of Lumacaftor to Orkamibi......this will be ugly when it opens.
I'm in....Low float, technical move that totally ignored the fundamentals of this company, which are good. This will be back into the mid $40's before the end of the week.
They're concerned, as they should be, about the avian flu having a broad effect on the fundamentals. But wait....Some boutique firm called Pivotal research upgraded the firm with a (are you ready?) $86 price target. The analyst admits he worked for the CEO of the company last year.....And they actually ALLOW these blatant conflicts of interest? Where's the SEC? Oh, that's right, they always turn the other way.
If there's a 60% chance YELP will be acquired as many said today, there's also a 40% chance it will not be acquired. And if there's no deal after exploring the market with Goldman, then YELP will trade on current fundamentals, which means it will return to $40 or so. I don't like those odds, so I'm just an innocent bystander. But if I were long at $40, and then had a profit here in the high $40 's, I'd take that money and run....the acquisition odds are not great......Just ask Altera (ALTR) shareholders.....
This may just become the short of the year.....I'm trying to wait until the shorts stop covering.....
But different this time......Today is obviously a short squeeze....what I can't figure out is given the fact they missed revenue numbers, even with the acquisition (and not much organic growth), and the bird flu problems are certainly forward looking, and yet the stock is still up almost 13%! In my experience, this kind of a candle print is almost always faded, esp. given the weak fundamentals....Maybe Monday?
Yes, as I said yesterday growth is slowing, so the market is repricing the stock. But now it has stabilized, and is trying to form an intraday base, which is why I decided to go long just now in the low $54's. There's nothing wrong with this company, and Wall street always seems to overreact to both the upside and the downside.
If you guys follow Level II, the quotes are comical. I find a lot of the quotes from the EDGX exchange are fake, that is they're thrown out there probably by the market makers. A few minutes ago there was a bid for 7,200 shares, at about $54.80 or so. As soon as it traded a bit higher, the bid disappeared. I think the MM's do this to provide liquidity, esp in the light trading in AH.
I was long this stock at $62, and should of sold at $68, but I didn't. Instead, I sold at $65, hoping to reenter in the $60 range after earnings. Here's the problem....You're not just paying for a small revenue shortfall, because that misses the point. The point is growth stocks are priced for perfection. Any sign that growth is slowing will cause a repricing of the valuation, and that's what's happening in after hours and will probably continue tomorrow. They say they raised their guidance, but the "raise" is simply in line, or just meeting the street's analyst expectations. As I said in another post, I don't know where it's headed from here, but my first guess is probably to the $49-$50 range within days.
Growth stocks, like LCI, are priced for growth. When the growth starts to slow, the market reprices the equity. Where it ends up depends on many things, including the technicals. Sorry I can't give you an accurate figure.
I'm surprised to see gold taking a beating here as well. It looks like traders are getting out of everything. I'm net short, and have been for weeks.....this looks like, feels like, and probably (finally) is the big one. And as I posted earlier, even just a 10% correction takes this to 1912, so there's a long way to go.
Enjoy the ride, because I think it's finally coming....
Next to the futures market, oil is the most manipulated trade of all. Notice all the oil and oil service stocks are also falling. The oil rally is way overextended, and now it's headed back down.