Mr. Cuban went long Netflix under the theory of a buyout. If that happens then, sure, it is hard to argue with that bullish thesis behind the investment.
But the chart is showing signs of ending a mature bull run. And betting exclusively on a buyout in lieu of a healthy chart is often a low probability bet.
As I noted last week, this is a broken steep uptrend now, with the stock experiencing a shocking disequilibrium after earnings and increased competition.
I suspect if Netflix were going to get bought out, it already would have, like OpenTable.
Longs who are betting solely on the buyout and ignoring the damaged chart be close, but get no Cuban cigar.
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The higher they fly the deeper they fall. Question is why did the stock go so high in the first place. Can easily go below $300 Wouldn’t touch it.
It wouldn’t surprise me to see “getting Netflixed” in the Urban Dictionary one day…
No way I’d buyout with those PE and Book ratios. What would I be getting? 4 new Adam Sandler movies…
@UndeadBear – That’s hilarious! No shit.
Easy to take a big-bet flyer with several billion in one’s pocket. Cuban likes the spotlight and Netflix was a convenient prop. He has the luxury of time with his investments. Most of us don’t.