Thursday, April 17, 2008

GOOLEICIOUS, bye bye...

GOOGLE rules the world!!! Ka-chingo for GOOGLE!' Whateva. ALMOST (ah, like hindsight, always 20/20!) called the $450 GOOG options straddle. Ah, the ones that get away!!! No biggie, though, only a triple plus. I really had zero opinion on GOOG #s. If you put a gun to my head I'd have said long, just cause right now everything going up even when they miss on the notion that we're at a bottom. Maybe, maybe, though I don't buy it. But, meanwhile we got nice big option moves on GS, MA, CMP, MELI and such. VERY nice, Waxie LOVE Options Expiration week! Only regret was selling a bit too soon cause GOOG looks to carry us higher into tomorrows close it appears. I've been saying we could get to a new High of Year shortly and we just may. The joy of trading is you can be bearish and yet still make money from the long side on a day to day basis! Or, even a week to week basis. So, how can YOU profit from GOOG without owning it? Well, I'm going to post some commentary now for you guys. This is the type of stuff we do for our clients day in and day out. We have been KICKING butt and we are going to be offering a FREE TRIAL for ya shortly so you can see for yourself why we are THE BEST, period! I would buy YHOO here. I'm not going to go into it for the hour I usually would, but I'll give you the basics and you can make your own decisions. I think YHOO is a pretty nice long play here, I think its only real downside appears to be if MSFT backs off its offer. I do not see that happening. It could, but I think its unlikely and GOOG is the reason. Here goes;YHOO and GOOG are forming a partnership to fend off MSFT offer of $31 a share for YHOO,which YHOO rejected out of hand. I'm sure you know this.

With GOOG #s today it reaffirms jerry yang's contention that MSFT offered way too little for YHOO at $31 a share.

MSFT when they made the offer got HAMMERED, destroyed and MSFT shareholders have been up in arms.

GOOG's #s does several things -

#1)Reinforces the bull case on online advertising
#2)Justifies MSFT offer for YHOO for both itself and it's shareholders, and the need for MSFT to do something or be crushed in the online ad arena. Also, you probably know this, but GOOG is releasing several initiatives that will directly compete with MSFT, including by all indications its own computer platform to compete with Windows.

There's more, but I have to leave, so suffice to say I think there is zero chance now #1 - the deal gets done between YHOO and MSFT
#2 - it gets done at a minimum of $35 a share in cash

There is just no chance that MSFT can not afford NOT to do the YHOO deal. GOOG literally is putting MSFT long term prospects at risk if they don't in my opinion.

There are several ways to play this, but the "safest" would be to buy YHOO shares and then hedge with the $25 puts, or the $20s if you want to have more share risk. The only question is when a deal gets done.

GOOG is $527 a share after hours. They will potentially go to $550 by tomorrow. I wish I bought some calls, but obviously didn't. Regardless, I think there is a very good opportunity on YHOO here long.

Further still, YHOO reports earnings next week I believe. There is virtually ZERO shot they do not blow out. ZERO. yang is not going to miss, that's absurd. They should blow out, further justifying a deal to MSFT, MSFT shareholders.

MSFT shares should also get a near term lift. I would be a buyer tomorrow at the open depending on where it opens for the same reasons. The stock sold off about 12% since they made the YHOO play.

Also, MSFT had admitted offering YHOO $40 a share in Dec. So, I think it is possible that the # is closer to $40 than $35. I think YHOO is a good buy here for the reasons stated above. We'll see soon enough, but I think if you play it right you should make a nice score without too much risk. See ya tomorrow, folks, see ya tomorro! RULE!


AP said...


Just beginning to trade. Read your green book. It's grea! Working on the second one. Quick question if you don't mind. I bet I will be on the other side, I just need to raise my portfolio a little bit. It's still less than 2K. In the case with GOOG today (4/17) when price goes up big time after the bell and you don't hold the position because you don't know if the news going to be good or bad, would you recommend to try to catch the ride first thing in the morning 9:30 even if it opens at 500s or so. Is that Gap up technique?

fire up your rear said...

cnbc has brought in so many retards into the market and all the 20 year olds are learning how to read charts. brokers are no longer advertising about retirement, but trading.
before you know it, any high school students and their mom will be able to spot a head and shoulders.

frickin ridiculous

Waxie said...

ap - I don't like to chase stocks. There's an old adage, if you missed the wedding you don't want to show up at the divorce. Something like that.

Fire up your rear -
Yes, thats true, but if you look through any 10K on GS, MER, LEH, etc. for years you'd see how they made much of their money = trading.

They recommend you buy and they sell. Etc. Trading levels the playing field. Investing is short term now, and it should be IMHO.

I'm bald so I don't need Head and Shoulders

tomcat said...

Speaking of GOOG & the tech sector, I like AAPL on the daily/monthly, chart cup & handle, next level res. 171 area, I called it back on 3/18 @124 too.
What do you think of the probability now, of $170 ?

Waxie said...

tomcat, $170 pretty safe on AAPL into earnings. We'll see, but hard to imagine that they not gonna buy stuff into earnings until proven wrong, so anything momentum based is buyable on pullins into earnings until it's wrong. BIDU and MA are on top of my list of trades as well.