I still think it will be under 5 by December. Still going by the Max Pain theory. 2500 calls at the 5 strike...we should see five or below. That's just how the options have been running. However, this next reporting is going to be huge. They had their big "New" product launch in April of last year. Now all the sales of the new products are coming up for renewal. If we continue to see revs decline, I really don't know how they are going to reverse the trend. The 85 million sale will get them above 200 for a quarter (although that was not the way anyone was expecting to achieve that number). If the revenues keep falling, I don't know how that Zacks article can support the price tripling.
It seems to me that they need the cash. As I remember they did not just get $100 million right away. I believe there were conditions to the loan and there was a time period with benchmarks. Obviously the revenues have continued to fall, they will continue now that another revenue stream is gone. I wonder if daddy was about to cut off their allowance. I guess that 85 million will now give them their 200 million quarter they have been talking about. But whittling away at the revs is not helping. 85 million is a terrible deal. Should have been at least 10 more million. But I guess you can't negotiate when you are in the "beggars can't be choosers" mode.
Looks like the Max Pain theory worked again. Thousands of calls at the 7 and 8 strike price are now worthless. All the puts below 7 are gone as well. Only a handful of calls made it this month. On the December, Will those 2000 $5's be next?
Just as I said, it looks like we will finish under 7 for option expiration this week. Tons of calls about to expire worthless if this keeps moving down as well as quite a few puts. Now just looking at what appears to be a bullish call spread set up for December. However, there is a good chance we will go below 5 for all the calls to expire worthless.
Read my comment again. Flagging you for inappropriate, so you better reply soon as this last comment will be deleted.
The BLS have reported the current job openings to 5.2 million. The highest amount since they started keeping track in 2000. So, this should mean the job postings should have more revenue than any time during the past decade and a half. Unfortunately, Monster has lost to the competition. Revenues are at their lowest since 2000 when they should be the highest since 2000.
So did you combine a bullish call spread and a bearish put spread? From the looks of Max Pain, it should be below 7 by the next expiration date.
I remember they tried to sell the company at 10 bucks about three years ago to no avail. However....over 2000 calls at the $10 strike for March? That is not individual investors. Look at all the call options, biotech do not have as much call activity as Monster has. Continuous declining revs, EPS that will tank once the senior convertible notes start coming through, mysterious booking claims that are not documented...the calls are trying to say something. Either it is the shorts getting protection, or something big is going to happen soon, and it is not going to be an unexpected change in guidance to the upside.
98% of the stock is held by institutionals. They can do whatever they want with the price. For some reason they want it higher. As for the lower revs, in 2011 they had 6000 employees. Now they have 3,800. You can't have a decline of 2200 employees without revs going down.
Those expire next Friday. That is pretty hefty for the 8 dollar strike...here's a question...who would be interested in buying Monster? I know they had the "for sale" sign up in 2012 when they were looking for 10 bucks a share. These call options are crazy. Not just August, but December as well. If you look at the Max Pain theory, these are risky bets...unless someone knows something.
That can turn around and bite them at the end of the subscription. These are twelve month subscriptions. As I mentioned before, a lot of that technology was developed during the high unemployment and underemployment rates. Anything worked. So, they were giving out deals and discounts thinking that if people use the technology, they will fall in love with it and renew every year. So, they are obviously selling the technology at a deep discount which causes two problems. First, upon renewal, they are probably complain about the increase in price and ask for a continued discount. Second, if it really doesn't work and all their people are happy with Linkedin...they will probably set the software to non-renew. They are really placing a big bet on this. Those numbers you have posted show the high risk they had to take. Discounts usually mean people aren't interested enough to pay full price. I think on renewal...they just won't be interested at all.
I think the short squeeze is going on right now. for the last two years revenues have declined by 60 million per year and they are on pace to do that again this year. At the same time all their competition has been growing. They had to take out a 100 million dollar loan that will dilute the shares when the senior convertible notes sell at the agreed upon $5 share price. Right now 98% of the shares are owned by institutionals. There is a large bullish call spread that was taken out for December at the 5 and 9 strike respectively. I don't see institutionals increasing their positions, but at this point, the shorts that loaded in the 4's need to cover. Looking at the YOY numbers, they are not good enough to cause the rise in share price.
The reason I keep harping on revenues is because EPS does not matter. Keep in mind, they took out a 100 million dollar loan. They have Senior Convertible Notes that can be exercised at $5 per share. So once the notes start to convert, the EPS will fall due to the dilution. When you factor this in, you really need to have a high EPS to absorb that impact. Unfortunately with the rapid decline in revenues plus dilution in the future, the earnings are not what they need to be.
They have been averaging a decline of 60 million per year. They have all these new products as well as this new model, and they are still watching their revenues decline. The BLS has reported 5.4 million job openings, the highest since it started recording back in 2000 and still...revenues decline. With the massive turnover, commissions on the pipeline are not paid. So, you will see the cost of business go down, but the revenues go down with it. What will be the breaking point.