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Wednesday, January 11, 2006

Interesting analysis on shorted Internet stocks at Burnham's Beat

This post at Bill Burnham's blog is interesting. He analyzes the "Top 5" shorted Internet stocks. The first on his list, Overstock (OSTK), always makes me laugh. I'm not involved with this stock, but it smells like a loser to me. Their CEO, Patrick Byrne, seems unstable and may be delusional. His company is nothing more than a third-rate Amazon but yet his hype is pure Google. I'm with the shorts on this one.
I know a little bit about the "#4" stock as well - Digital River (DRIV). DigRiv is a provider of e-commerce hosting solutions. They had great growth over the preceding few years due to the explosion of ecommerce, but it appears the shorts are very skeptical of the future. I think much of their doubt centers around the fact that Symantec is one of their biggest customers. DigRiv hosts Symantec's online store and shorts are betting that Symantec's consumer anti-virus business is going to be decimated by Microsoft's free AV. I think there may be a higher probability that Microsoft's security initiative falls short and consumers' will continue to turn to third-party vendors.
If anyone has more insight regarding DigRiv, I'm all ears. And unlike Jeff Matthews, I'll keep your posts on my comment boards. Hell, I don't have time to delete all the spam comments, much less legitimate ones!


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