below the first fifteen minute high. Dropping back with a 50% retracing to the daily low. Back to about the close of Friday with adjust based on Russell, Vix and Options buys and sells of puts and calls.
Geez, now I am even confused. Damn crystal ball.
There is a limit to how high it can go from here because the estimated best case offer is $20 at this point. With only the possibility of a deal, estimated at $20 tops, it's not like this is going to trade at $17! Thus, the upside - unless concrete info comes out (not Star Trib rumours) - is limited going forward.
Tomorrow's trading is anyone's guess, but I'd be very surprised if we aren't back to the mid $13's at some point this week. If it ramps in the AM, I will be selling part of my long position and buying more puts. Most importantly, there will be many twists and turns yet as this plays out. Opportunities long and short.
Fundamentally, let's not pretend that we are seeing a cyclical turnaround in BBY's fortunes. Quite the opposite. A couple of bright notes (e.g. online sales), but overall not good. It took everything BBY could muster (price matching, etc), to put up flat YOY. The tax increases in the USA are not going to help retailers, that's for sure. And the trend toward tablets and smartphones instead of PCs and laptops is not good. Remember...we haven't seen the financials for the 4th quarter, just the holiday sales. Margins are declining. Same store comps are declining. Cashflow is ugly. Even though the greater-than-expected cashflow decline may have been mainly due to paying vendors early - that's still a bad sign that they want to get paid earlier. Big red flag. I think that if the buyout does not happen, the dividend will be cut or eliminated. It's ridiculous that this company is paying a dividend given its financial shape.
Those who think a deal will be announced any minute are kidding themselves. The agreed upon timeframe is February. The idea was to allow Schulze and his people to view the FULL YEAR'S *FINANCIALS* (which will be available the last day of January) - not just the holiday sales. If there is an offer, I'd expect it closer to the end of February than the beginning.
There is a good chance that Schulze will not be able to make an offer high enough for the BOD to accept, in which case he will go directly to the shareholders. Why would PE not wait or try a lowball directly to the shareholders? Why offer $20 when you could probably get it for $17 or lower? Just to get the BOD to agree? Not necessary. With x-mas sales behind them and the headwinds in CE and for the US consumer in the coming quarters - why pay up now? Makes no sense. As a long, I'd love to see a deal, but my take on the last few days is that a deal is LESS likely to happen - not more. As for the stock action, how many times do people have to see an earnings or news release pump and dump till they understand that this is how the game works?
I think you may see pullback tomorrow. There is so many out and out thieves out there that who doubts rumors being thrown around to help pro shorts get out of their positions/hedges etc.
I think as we get close to Feb. the stocks direction MAY tell us what Schulze is going to do. Notice I used the word MAY. Maybe the flat sales comps seals the deal for his buyout offer. Then again maybe the decreased cash flow projection does the opposite. Although surely the market bet on the former in Friday's session.
Ultimately, price matters and I don't care what anyone says about AMZN these state taxes are going to affect them and their Ponzi scheme stock. That bigger fool theory stock may see another pop-up but will have a good chance for a hard fall in the near future. Will it get to $300? I don't know but if it's on more hype I'll be shorting.