a stock that took off

Discussion in 'Trading' started by dg2000, Aug 16, 2001.

  1. dg2000


    Hello everyone,

    I came across a stock with a great chart since the beginning of the year. The symbol is MOVI. I've been trying to figure out what exactly happened to make the stock take off either fundamentally or technically. The move started around 1/5/01. The following news also came out about that same time:


    I'm just wondering if anyone here has any ideas..

  2. ktm


    I've been building a fundamental short position in MOVI since the mid 20's. The CEO has been convicted of a number of stock fraud and manipulation related activities. The company is like a mini-blockbuster (movie and DVD rental) chain. I'm not sure why it's going up, but I'm pretty confident it's going down before long.

    You are right, the chart is amazing.
  3. roger2


    I have been watching MOVI also.

    I haven't entered long because, having 'grown-up' in a bear market, the idea of expecting and/or hoping for a stock to go up is foreign to me! It still amazes me when I see a chart like MOVI. HLYW is also a video rental chain and has a similar chart.

    ktm, that's some interesting research you refer to... When did this CEO get into trouble?

    Good luck with that short position. When it starts to turn I may jump in there with you on the short side...

    Here are stories about the video stores (BBI, HLYW, MOVI) and why they are moving:


  4. ktm



    A few close friends of mine are trading the stock pretty heavily and they told me about it. I'm not sure about the details but they said he did have a few "convictions or SEC fines" and was still on the SEC's list for some past indiscretions involving his company stock. It may have been for pegging now that I think about it. The fundamental numbers for MOVI started to look ridiculous (given the business prospects and industry) back in the teens. I feel bad fighting the tape here but it is a bubble. The same guy shorted AMZN from 90 up to 380...his pockets weren't deep enough to hang on. Right idea, wrong time. They are playing long on MOVI waiting for it to turn as well.

    Good Luck
  5. I have been asking everyone I know about it too. If you look at the fundamentals, they really look like ass. I then figured that it was a short squeeze, but only 6% of the float is short interest. Someone has to be buying it (it sure ain't me). Sometimes, there's just no rationalle for something that's happening in the market. I wouldn't look to put it out though til it's started to roll over.
  6. dg2000, et al,
    MOVI will come down, as KKD, ROOM, TARO, SFCC, and many other bubble stocks have with ridiculously high valuations.

    One other stock I'm looking to short is SLVN trading at 89 P/E. Many peers in the education sector like APOL, CECO, COCO, TUTR, RLRN have fallen off their heights despite the fact that they are still way overvalued. SLVN might still have some steam left, but not for long. Once the technicals start to deteriorate, I'll be in.


  7. ktm


    MOVI busted thru over the last few days. I had averaged up to 31 on my short position and I'm looking for low 20's to cover, although I'll be trailing a stop now. Apparently, there was a negative report about video rentals and the whole sector was down.

    Did you guys get short?
  8. roger2


    no, I couldn't because my funds are tied up right now

    but i'm really glad that thing finally broke down for you! that must have been an agonizing wait....

    do you think it will go low 20's ?

    i heard something about positve comments in a Barron's article regarding VOD and that it will hurt the movie rental chains

    as a follow-up, at Briefing.com, Fahnestock & Co. says that the VOD threat is actually pretty far off, 5 yrs minimum. and SG Cowan also came out in defense (of BBI)

    But maybe there will be a profit taking momentum that will continue to drive down BBI, MOVI, et. al.? I don't know...

    How do you figure it, ktm?
  9. ktm


    Fahnestock has a history of hyping stock then moving them a good deal. I wouldn't want to bet against them but I'd first have to check to see if they are actually putting money behind this. I know someone who trades behind them on the biotechs. They could be hyping it so they can sell into the rally...that never happens ;)

    I expect there will some bouncing around as those diehard mo-mo's don't want to believe it will go down. Let's put it this way, I'd like to hold down to the low 20's but I have a stop in now that will ensure a profit. It was interesting that when the market rallied Friday...that MOVI started peeling off. I have found that the (fundamentally) BS stocks that are very strong tend to break down when the broader market rallies.

    I'm just glad it turned when it did. If it had broke 40, I would have likely covered.