OpenTable?s (OPEN) stock price has enjoyed outstanding performance over the past year. It has risen from a $40 stock to a solid triple-digit stock (currently $110) over the past 12 months. While I think OPEN has a great business, I believe it does not make a great investment from the long side.
Momentum is obviously in OPEN?s favor. However, at current valuations, the rubber band is stretched too far and will snap violently when it does. Aside from the well-publicized short case based on valuation that can easily be found on Seeking Alpha (I happen to agree with these valuation concerns), I am focusing on three less public, but no less important, pieces of information that make long investors nervous and short sellers smell blood.
EARNINGS SMOOTHING
Earnings smoothing is an insidious trap in which companies entangle themselves because it makes the company?s underlying business seem less volatile than it
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SUN MICROSYSTEMS STANDARD MICROSYSTEMS SRA INTERNATIONAL SPSS SPANSION
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