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Posted by on Sep 28, 2011 in Markets, TG Roundup

I am Naming My Own Price for Priceline.com, the Stock!

I think some uber-bulls on Netflix, the stock, don’t know what hit them. Before they could say down, the stock came down crashing from $305 to now $130, which is a $175 haircut in 6 weeks. After a long lull where all stocks went up regardless of the fundamentals, I am encouraged by the signs that fundamentals are beginning to matter in the market.

For all you know, this may be an uncalled for ‘euphoria’ on my part. If it is, or appears to you that it is, the best thing for you to do is short me, i.e. do the opposite of what I am saying here.

First and the foremost, I am short Priceline (via some puts). Therefore, my take may not be objective. If you are one of those who got benefited by the offerings through Priceline, all the power to you. However, the stock – which is currently trading at $508 – is a bloated mo-mo pig. I am hereby naming my own price for Priceline stock: $45 and I can wait six months. In a month, it would be something like $200.

Once the mo-mo guys started fleeing Priceline, the above picture will look something like this. And, it will happen in a 30-45 day period.

4 Comments

  1. Ju analysis sounds like Chinese math which I don’t believe in anyway neither should anyone 🙁

  2. This recommendation of Priceline target of $720 by an analyst at Credit Suisse is a keeper.

    Priceline Jumps; Credit Suisse Launches At Outperform
    Ju notes that the company is a “demonstrated share gainer” in the European hotel reservation market through its Booking.com site. And he sees more room for further share increases in that market. Ju also expects Priceline to gain momentum in Asia, as it “exports its playbook.” He cautions, though, that success in Asia is no slam dunk, and will require significant headcount and infrastructure investment.

    Also worth noting: Ju points out that Priceline has a higher percentage of its gross bookings and profits from hotels than other OTAs, which makes the company less subject to supply restrictions from rental car companies and airlines.

    Meanwhile, Ju also launched coverage of Expedia with a Neutral rating and $37 target; the stock closed yesterday at $26.80. You might wonder why he’s not more enthusiastic for the stock if he sees 38% upside. “The company appears to be a market performer in the U.S. and not gaining material share in Europe, and these are two of the largest travel markets,” he writes. “Although valuation and expectations remain undemanding, we prefer companies that present a higher likelihood for product development-driven share gains and margin expansion.”

    PCLN is up $23.76, or 5.3%, to $470.08; EXPE is up 52 cents, or 1.9%, to $27.32.
    Priceline shares are trading higher Tuesday after Credit Suisse analyst Stepehen Ju launched coverage of the company with an Outperform rating and $720 price target. The stock closed Monday at $446.32.

    “With the U.S. online travel market relatively saturated, Priceline more than the other online travel agencies is an international growth story,” Ju writes in a research note. “We see 20%-plus growth over the next five years.”

  3. Mohan garu
    Your market wisdom coupled with some stock tips you are getting is I believe tempting your desire to help some unassumed folks here. I’m not sure how many folks can afford to bet some $6300 per one put contract at current price on PCLN. That is like betting a farm on a risky bet where the stock has to fall by $63 just to break even before march ’12. Like you I think it can drop a lot more by then but please take this suggestion and don’t give any specific stock tips or ideas. Let’s all remember the old saying: any monkey can make money in raising bull market and any cynic can profit in gloom and doom market. However seldom anyone gets the timing right. Your candid and passionate opinions are good but please don’t give actionable ideas under a disclaimer. That’s my humble suggestion. Thnx.

    • “Your candid and passionate opinions are good but please don’t give actionable ideas under a disclaimer. ”
      Fair point. The way you articulated your opinion and the choice of your words tells me that you yourself are no novice. But at the same time, put yourself in my shoes. Actionable ideas are time sensitive. There is no doubt in my mind that Priceline stock will come down crashing. But the question is when. I REALLY DON”T know the answer to that. hence the disclaimer.

      But I do like your suggestion. No more ‘tips.’ Henceforth, all ‘tips’ will be for the registered users only. Hopefully, they know what they are doing.