Priceline.com (Nasdaq: PCLN) said that it set a single-day sales record for leisure airline tickets yesterday, selling more than 10,000 tickets in 24 hours. The new single-day record compares to an average of 1,000 tickets a day that were sold by priceline.com at the beginning of the year.
Well that is what PCLN is telling you ..
If you want to hear my version (a PCLN short) -
Last quarter, PCLN was receiving requests for more than 20,000 tickets a day. PCLN categorized more than half (greater than an average of 10,000 tickets/day) as reasonable ticket requests.
For the last few quarters, PCLN has been increasing the rate at which it is filling the requests on a % basis. How is it doing that ? PCLN is willing to sell more tickets at a loss. PCLN has also started a policy of contacting people who have made requests which were rejected previously. They are probably willing to sell them tickets at a loss.
Evidently, PCLN had a policy of trying to sell tickets at a small markup when it was private. As a public company, it has a different policy.
My point is PCLN can easily sell more than 10,000 tickets/day. Last quarter it was receiving requests at a rate of more than 20,000 - If it wants, it can sell more than 20,000 tickets/day (that is average and not on a best day). I suppose it will do it for 1 day (sometime in the future) and issue a press release.
For me, how many tickets PCLN sells/day is only 1 parameter. Without knowing the others, it is useless. What is more relevant is gross margins (and that is gross margins using my accounting methods).
If I am a PCLN long (which I am not), I would be concerned by the poor response to PCLN's press releases. The market did not respond to the 10,000 tickets PR or the other releases. Several analysts (mostly from the underwriters) are repeatedly pounding the table with reiterations of their ratings. PCLN responds by making new lows (on a closing basis).
PCLN looks like a broken stock to me. IMHO, it is headed towards previously uncharted territory.
BTW, your float # is wrong. The float is more than 15 million shares.
Regards,
Rajiv
|
