A group of huge funds hold it long to shrink the true available float (and remove any selling pressure), and then market makers move the stock up on very light volume (becuase there are no sellers), which generates a buy call for retailers through their brokers - as the retail volume moves in, market makers then dump what had bought at low volume into the retail run up. Net effect is large market moves up on light volume/cash-flow.
When this gets tired, the analysts go and give a pump with a target increase (based on the new high price) - this leads to short covering, large stock swing up and more retail movement in (and large trading profits for the analysts trading desks).
Eventually this collases when one of the funds decides to take profits (more profit for the analysts trading desks), and starts a real volume sell off ... retail gets left holding the bag, and fundiez make tons of profit. A bottom is found near fundamental levels (when value buyers step in). For Netflix - this is in the $150 range.
Then people will ask - why and how did it drop so much???
It goes up anyway. Proves the price has nothing to do with fundamentals - it is purley a float trading scam. Better off taking your money to the casino or betting on sports - you will have better control of your money.
Pig - as much as I hate facing reality on this - I agree with you that there is no way Yellin will begin to taper for a very long time. In fact - I am placing odds that she increaes the amount and will use the lack of "inflation (as least as the FED measures it)" as reason in spite of accelerating economic growth. Liberals love to destroy currency as it allows them to continue to increase spending while monetizing the debt. The FED will not stop until forced to by other countries being thrown into recession by the crashing dollar. The irony is, QE/gvt spending will end up causing another even larger recession as import prices, food and oil prices soar eliminating consumers discretionary income (note that those items are not inlcuded in "inflation").
I go with (1) YELP, (2) LNKD, (3) NFLX, (4) AMZN. YELP is by far the most overvalued with the worst value proposition (trades at a P/S high than PCLN's P/E !!!!)
YELP & LNKD should be 1, 2 with NFLX 3 and AMZN 4. .. PCLN does not deserve to be on your list. FY14 P/E is 23 on 25% EPS growth (PEG
I don;t know about that .. max pain is $220 for tomorrow, so they moved it away from that point.
It is .. mindless ... all fo the numbers for Amazon continue to trend poorly (even revenue), and are missing even my low expectations in my model. But no matter in this market.
Wow - the train that won't stop. I covered my last remaining shares at $360 thankfully, as I thought it had a better chance of $400 than $350 heading into the holidays. Actually made some money long this week .. who would have thought I would ever buy this stock.
Hold nothing now, but may initiate a short north $400 post New Years ... I don;t think there will be profit taking proir to Jan 1, as too much profit to take taxes on, but there will most likely be a big sell in Jan due to gain in 2013.
HH - that is the issue right now - AMZN is simply based on P/S, and they are falsely juicing sales on the transfer of media revs from 3P to 1P (at 7x the sales). This will continue for several more Q's and AMZN will not cite teh impact. Gives the scam a lot of runway until that comps crush it late next year.
If you follow the trend, P/S of 2.2 on next year's $91B .... = $428 stock price potential.
Fee Cash flow is $389M over the past 12 months, not $5B (they had $5B in operating cash flow less $4.6B in capex .. thus ~ $0.4B in FCF) ... AMZN currently trades at 427x FCF. We don;t need to discuss P/E, just look at multiple of FCF. Highest in S&P500. I thought Jeff was all about Free Cash Flow??? Their not good at generating that either.
Hapi - what I am most amazed about is a $33 move on just over 1% of shares. Very little money flow .. only $1.8B in money flow, yet a $16B move in the stock. This 10-1 return keeps on happening - quite a game ... put in 1% more money, get a 10% return on your entire holdings. No one is selling. Not one major shareholder willing to take profits at this level. This tells me it is going much higher prior to next earnings reports ($425)
CSFB raises price target 33% (from $330 to $439) while lowering Earnings estimates for CY13, CY14 & CY15 by 51%, 47% and 32% respectively. They model CY15 P/E to 78 to set their price (discounted to 100x in today's $)
While they were disappointed that AMZN missed CSOI estimates of $439M by 45% (came in at $267M), they were pumped about revenue and the shipping revenue increase (even though they admitted shipping costs ran well above estimates). They say they like to focus on GM$ (which has to goes up faster than revenue due to AMZN accounting for service revenue at 100% margin, all costs are in opex) - even though Opex $ go up faster than GM$ (hence why CSOI missed estimates).
So higher revs lead to more losses, earnings estimates slashed, and raise the price target 33%!
Every line of the report got more and more insane as they tried to justify a price increase while reducing every metric they track. What a scam.
someone has to sell for it to go down - ICahn is not in AMZN. This won;t drop until Capital decides to unload.
Margin down becuase of this - that is why earnings met as Rev beats
The 50d is at $301 which lines up perfectly with the Oct bottom, and the 200d is $280 which is exactly where the Aug Bottom was. Look for this to rally into earnings (by retail) for one last push with broker support, and then the institution unload post earnings to push back to $280 in the short-term, with a $248 potential beyond that to come back to reality.