I hear you S. M. SAIFEE. Ya place yer bets and ya collect yer reward.
One interesting note about the COMS, CPQ and QWST you mention.
As a proportion of insider sales/buys to float and outstanding shares - NITE is in a class by itself compared to them. There has really been 0 shares bought this year by insiders. Not one. But sells?? Take a look at COMS, which has a float of 327 million shares - but shares sold/planned sale as % of that? Fraction of NITE. CPQ actually has some buys, especially recently.
Wonder why no insiders seem anxious to pick up this bargain - and yes, I know all about diversification blah, blah, blah - funny that CPQ guys are buying, what about diversification there? C'mon, can't buy 1 share? Not 1? LOL! After the stock is off over 70% from its high?
quicken.excite.com
I have to go to some real dogs to find worse performance. People laugh about AMZN, talk about how it's "collapsed", how it has no earnings - well, you'd have been better off buying AMZN at it's high (off a bit over 25%), than this baby at even $60 - earnings be damned. At least Bezos always has something in his back pocket to pull out when the price is under assault. This doesn't mean one shouldn't short AMZN - I've done that; but since last year, I've had this trick with AMZN - buy when it declines dramatically, exactly because of Bezos. I know he needs the price to be pumped up, because that's how AMZN's business model works - if he can't float the company on shares (debt offerings etc.) - he dies. So every time the price is under assault, he comes through with some hype like "videos" , or "gifts", or "electronics", or "toys" or "pharmacy", or "auction", or "merchants" etc. And up the price goes! So, I buy the more extreme dips, on the sure knowledge that Bezos will bring it back up. Then of course, it is time to cash out, and short, as reality of AMZN sales/profits obtrudes. Then repeat the cycle. But to do this, you need to have a cooperative CEO who is in your corner. Just compare Bezos attitude to shareholders (look at insider sales by Bezos), his ability to defend the stock, vs KP's attitude of "bend over and grab your ankles" (oh how well we remember IR saying "no press release is warranted"). Guess it shows in the share price.
We can argue till the cows come home about how rational/irrational the market is. The point is, you have to open your eyes and look around. This market has been defined by momentum the last few years. AMZN type stuff worked beautifully. One day, fundamental valuation will prevail - and "value" issues may do great while...
Doesn't matter - you live in the here and now. You should adjust to the *current* environment. If it changes, you change. The market is like the weather - if it is pouring rain outside, it makes little sense to come out in short sleeves and argue "but sunny weather is standard in Acapulco!" - you'll get drenched. When the sunny weather returns, THEN come out in short sleeves. In the *current* environment, NITE has been a dog - and fundamentals don't matter a whit. Only an extraordinary CEO who knows how to protect his shareholders is able to do well in shine or rain. KP is not that man.
To me, the straw that broke the camel's back was the secret, unannounced cancellation of the share buyback program. The symbolizm of it (*not* the issue of advisability of such a cancellation) and the way it was done spoke volumes. That is when I announced on this board - I am going to fall on this stock like a ton of bricks - I will short it on every weakness, because I know the stock is defenceless. I have done this, and I have had no fear - knowing I'm not dealing with Bezos (I am nervous every time I short AMZN!), but with KP. When NITE ran up to 40 some weeks ago, I sent PMs to several people, and told them I'm selling my sister's crutches and shorting the bejesus out of this (KP soon came with an assist - the MER deal is what drove the stock up, and KP soon deflated it with his comments at the time "not to read too much into it" - thanks Kenny!).
The game of shorting has been simple - when the stock runs up, short, but cover before the day is over. Why cover? because you want to re-short it the following day when it goes up (usually in the morning). This was pretty mechanical... NITE up? Goody, SHORT. Then pour some coffee and cover toward the end of the day. Repeat process.
Now the earnings are out. The stock should be bottoming. The easy shorting money has been made. All good things have to come to an end, and this too. But is this good news? Only if NITE stages an equally impressive rise up, that is SUSTAINABLE. My bet is that it will not. Yes, it will rise, but slowly, grindingly, painfully.
I can understand why you are long. NITE business model is not a bad one. NITE's prospects are good. But personally, I will only trade, never invest in it.
Good luck!
Morgan |
