Tuesday, May 22, 2007

Overstock.com Inc (OSTK) looking primed for a squeeze!

Overstock.com, Inc (OSTK) is a controversial company, just ask Herb Greenburg. Largely due to management issues (ability to execute their business plan and questeions about the competence of their CEO) the stock has attracted and maintained a large short position. The fundamental guys may be right, but it looks like the tide is turning for the stock and buyers appear close to dominating the action once again, particularly if the stock can trade above $20.00. Volume has been low over the last month but is picking up again with some buying over the last week. The adage "don't short a dull market" applies to individual issues as well as the market and the days to cover now stands at just under 25 days. If there is a dramatic change when the May numbers are released in the morning I will post an update. I'm going to buy some of this one and maybe take some September 20 calls at about $1.50.

Here's a description of the fundamental nonsense from Google Finance.

Overstock.com, Inc. is an online closeout retailer offering discount brand name merchandise, including bed-and-bath goods, home decor, kitchenware, watches, jewelry, electronics and computers, sporting goods, apparel, designer accessories and travel services, among other products. The Company also sells books, magazines, compact discs (CDs), digital versatile discs (DVDs), videocassettes and video games (BMMG), and it operates as part of its Website an online auction site, which is a marketplace for the buying and selling of goods and services. The Company offers approximately 36,000 products under multiple shopping tabs on its main Website, plus almost 500,000 media products on its BMMG tab. The Company’s shopping business includes both a direct business and a fulfillment partner business. Products from its direct segment and fulfillment partner segment are available to both consumers and businesses through its Wholesale bulk purchase program.