Memphis,TN  11/6/2012 (BasicsMedia)  —  Netflix (NASDAQ:NFLX): Video Killed the Radio Star is the most iconic reminder of the MTV days (at least for me) and I was suprised by Carl Icaan’s new hunted prey.  Netflix has been one of the most talked about business models among portfolio managers and other than Overstock.com (NASDAQ:OSTK) – Netflix was the main target for shortsellers.  This of course led to volume and volatility because when you take predatory shorts, media and a good mix of hopeful biz model petard things can get sticky.

Take the path of Netflix over the last 3 years. On January 1, 2010 Netflix was trading $50 p/s clipping along at about 1 million shares (volume) per day and had the “ship the CD” portion of the business blossoming.  It’s CEO was a – front and center – guy who went to conferences and told a great story… ultimately when you do this you draw short sellers to trade against the CEO’s ego.

Flash forward to 4th of July 2011 and shares had moved up strongly to $300 p/s in 18 mo’s !!  That was a great return for shareholders who timed it right.  Flash again… 5 mo’s to Thanksgiving 2011 and shares were back at $65..so basicly if you missed that move and did’t trade the stock on it’s initial move…you missed the meat of the stock play.

Conversely, short sellers needed to sell into that strength and those who have stayed with the short now have Carl to contend with.  Netflix has been more bluster than profit for any observing portfolio manager and stepping back and watching the Carl Icaan show is best here.  This move is over for now, and it makes sense..when was the last time you ordered Netflix or bought a Redbox CD?  This industry is moving digital. At this stage it’s about how big the database and how sticky…and  the longer term value is in the brand itself.

Overstock.com (NASDAQ:OSTK) — Glad to see Overstock.com get a rally, this is another stock which was tortured by short sellers.  I liked the CEO, he was a guest on our TV and Radio Shows a few years back and I liked his articulation of topics..an excellent orator, and I thought he ran his company well also.  Shares took off in October running from the $10’s to $16 p/s lickity split.  This is also a good look now as torturing shorts seem to have exited.

Overstock.com, Inc., together with its subsidiaries, operates as an online retailer offering discount brand name, non-brand name, and closeout merchandise in the United States and internationally. The company’s merchandise include bed-and-bath goods, furniture, home decor, kitchenware, watches and jewelry, shoes, electronics and computers, sporting goods, apparel, designer accessories, home and garden products, media, music, luggage, health and beauty products, baby products, crafts and sewing products, office products, gifts and flowers, toys and hobbies, and pet products.

 

Disclaimer:  We have no position in any stock mentioned here.

DISCLAIMER: This content is neither an offer nor recommendation to buy or sell any security. We hold no investment licenses and are thus neither licensed nor qualified to provide investment advice. The content in this report or email is not provided to any individual with a view toward their individual circumstances. While all information is believed to be reliable, it is not guaranteed by us to be accurate. Individuals should assume that all information contained in our newsletter is not trustworthy unless verified by their own independent research. Also, because events and circumstances frequently do not occur as expected, there will likely be differences between the any predictions and actual results. Always consult a real licensed investment professional before making any investment decision. Be extremely careful, investing in securities carries a high degree of risk; you may likely lose some or all of the investment.