Our Stock of the Week is Overstock (OSTK). Overstock was original known as an online retailer. The CEO was controversial and did battle with short sellers that he accused of attacking the company using naked shorts. This prompted him to develop subsidiaries called Medici Ventures and tZERO that uses blockchain technology to track shorted sales. It is one of the few blockchain applications that is investable at this time.
Analysts at DA Davidson believe that the traditional eCommerce business has a valuation of $58 and the blockchain technology a valuation of $27 for a target price of $85.00. Others like notable short seller, Marc Cohodes, believe the stock can move much higher.
This morning the stock is gapping higher on news that Morgan Stanley has increased its stake in the company to 11.4% from less than 1%. This seems strong confirmation of the blockchain story.
Technically the stock made a parabolic move and then turned back sharply before finding support at both its 50-day sma and at a gap in the chart.
As always, we would not chase the open but would look for entry on pullbacks or a strong close. We would enter the stock incrementally with small buys. It is likely to be highly volatile and it trades partially in tandem with bitcoin although there is no connection there other than the blockchain technology.
This post is for educational purposes only! This is not advice or a recommendation. We do not give investment advice. Do not act on this post. Do not buy, sell or trade the stocks mentioned herein. We WILL actively trade this stock differently than discussed herein. We will sell into strength, and will buy or sell at any time for any reason. We will actively trade into any unusual activity. At the time of this post, principals, employees and affiliates of Shark Investing, Inc. and/or principals, employees and affiliates of Shark Asset Management, Inc. (“SAMI”), directly or indirectly, controlled investment and/or trading accounts containing positions in OSTK To accommodate the objectives of these investing and/or trading accounts, the trading in these shares will be contrary to and/or inconsistent with the information contained in this posting.