Will SIRI crack like WEL?

Discussion in 'Trading' started by garfangle, Jan 4, 2004.

  1. Although marketsurfer and others made a good pick with SIRI at ~2.25 and it now is nearing on 4.00 is it a candidate ripe for a fall like WEL did shortly after the Iraq War was concluded? I rarely would suggest that a stock is overvalued, but it seems incredible that it could now have a $4.1 billion market cap, when in its most recent quarter its revenues were only $4.25 million with a loss of $106.69 million. A telling figure is that just its subscriber acquisition costs (ex-marketing) are $25.89 million.

    However, its current assets are a comfortable $505.35 million, though the company has required $2.285 billion in capital to get to where it is now.

    So, is SIRI a ripe short?
  2. is to never short a stock based solely on valuation. Even if I could short this stock (what's the rule on short-selling these days -- I always thought it had to be at least $5/share with a margin account?), I wouldn't try to fight the upward momentum that it has at least in the short-term.
  3. F. d'Anconia

    F. d'Anconia Guest

    Moot point, its under $5.00 so its not shortable.
  4. JT47319


    Ah yes, the fundie-based short. Because that's what traders do. Trade off of fundamentals.
  5. wher does this come from?? this is not true. :)
  6. gaj


    stocks under $5 are most definitely shortable, IF:
    -> you do it on an uptick (for most stocks, NOT all).
    -> your broker and clearinghouse can locate shares.
    -> your broker and clearinghouse doesn't mind taking risk...

    penson and csc (?) do not allow shorting under $5...

    but others most definitely do.
  7. When I am referring to the fundamentals, I am just putting out there some variables to keep in mind, not necessarily make a specific trading decision off of.
  8. I don't think so. The intraday (60 min) price action seems to point to a high somewhat over $4.75 before it corrects. Present momentum precludes shorting. However if optionable, SIRI could offer a reverse ratio butterfly play with a small profit at worst and a very nice one at best.
  9. gaj


    yes, SIRI has options...

    (got puts this morning before the big breakdown, and shorted it twice during the day).

    unfortunately, the spread on the ITM 5s has ranged from 10-20c for nearly the entire day.
  10. it's not the leader in it's market, or even close. course, this has nothing to do with short term trading, but i'd rather be in the leader if this is a long term trade.
    #10     Jan 5, 2004