Reality Check

Reality Check

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March 28, 2012

Priceline Keeps Climbing

By Robert Hashemian, Vice President of Web Development


The tireless upward march of Priceline's shares has had me quite puzzled. Several times over the last few weeks I was tempted to take a short position on Priceline only to be scared away by its upward momentum. There have been a number of negative opinions on Priceline, mostly based on evaluation. Here's one from March 5 that recommended Apr 2010 $620 put options. I agreed with the premise of the author but the market hasn't and those contracts are now worth less that 10% of what they were back then.

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There are analyst predictions of Priceline's share price hitting $800 or $1,000 soon and some people even have it in a race with Apple (News - Alert) to see which one crosses $1,000 first. Of course the comparison is ludicrous. Apple's market cap dwarfs that of Priceline by 16 to 1.

The stock seems to be taking a breather now but after the furious run up, Priceline is certainly due for a considerable correction soon. When and how much? Wouldn't we all like to know?



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