<..Steve, management's credibility is badly damaged with WS. People don't trust the company anymore...>
Tom, I talk regularly to other buy guys and the sell analysts. I completely disagree that credibility is damaged. In fact, my getting in yesterday ahead of DPH's conference call today was largely a result of talking to these guys about FMKT's prospects near term. Needless to say, things are looking bright right now, and going forward.
<..As for the lawsuits, I'm not a lawyer to judge their merit. One
thing is for sure, FMKT will spend a lot of time and money in court...>
The suits were filed as a result of the Jan 4th announced anticipated loss of GM's business to CMRC. This was always a possibility as specifically disclaimered in the prospectus. And even so, at 5% of revenues, this was NOT a big deal. But the traders shot first, and now that the smoke is clearing, new clients announced (with more to come), and an anticipation of even stronger revenue growth and smaller losses than originally expected, the street is coming back strong.
<...The outcome could be a settlement, eating away half of its IPO proceeds...>
Seriously, there really seems nothing to settle Tom. In addition, the lawsuits themselves will fade away as the stock price approaches and exceeds it's previous high.
I know you went short today, and for full disclosure, I am long (averaged at ~$175 - excluding a small IPO allocation). But honestly, if I felt that your argument had merit, OR if I thought today's upward momentum might shift (regardless of fundamentals as I see them), then I would take my profits and move on. FWIW, I did sell ~25% of my FMKT today to move into another name that I think has a decent shot at being up 50-100% near term. But I have good reason to be believe FMKT will have some significant announcements near term and a very strong earnings conference call, and do expect to see the stock back into the 300s soon. And as shorts cover, this could see high 300s in that time frame.
IMO, you might make a few $$ if the stock pulls back in the AM, but I can tell you that mgmt is getting in front of the street with their optimism currently and going forward, and the street is and will be buying.
Good luck
Steve |
