[People shorting this stock are losing alot of money]
I didn't short the stock, I bought option puts in the derivatives market (CBOE), a strategy which has a lower risk, because your losses are limited to the option contract premiums, as opposed to potentially unlimited losses on a short. The puts have not expired yet, so there is still the potential that they will have value down the road. But, as a fellow speculator put, "you could be correct about your prediction of a falling stock price, but you have to get the timing right also."
Disney is overpriced by any rational measure -- they have a P/E ratio about twice as high as the average for Dow stocks, they have huge liabilities (mostly debt), and a -negative- book value according to Barron's financial newspaper tables (-$2.83 last time I checked). Disney claims a higher book value, but bases its value largely on "intangible" assets such as what they think their brand name is worth.
So, I hope the Disney supporters enjoy this inflated stock price while it lasts. Seriously though, what would you do if Disney dropped to $70 a share (or even $60) ??
Paul McGinnis / PaulMcG @ aol.com |
