Druss,
first I do believe that a decent share of the internet companies, especially the first movers won't deflate too much from current levels. Younger companies have already in parts small profits or positive cashflows, so they might not be the targets, either.
Roughly one year ago I put out continued warnings about shorting yahoo, amzn and other (at that time) fad stocks but look for quick takes in nth-tier stocks.
When it comes to a fad like "Pokemon" then I would carefully watch whether it declines (that should be doable), and there is the risk that a Pokemon company, like KIDE comes in with a succeeding product.
The best was to find another ONSL, not an industry leader, which first spikes hard, but then deflates and never looks back.
The next best, but not widely foreseen opportunity was to short E*financials, when they all had their high-tide late January, then April.
Sometimes, I may believe that SCMR, JNPR, ARBA, NTOP, KANA, EPNY et al may trade perhaps at only 20 to 40% of their peak value. That the current red-hot sectors (wireless, infrastructure, internet software) may be old & forgotten "tomorrow" hence the stocks deflate in a sawtooth manner. Add to that lockup ending, continued insider sales and secondaries.
Maybe we are in such a time, comparable to the time late April/May, a period in which questionable IPOs have simply hit the market too pricey and some of the stocks deflated a lot quickly (HOOV, WGAT some others just pared losses (like NETP, RAMP).
Also former high %gainers like EWBX, TGLO, MKTW have more or less traded down after their IPO times and some pumps later. |
