After the market closed on Tuesday, Priceline the largest US online travel agency released results for the second quarter that did not meet the streets expectations. The stock immediately sold off over $100 a share in after hours down more than 17%.
The street had forecast that the company would make over $12.70 a share for the previous accounting period, but when the company reported that the actual numbers would be between 15 to 20% less, the obnoxious Priceline negotiator got his head handed to him on a platter.
The company blamed the short fall in profits on a combination of factors. First it said that the continuing economic problems in Europe had reduced the number of bookings that the company had been getting form a region that has spurred its growth for the past several years.
Second it maintained that the strength of the US dollar continues to erode the value of its foreign accounts. That translates into much lower profit margins from one of its prime revenue streams.
In a statement released by the CFO Daniel Finnegan he cited the weak economic conditions and sovereign debt concerns as causing the passenger base in key European cities to decrease substantially in the past quarter.
As they say in golf every shot makes someone happy and in this case it is the investors that had the foresight to sell the stock short or had an option strategy that made them short the market.
Is the decline a one day affair or is this the next Net Flex or Facebook?
Is their opportunity in a market like this?
All markets represent opportunity and the decline in Priceline is no different. After investors like their wounds or count their profits, the market will come into equilibrium and new profits will be earned. That trading will leave a footprint and it will allow us to track what the market is telling us to do.
I teach my students how to take advantage of any market opportunity and Priceline will be no different. With the huge after hour move on Tuesday opportunities will abound.
My method of trading is simple and takes less than thirty minutes a day to make sure that you are ready for the market to move.
I have taught scores of students how to convert opportunity into profitable trades.
To contact one of my financial consultants, and learn how to work with me one on one, go here:
Keep those stops tight.
Todd “Bubba” Horwitz
P.S. We run the fastest growing online options community. With weekly webinars and a very energetic forum, my team and I are always looking for great risk/reward opportunities. Click on the link below and become a member of my community today.
— Todd Horwitz