Fair valuation? Well, Robert, according to short artist, Tom Hua, "no!"
And Tom's daily analysis provides for an interesting observation.
Tom's quite sure PCLN's overvalued, and to discourage us to the maximum possible extent, he never fails to point out all conceivable flaws for which he'd wish in its business plan and performance.
He further suggests that PCLN's on "life support," its stock held up by lead underwriter MWD, and co-managers BKB (BBRS), DLJ and ML (not to mention GS, who wasn't even in on the offering). (Honestly, Tom, PCLN IPO'd at what, $16? Why on earth does it need to be "supported" at $130+?) Yet, he's recently short at $131 (perhaps among other short positions), a now-losing trade.
Like so many other gadflies, pundits, technophobes and relentless seekers of "value stocks," Tom's a victim of a phenomenon discovered by legendary physicist and mathematician, Sir Isaac Newton (1642-1727), who said, "An 'overpriced' stock tends to stay 'overpriced'."
Can PCLN "grow into" its valuation? Both investors and the Street seem to think so. And then some.
BAM
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