Is your analysis right or wrong? As you say, only time will tell. But you add that the shorts put forth good technical arguments that the price is going down. As long as CMOZ is in a consolidation stage (= NEUTRAL), neither side has better technical arguments than the other. Whichever way the price breaks out of consolidation, that side will have the strong technical argument. Time will tell.
You referred also to CMOZ "openly stated they are working on acquisitions". ALL smaller internet companies are working on acquisitions. It's easier to buy internet businesses than to grow them from scratch. CMOZ is just more overt in their approach, that's all. My hope is that CMOZ proves itself attractive to some company in the next size tier up, perhaps a small 'portal-dot-com'. I think the fastest (best, easiest, safest, etc.) way to price appreciation is to be acquired.
Finally, you mentioned the stock's small float and the effect of a major announcement. The float is a key to the potential for a spike to a $3-$5. It happened before and there's no less potential now that it can happen again. That, by itself, is reason to stay long in CMOZ.
Consider the reward/risk ratio of this stock. Potential reward: $2-$4 above the present $1 base. Potential risk: $1 maximum! Ratio: up to 4-to-1. To me, this outweighs ANY argument for shorting CMOZ.
I'm not claiming that CMOZ is a $5 stock, even a $3 stock, on its own merits. The fundamentals have never been demonstrated to be better than shaky. Nevertheless, the small float and the trend toward buyouts in the 'wee-small' end of the internet size spectrum make CMOZ a prime-quality _speculation_. Yes, AOL is better quality, but CMOZ will probably beat AOL to the 200% finish wire in the race for internet stock price appreciation. |
