OK, I've been silent for a while- because, frankly, anyone who's been short this stock for most of the last 2.5 years should just be lucky to be alive.
But I have noticed with IACI and it's heathen precursors- EXPE and USAI- they rise into earnings, announce record pro forma earnings, go up the next day and then slowly bleed down as insiders sell and sell without fear of "quiet period" or dangerously timed sales.
Barry will sound his usual overconfident self at the conference call, and will tap some head of some division who will act as if he didn't know Barry was going to ask him that and he'll go- ah, um, well, gee, that's correct, but actually, if you take out XYZ, we were actually up 54% last quarter, and that doesn't even take into account the moon!
They will all get a good laugh at how spectacular things are going, and shorts will get slapped around a bit the next day, and then the closes will start to look something like this: -.60, -1.19, -.09
This time, I am nearly maxed out (pushing my short power to the limit also with ASKJ, which was pleasantly timed a few weeks back) and holding for this post-earning IACI slide to happen.
NOTE: I WOULD NOT BE SURPRISED TO SEE IT RISE BEFORE THE ANNOUNCEMENT- I am ready to gird my loins and see 40, 41, and 42. But damnit, I've been wrong since I added to my Expe short in Sept 2001, and I will stay wrong. If I was a real day trader, I might go long until the day of earnings, and then sell that am and short before the announcement.
There won't be too much upside AFTER the announcement. All the believers are on board. I mean, BARRY DILLER managed to get CNBC types and ANALYSTS to mention his company as one of the "Four Horsemen" along with YHOO, EBAY and AMZN even though three years ago this was a weak cable channel and a home shopping network and then went out and bought .coms at premiums.
LOOK, everyone on board who's long- you guys won, I mean, you won the game, nailed the prom queen, got into Harvard and can still make it home before 2 am curfew. (Hell, Jeff did the prom queen and the whole cheerleading staff and the hot science teacher- he was long pre-Jul '01 when I got here)
But don't push it.
There are troopers on the road, and maybe, just maybe, there's more than the prom queen on your breath.
(or in Barry's case, the quarterback, but I'll leave that stuff out of this.)
Makes perfect sense. This guy is making money (along with all the other insiders) hand over fist on a daily basis by dumping stock. You think he needs to actually work anymore? Nope. He is content to sit at his computer and post on a yahoo message board all day long pumping the price higher, higher, higher, HIGHER...it's loads of fun! Wish I were you bro....
Keep earning you keep jeff...errr, Mr. Barton ;)
Lane, thanks for making your analysis witty and worth a read.
Bambi Francisco has an article out that also talks about the runup to earnings (and possible aftermath):
Essentially she argues that since other travel companies have had some weakness, IACI might as well.
Perhaps. But what that argument ignores is that online travel grew dramatically through the quarters that followed 9/11, when the overall travel market went into the toilet. Why? Was it just fakery and manipulation?
No. It was because of the dramatic shift in booking from offline to online. Travel is, worldwide, a $2-3 trillion (that's trillion with a t) annual business, according to the US Travel Industry Association. (It's about $600 billion in the US alone).
If the percent of worldwide travel that is bought online moves from, say, 5% (roughly where it is today) to 6%, that measly 1% represents another $20 billion in brand new spending being done online.
The overall total dollars being spent in the world can DECLINE and online travel can still increase enormously.
Don't believe me? Just look at EXPE's success since 9/11. It posted nine straight quarters of beating analyst earnings (yes, both GAAP *and* so-called "adjusted") earnings targets.
I'm not saying that will happen with certainty. And, as EXPE long indicated in their own 10Q's, travel is indeed seasonal, and the third and fourth quarters tend to be weaker than the first and second quarters. Points made well in Bambi Francisco's article.
But it bears mentioning that travel suppliers can certainly post overall declines in revenue and earnings and strong middlemen like IACI post increases in them... it's not a paradox, but it's not obvious. The fact that it *seems* like a paradox, and is not obvious, presented an opportunity for investors two years ago with EXPE, and might present them with an opportunity even today, if their time horizon is long enough.
<But it bears mentioning that travel suppliers can certainly post overall declines in revenue and earnings and strong middlemen like IACI post increases in them it's not a paradox, but it's not obvious>>
The statement of the opposite below in Market Watch, however, is obvious. Middlemen like IACI obtain the biggest margins on the merchant business. When business is bad, an increasing share of the business is being given to IACI's competitors. When business is good, the explanation below in Marketwatch prevails.
Currently, IACI is in a lose-lose situation. The Funds know it and have been bailing out.
"Additionally, an improving business climate in the hotel industry may not bode well for IAC. As business gets better, hotels may not be so willing to give Hotels.com(and Expedia) more inventory, or inventory at favorable prices.
"For companies like Hotels.com(and Expedia), when things get better, it would strike me intuitively, that the hotel chains would be less likely to put inventory out there," said Bobby Bowers, vice president of operations at Smith Travel Research.
<<What that argument ignores is that online travel grew dramatically through the quarters that followed 9/11.>>
<Don't believe me?. Just look at Expedia's success since 9/11.>
Why should anyone believe jeff44293 after all the outright lies and deception you have spilled on this board? You repeatedly contradicted my low earnings projections by stating that IACI is slated to earn $0.77 this year. It will be far less. Again and again, you direct attention to the past as if it were a guarantor of repitition in the future, despite the fact the travel market has turned against you.
Even on your best case "dramatic growth" scenario, IACI now has an astronomical P/E of 940 and next week it will be in quadruple digits. Fully priced? This bloated pig, pumped up only by hype from media type cons such as you, has drifted up into the ozone layer. Insiders, who have bailed out, say thank you suckers.
Further, it is highly questionable that the growth of the past will even be sustained. A good case could be made that online travel, documented to be the MOST EXPENSIVE, is doomed to decline in the future as disenchanted bargain seeking travelers find out the score.
I'm too busy to read every scap about on-line travel these days (and while I went ahead and read Bambi Fransisco's article, I don't think I'd let her bring me my drink, let alone do my analysis for me- the fact that she agrees with me is frightening.)
But my lazy analysis boils down to two things:
1. Diller cannot be that much smarter than everyone else. And any aquisition machine/holding company has eventually cratered at some point (not big players who gobble up rivals and need Justice Dept approval.)
He buys publicly traded companies with diluted shares at a premium after they have skyrocketed upward. Not a recipie for long term success.
2. Everyone is bullish. If you remember, I briefly went long from Oct 2002-Mar 2003 when everyone was doom and glooming. Once the war was ending and everyone said just wait till the war's over, the market will rally. When the Saddam statue fell, I sold and went short.
Well, longs were right and I was wrong. BUT NOW EVERYONE I HEAR IS "BACK IN"... so where do the next buyers come from once the momentum slows?
This simple analysis brought to you buy a very tired Lane, who is working ridiculous hours these days.
(Oh, wait- see Lane, your biz has picked up- so the economy IS turning around.)
Uh, never mind.