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Ctrip.com International Ltd. Message Board

  • megastone12 megastone12 Jul 6, 2010 7:23 PM Flag

    All of this because the airlines cut discounts??

    Three airlines - OK the big three - cut discounts from 5% to 3%.

    WOW the world has come to an end - mWe must all sell sell sell!

    But hang on - look at the CTRIP web site

    They are offering up to 60% discounts to customers who book early - So now they have to increase their prices a bit.

    But so will all of the competition - and remember CTRIP is the big one - so it will be even harder on the small guys.

    That should not be a big problem now should it. This is what happens in business- the customer pays.

    So all the idiots who sold today got suckerd by the shorties scam - more fool you

    Now watch the price ram up again as the shorties cover.

    SortNewest  |  Oldest  |  Most Replied Expand all replies
    • Yes, the world comes to an end simply because CTRP has been a momentum stock with an extremely rich p/e ratio, far outpacing it's projected growth rate. Stocks priced for perfection can't afford to have anything go wrong, otherwise you see dramatic p/e multiple deflation as the market realizes the growth rate will slow. Just consider what the price of CTRP will be if it's p/e falls to it's growth rate, which is closer to 20-25%. Substantially lower prices from here.

      • 1 Reply to fxdudeinmia
      • This is a rapidly growing market.

        Tourism has only just caught on in China.

        It has a very long way to go.

        There is no sign whatsoever that this market growth rate is going to decline in the foreseeable future.

        The current growth rate is in the 40 to 45% range.

        A fall to a 20-25% growth rate is highly unlikely - would need a massive credit tightening by the government - and that is not on the cards - the government is intent on stimulating domestic consumption.

    • The airlines paid 5% commission, now they'll pay 3%, that's a 40% cut, that is the margin on airline tickets will be 40% lower. If that's not a big deal, but do you think is a big deal?
      What's more, ctrp normally sells tickets or hotel rooms more expensive than direct sales, and companies are ramping up direct sales force, isn't that a problem?
      Margin will shrink dramatically going forward, that's why the stock is falling hard, but there is much more to come. The fair value for CTRP is around $10 if you take PCLN as an example.

      • 1 Reply to bornagainbuffet
      • Its a cut in margin NOT in total price - you really should learn to interperate data correctly. In effect the airlines are increasing their prices by a few percent. WOW that has never happened before.

        Get real this is what happens in a vibrant growing industry - its an excellent sign of a robust market.

        This small margin cut will be recovered from the customers.

        Consumption by the Chinese is growing rapidly as is the revenue of CTRIP. The short sellers are trying to exploit this non-event.


        Some idiot shorts are expecting a fall to below $20 -Hey hey - we all need a good laugh don't.

        All that is going to happen

    • That is a good point, it will hurt the competition just as much. However, that does not mean that c-trip wins, they and their competition could all lose profit margin, it could be a lose-lose situation.

 
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