Aug60 puts @ 1.55
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Joined Jan 27, 2008
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Ragin,
I like CRM a lot as well.
In fact, I’m taking this into earnings, which I rarely do. The risk-reward is simply too big to ignore. This trade reminds me a lot of VMW before the fall. I think we see $50 by mid August.
Thnx for the heads-up and rock-on in The Big Easy.
-Phil
Ragin where would you place your stop? 70?
I will let my puts expire worthless before I let CRM beat me again.
I’m definitely not that ballsy.
CRM is a tough one to beat.
I went thru some 13F’s this weekend. Basically, the who’s-who of Wall Street holds this stock — in size. And guess what? The top shareholders haven’t sold a single share in the last 2 quarters. This can be good or bad. From what I’ve gleaned on the Internets, it seems the big boys are betting on a takeover at some point by the likes of Oracle (likeliest suitor, as per press reports) or Microsoft.
My personal view, for whatever it’s worth, is that it just won’t happen. Based on Larry Elison’s nickle-and-diming saga with BEA Systems, and Oracle’s penchant for buying reasonably-valued to cheap software company’s, I just don’t see an offer (much less one that carries a 30% premium) for a firm trading at 300x earnings.
Moreover, Salesforce.com and Oracle are the two big fish in the enterprise software market. So, anti-trust hurdles would loom large. As for Microsoft, Steve Balmer and co. are just too tangled with Yahoo (which they are also nickle-and-diming over valuation) to go out on a limb for Salesforce.com.
The key here, in the near-term, I believe, to start cracking this stock, is AAPL earnings. You see, CRM and ORCL are responsible for most of the applications that go into the new 3G phone. If AAPL gets rocked after earnings, the enterpise software space will inevitably start to slip. Note that both ORCL and CRM survived the MSFT and GOOG earnings debacles relatively unscathed. AAPL, not the internets, is the make-or-break for these stocks in terms of price action.
Call this a gut feeling: but I think regardless of what AAPL reports, they will sell-off. That’s my bet on CRM (ahead of AAPL).
And, based on 13F’s, if so much as one of those big boys decides to start unwinding, CRM could be under pressure.
The first move should take the stock into the mid-60s.
Earnings in August, a la VMW, should be the kiss of death for an extra push into the 50s.
-Phil
Great analysis Phil, thank you. I’ve been waiting for months to see if CRM will crack.
Took the plunge, did you. I started selling about noon friday. It wouldn’t crack. Another pump to help out the put writers who hold the stock up. Although PHil wrote a great analysis, I would like to add a point he missed. Die, you fucking filthy pig, just die already.
OH yes, don’t forget to pick up a couple of cottonmouths for the snake fry, on your way back from the big city.
Calvino,
Shorted some at 70-even on Friday. I too was perplexed with the resilience of the stock in the face of a melt-down in the internets — though, on opex, the 70-pin should’ve been expected.
Still holding,though. I’m anticipating a potential extra-dose of pain on Monday — an exhaustion move on this stock, whereby the big boys run the stock up a 1pt to 1pt-and-a-half in the morning to shake some more people out. I’d rather not see this happen, but I’m not discounting it.
If we do get the morning pop, I will wait for a reversal and short a bit more through the morning lows. Then, I will watch it over the course of the week. The potential Monday-morning-high price point, I anticipate, would be a line in the sand of sorts and would serve as a mental stop for the rest of the week’s activity.
We’ll see…
-Phil
Phil from Brazil .. are you anywhere near Barra dos San Miguel?
Hehe, I’m actually from Rio de Janeiro (neighborhood: Leblon). But currently reside in NYC.
I like Brazil, the Nordeste especially. If they only had nutrias there, I would move.
Nutrias? Confess I had to google that one. Sounds like you like rats. Plenty here in the Big Apple.
The Nordeste is cool for the anything-goes Carnaval antics. The random chick-grabbing situations on the streets during that blessed week are worth the trip alone. And then you have the axé bands too… Good times.
Nutrias are a very special animal, much beloved of many residents of Louisiana bayous. Cajun is being shy.
Calvin, are you from N’Awlins as well? Or Bayou Bengal country?
__
I spent a little time in Lousy Anna in the employ of Chevron.
I could never stay there long. The debauchery of the French quarter was just too much for me.
LBO firm I worked for owned some properties in Lucy Anna. North, where Delta Air was birthed.