- OT -
Rick, your question calls for a lengthy discussion that could turn out to be several different, parallel conversations. I'll try to keep my part short.
"Please tell me why anyone would want this stock at this price. (in rational terms - not hype)"
I don't think that anyone here would ever accuse me of hyping this or any other stock, but your request is well taken. Personally, I feel that the majority of the 'net sector is irrational. Despite all that one could say about untold possibilities, new horizons, and as-yet unimagined uses of the 'net that will revolutionize our lives over the next ten years (which I happen to believe), the financial goings on at this time can only be described, in my eyes, as either irrational, or more likely, as a series of calculated gambles which are much riskier than usual, that at some point investors can come out of, unscathed, prior to the inevitable shakeout. Where many of the stocks in this sector are concerned, it's a game of chicken, in other words, straight out of the movie Rebel Without a Cause.
The irrationality I see includes all of the principals involved in the game: a majority of active investors, by this time; the traders; the brokers; and perhaps special mention should be made about the PR Folks and the press, which includes stock boards and web sites. And the companies themselves who have learned to expect irrational gains, with set defaults to some rather dubious exit strategies, from an industrial purist's perspective.
These exit strategies, themselves, are a monumental series of crap shoots which are dependent on the persistence of the very irrationality I'm referring to, thus upping the ante in the chickie game, which supports the cloud. There are a lot of feedback loop dynamics working here.
There is an overall (almost pharmacologically induced-like) euphoria which has thus far refused to go away. It will eventually form droplets, and yield to outright heavy precipitation at some point, IMO. That will be the time of the shakeout. Some will remain standing in the rain, and ATHM will be one of them when the Sun comes out again. But even so, water has a way of shrinking paper when the Sun beats down on it. This is not my zone of expertise, I am not a financial seer. These are the personal views of a telecommunications consultant and industry watcher, for what they are worth.
Frank Coluccio |
