Kip,
I unfortunately do not have the funds to short any more in my particular account (one of my main holdings (as well as most lesser holding) has dropped lately narrowing what I have in margin beyond the "safety zone"). I probably will short more around the $32-33 range (I closed out 2/5 of my short position yesterday -- lucky timing, nice profit -- to raise cash) if I have enough margin for comfortable breathing.
Note that news came out yesterday, around lunchtime or so, about PTVL -- the news focused on the number of hits and the number of bookings, all looking quite good for PTVL the company. However, PTVL the company is spending a lot to get this large number of hits and it may be overextending itself.
Nonetheless, I feel that PTVL, the stock, is way overpriced no matter what scenario plays out (short of PTVL developing an anti-cancer drug or flying automobiles). If all plays out as projected, and everything goes right for PTVL, and it has a majority of the on-line bookings then I concede that PTVL stock might be fairly valued in the teens or low twenties.
However, even if PTVL holds the number one spot, I doubt if it will attract more than 20% of the online bookings -- what with all the competition and the oncoming rise of discount bookings (and online sites like PriceLine.com). In this scenario PTVL would be overvalued anywhere in the twenties or high teens (IMO).
The landscape on the internet is changing fast. I find Microsoft's Expedia easier to use than PTVL. However if one is on AOL, and is an unsophisticated user it is easier to go to PTVL.
But I don't see AOL or the search engines as the ongoing geteways to the Internet. Five years down the road, one will sit in front of the TV and be able to have an interactive conversation with many internet sites, including travel booking sites. Maybe PTVL will be a player,
maybe not. In the below case, there is software on the ISP (let's say MCI/WebTV) to handle travel booking.
User: Television on; function computer
Computer: Computer on.
User: I would like to book a hotel:
Computer: By brand or location or price or date:
User: Location and price and date
Computer: Say location
User: Close as possible to the Omaha Airport
Computer: Say price:
User: $100 to $200
Computer: Say date
User: July 1 thru 4 1998
Computer: Closest hotel to airport is Sheraton Omaha, checking availablity on July 1 thru 5. (computer connects directly to Sheraton server)
Computer: No availablity, trying Hi-life Hotel (connects directly to Hi-life Hotel server) Available. Is this okay, Lynn Smith?
User: Yes, this is fine. Please bill to my WebTV account.
Computer: Reservation made.
User: Please book a flight for July 1 thru 4. (Etc...)
In the above example, computer communicates directly to each company's server (Sheraton, American Airlines, Hertz, whatever) never needing PTVL or a search engine.
To me this scenario is more likely than the ongoing existence of search engines or sites like PTVL.
So, we may have to hold on to our short positions for a couple of years in order to see PTVL down to $10 a share, but that's a high enough return for me, especially as I do a little intraweek trading now and then as it bounces up and done between 25 and 34.
- RDH. |
