Jim Cramer Blog

When I saw Herb Greenberg and Jim Cramer talking today about how they received a subpoena from the government relating to their comments on Overstock.com, I snickered to myself. I am guilty of the same ideas. I said in a recent post that this stock is going down and I explained the CEO's complaints about alleged short-selling of their stock which is normally done by international mobsters. http://www.jimcramerblog.com/2006/02/overstock-and-mafia.html
There is absolutely no reason why these two distinguished journalists should be put in a situation where they may go to jail for voicing their opinion on a stock. They are both completely qualified, and in my opinion, they are both correct about the stock. The CEO is probably tired of pushing his idea of naked short selling and is now moving to journalists comments to explain why his stock price is in the toilet. The bottom line is, the company's loses are growing quarter over quarter and the company is in trouble.

The idea that the blackberry will get shut down for a patent infringement is completely ridiculous. If this would happen, there would be a major culture shock in the entire US. People now heavily rely on doing business via their blackberry. And, if there is a disruption in service, there will be a disruption in our economic climate. Don't think for one second that the government hasn't thought about this disruption. In fact, there was a proposal to let a certain lot of government workers to continue their blackberry service even if it gets shut down for the rest of the country. There is way too much public policy resting on this judicial opinion. I believe there will be sanctions, but there is no way this service will get shut down. As of now, it is absolutely a great buying opportunity for this stock today.

There is a short squeeze coming with Google. After their mediocre earnings, a tremendous amount of people went to the opposite side of this stock. They figured that if a stock trading at the lofty prices of Google couldn't meet or beat expectations, there is no way that it can sustain its current levels. But, I think this selling pressure is beginning to slow. Look at today, the Nasdaq is now trading down close to 25 points and Google is only down a little over $1. As soon as we see a powerful day for technology, we could see an explosion in Google's stock price because of a short squeeze. Almost every analyst that was bullish on this stock remains that way. Recently, Cramer decided to give the word to buy at $350. It could be the time to buy some Google stock.

Cramer exclaimed today that he is still bullish on Google. We happen to agree with him. He said that he likes the stock under $350. It sounds like it could be a good time to get into some option calls on this stock. Remember, they are still one of the fastest growing companies in the world. The April 430s are looking the cheapest. This stock went down $100 in the past month, it can just as easily go up $100 from here.

t was announced today that Google and Dell are in talks to strike a deal. Google would be willing to shell out $1billion over the next three years for Dell to implant Google's toolbar and software used to search the hard drive into Dell's research computer system. This is a growing trend used by computer makers to sell space to software providers. Now, the next big question. Why is Google down so sharply today? It seems to me that Google is beginning to go down the same path as Mr. Softy (Microsoft), implementing their own software into a big chunck of the computer market. Could this step be the next trend for Google? Will they evolve into the software conglomerate that Microsoft is? We all know they have the cash and the vision to do so. In addition, I've been hearing some rumors about a Google PAYPAL alternative. This completely makes sense because GOOG is in the process of coming out with a section that competes with EBAY. And, because PAYPAL is an Ebay owned company, the only logical thing to do is to give those who buy on Google the ability to pay for the item through a company owned by Google. Give me your consensus.

So, word has it, that the CEO of Overstock.com got himself into a bit of trouble with a foreign crime influence. It has to do with naked short selling a stock. A normal short sell occurs when a person who believes a stock will go down, borrows a stock from a brokerage and sells it on the open market, hoping the price will fall so they can buy it back at a lower price. The practice known as naked short selling is only done by very few illegitimate brokers who violate Securities and Exchange Commission's regulations when doing so. They allow their clients to sell a stock on the open market without any sort of liability (they don't have to borrow it from anyone). Supposedly, this is a common practice done by the Israeli and Russian mafias to make something happen their way. Now, this could be all one big coincidence because a lot of companies claim they are a victim of naked short selling. They take major offense to this practice because when you don't borrow a security before shorting it, you create artificial supply in the marketplace, causing the underlying stock to shoot down. But, Overstock has made the top of the list of naked short selling consistently over the past number of months, and the CEO has made an appoint to exclaim to the media that his stock is a victim of this practice. I am an avid follower business news, and I have never heard of a CEO claiming this. This leaves this particular problem with one of two answers. One, somehow and for some reason, the underground powers that be, put a copy of the Wall Street Journal on the wall, fired a dart at the paper, unfortunately landing the poor Overstock symbol and decided to target them. Or, the most logical conclusion, the CEO or one of the other leaders of the company somehow got in trouble with one these underground crime heads. Why? Maybe the CEO made an illegitimate pass at a Russian Don's wife. Doubtful. What if one of the heads of these organizations asked one of the leaders of Overstock to list something of enormous value that really didn't exist. Let me explain. When you list an item, no matter how expensive, on a site like Overstock or Ebay , they never ask for any kind of confirmation that the enormously expensive item ever exists. When the auction ends, the buyer goes and pays, usually through a credit card gateway like PayPal. Overstock never knows what was sold and PayPal doesn't know what was actually bought. This seems like a great way to launder money to me. Imagine a situation where bad guy A has drugs to sell, and bad guy B wants to buy. Bad guy A would go onto Overstock.com, take a false picture of an antique wardrobe, and start the biding at $10,000. Bad guy B bids that lucky $10,000 and wins the auction. Bad guy B would than pay for this non-existent wardrobe via PayPal W/ A CREDIT CARD! They have now exchanged clean money in terms of Overstock or Ebay. Now, these bad guys don't have to worry about ceilings or lakes to put their cash in. They have the ability to pay for their illegal substances via PayPal or its equivalent with a credit card and make monthly payments on their Coke. Now, back to the topic at hand. What if one of these figures came to the CEO and gave him an "enormous business opportunity" that couldn't be refused. It would be the type of situation that relates to a scenario I described above. Now, keep in mind Overstock has been plagued with increasing losses with no end in sight (They need a new business prospect to keep them afloat). The CEO probably refused because he's probably a legitimate businessman. So, these Mafia types went to the most calloused of brokers and started this practice of naked short selling. Because of this, Overstock has lost at least $4 billion in market capitalization. Would you rather lose $4 billion or get the old cement shoes.
posted by Stock Administrator at 1:06 AM 0 comments
Tuesday, February 07, 2006

GOOG and DELL In Talks
It was announced today that Google and Dell are in talks to strike a deal. Google would be willing to shell out $1billion over the next three years for Dell to implant Google's toolbar and software used to search the hard drive into Dell's research computer system. This is a growing trend used by computer makers to sell space to software providers. Now, the next big question. Why is Google down so sharply today? It seems to me that Google is beginning to go down the same path as Mr. Softy (Microsoft), implementing their own software into a big chunck of the computer market. Could this step be the next trend for Google? Will they evolve into the software conglomerate that Microsoft is? We all know they have the cash and the vision to do so. In addition, I've been hearing some rumors about a Google PAYPAL alternative. This completely makes sense because GOOG is in the process of coming out with a section that competes with EBAY. And, because PAYPAL is an Ebay owned company, the only logical thing to do is to give those who buy on Google the ability to pay for the item through a company owned by Google. Give me your consensus.

After worries of a slowdown on AAPL's main source of income (the ipod), the shares of the stock dropped 6% on double than average sales volume. The obvious explanation for this story is, of course the sales of the Ipod are slowing down. During the lifespan of any product there is a meteoric rise for an unknown number of months, which can usually be controlled by the company's internal supply and demand numbers. For example, if you create too many items too quickly the supply of the product will outpace demand. After this rise, the sales of the product start to run on a plateau, with little or no growth. I believe AAPL's Ipod is about to take on this transition. But, this doesn't mean you should shy away from the stock. The 6% drop today is probably not the end, but the end of the week should present itself as a legitimate buying opportunity. I'm in on Friday.

Google missed on earnings. That is what everyone on the street is talking about. Can this lofty stock price be justified with a company that doesn't meet analysts expectations? The answer is yes. And Google's possible inclusion to the S&P backs that side of the argument. And, if you really look deep into the Google quarterly statement, if the estimated tax rate was the actual, they would have beat profit expectations. Every day, Google announces another sector in which they have plans to penetrate i.e. WIFI announced today. These guys have a knack for being one step ahead of the game, in every game they've played. In addition, the floor of this stock has been reached and has started to settle. Buying GOOG right now will give you a stock capable of unreal growth at a major discount to where it should be trading.

At first glance, Amazon had a great holiday quarter. They earned 47 cents a share versus a consensus estimate of 21 cents. Finally, an internet stock killed estimates, right? I guess not, The stock is now down over $5 in the aftermarket. Apparently, the sales estimate was $3.08 billion and their actual sales number was $2.98 billion. This is a decelerating the revenue that can be disastrous for any internet stock because anyone associated with selling products online, is expected to have at least a reasonable growth rate. Could this major sell off be an overreaction due to the poor market conditions today? They are, after all, making more money than was expected. Where is this stock going?

It was reported that some people are pirating the $500 million man. This can have significance because Stern was a major backbone for SIRI's run-up. They are paying him this money over five years and need to get every subscriber possible to keep this company running. How do you think this pirating will affect the bottom line of Sirius and what can they do about it?

First of all we have the mighty Google, whose earnings fell completely short of almost every estimate. Than we have the State of the Union address and a changing of the guard in the Federal Reserve. This stock market has a lot of news to digest . And, as I'm looking at the Dow, it continues to rise. This rise has major significance, but can this be sustained with all of this uncertainty?

Whats in store for 2006 after Bush's State of the Union Address? Iran may have the capability to churn the world economy, whether it be with the implementation of an oil embargo or the development of nuclear weapons. Can the impact of Iran create another flat year on the U.S. stock market?

Tonight on Mad Money Cramer suggested a list of 10 stocks set to keep America rolling. It's funny how he briefing mentioned the GOOG and didn't say a word about their miserable earnings. Do you think the American manufacturer is truly coming back? Also, there has been some speculation on buying stock options on Google when the market opens in the morning. Are there any ideas on the best strike prices and month of expiration?