April 07: Week 2 - Vonage again, Sourcefire (FIRE) with Beavis & Butthead, Van Halen & YHOO!, and gamble with Ballys (BFT)


Monday - April 9th, 2007

Again with the Vonage?
After a federal judge ruled Friday that Vonage (VG) cannot service new customers while it appeals a finding that it infringed Verizon Communications Inc. (VZ), their stock is only down 10%. Shares of Vonage are trading just pennies above their 52-week low...again. I know we've beat this dead horse to death 20 times but Conspiracy Theory or not, place your bets on Vonage. With shares not hitting a new 52-week low today and close to 5 million shares trading hands - there is still money to be made playing Vonage.
Of course Vonage is saying it will win the appeal and they plan to hold a conference call for investors on Thursday.
Here's what we think CEO Jeff Citron will say:
"Please don't cancel your service, we need the money. Everything is fine, VoIP is the future, and things have never been better. Please buy our stock, we really need the money and don't listen to what Wall Street is saying, they're wrong. Until the big phone companies give up trying to kill my company, I will live in a box suspended by a crane. Unlike David Blaine's stunt, I will live in the box until Vonage wins the appeal. Of course I will use Vonage's VoIP technology to communicate with the outside world from the box, but I will not give up my cause."
Expect a huge surge in VG stock following the press release, boxes are the way to go. Read more about Vonage because it's fun at TradingMarkets.

Sourcefire Inc. (FIRE) hits a new 52-week low after the Network Security company IPO'd back in March 07. Sourcefire's shares are down 27% today and trading around $12.50 after they forecasted a Q1 net loss of $2.2M to $2.6M on revenue of $10.1M to $10.5M.
Just a few months ago Sourcefire (with $39M in accumulated deficit) went public valued at 7.5 times revenue. Shares of FIRE have traded up to $18.83 during the past few months, but today it's going down in flames. The company is built around SNORT® - its open source intrusion prevention and detection technology. Why they didn't go with a Beavis and Butthead logo is beyond me, why choose a pig when your ticker is FIRE?!! Come on, Beavis would love it. It's early in the game for Sourcefire, and now that the stock has dropped, it may be worth watching. SNORT has had 3,000,000 downloads, which is almost how many times Beavis and Butthead have downloaded pictures of Britney Spears. Think FIRE is worth investing in? Let's give it a few months, but by all means, place your bets gentlemen. The only thing Sourcefire's management is worrying about today is T.P. for their bunghole, right Beavis?

Tuesday - April 10th, 2007

Check out Yahoo! (YHOO) today, they will now be the exclusive provider of search ads at MTV.com, Nickelodeon.com and other sites run by Viacom Inc. (VIA-B). The deal initially covers 33 Viacom sites, which also include VH1.com, ComedyCentral.com and BET.com, and has the potential to expand to more than 140 others provided they don't screw it up and Viacom calls their pals Google (GOOG) to fix the mess.
The ads will be powered by Yahoo's newly launched search marketing system, known as Panama. Which as you know was a killer Van Halen tune, relive the memories via YouTube friends.
Quite the week already for Yahoo! when yesterday they announced the SanDisk (SNDK) Sansa Connect – a new Wi-Fi-enabled portable MP3 player. Of course the Sansa is loaded with Yahoo services such as Yahoo Messenger, Yahoo Music and Flickr.
YHOO shares have been moving up steady since October 06 with a nice 30% positive return. Finally YHOO shares are trading in the low $30's after being punished by Google and other competitors for the past few years. So, with all the good news, we'll just wait for all the analysts to get on board and watch the upgrades come in.
The Masters consider shares of YHOO expensive, trading with a P/E of 61, but we must all keep in mind they are a search/internet company. None the less, it sure feels like the good news is already baked in the current share price. If they can keep the momentum and come away clean on the upcoming conference call on April 17th, YHOO could see a new 52-week high. It's looking better for YHOO and you may recall Cramer talking up their stock for the past year now. It's game time for Yahoo! next week and if they can pull it off, it's big money baby. Otherwise they'll be trying to put the band back together like Van Halen, how can Eddie and David not get along to just make some cash? Van Hagar or Van Halen, hate to say it but these days the only one that still has it is Sammy, the dude rocks.

Sony struggling gone are the days of the Walkman
Sony (SNE) has posted some modest gains recently since releasing news that they are slashing prices on their PSP. Why investors interpreted that as a good thing, we don't know. Say Hasta La Vista to your margins, Sony. Trouble is brewing, the PS3 & PSP aren't selling. The next couple of earnings calls should be very interesting indeed. Gone are the days when the Sony tape-playing Walkman ruled the world. Remember skateboarding or just being cool with your head phones on listening to great tapes like 1984, The Joshua Tree, Violent Femmes, or Straight Outta Compton. Read more about how Sony sucks...

Fewer Teens are stealing Music - Napster making a comeback
Check out Napster (NAPS) today, up a few cents on news that "Fewer Teens are stealing Music". Lars from Metallica, you can finally sleep at night. Still, 64 percent of teenage Americans said they prefer to get their music for free from peer-to-peer file sharing services like Kazaa, Morpheus and Limewire. Read more how Stealing music is fun...

Wednesday - April 11th, 2007

Well Masters, we are sorry to say Henley Frey has left us for more "sacred ground", that being said we have to at least promote his latest adventure in honor of all his great contributions at TheStockMasters. Henley is now running InvestorGods.com and as you might expect, it's not for 10 year-olds but is damn funny and done in true Henley spirit. May the Gods be with you Henley. You will be missed.

What comes up, must go down. Dendreon (DNDN) is crashing from it's sugar high, falling 14% today. Let's be reasonable, it all comes down to the FDA's May 15th decision. So if you are buying shares today, please stop. If you want to play this biotech pipe-dream, then buy/short/long the stock on May 14th, or possibly May 13th. We wouldn't be surprised if they stop trading DNDN shares a day before the meeting due to all the hype and anticipated volume. Today an analyst at JMP Securities said shares have reached their fair asking price and downgraded the stock to "market outperform" from "strong buy."

Suncor Energy (SU) has quietly moved up 13% since March 20th. This is one stock that we can't pimp enough and as we said back in September, it's a great play on oil stocks and a solid investment.
Credit Suisse maintains their "outperform" rating on Suncor and raised its' target price to C$110 a share. The Suncor Energy Foundation announced recently its largest investment ever made in Ontario - $1,050,000 over three years to launch the Suncor Sustainability Centre at Lambton College in Sarnia. So feel good about investing in oil and make money, beautiful.
Gasoline prices are going up today and crude oil prices seesawed, after the U.S. government reported a steeper-than-expected decline in gasoline inventories. Go Oil.

 Thursday - April 12th, 2007

Ah the drama of Phoenix Footwear (PXG) - today shares are up 7% and just 80 cents away from the 52-week low. Yesterday they announced a new Vice President of Sales of the Company's Trotters and SoftWalk divisions, Mr. Michael Crosno.
Crosno has almost 30 years of sales management experience in the footwear industry which is only second to that of Al Bundy. I think if PXG was to hire Al they might have a better chance of lifting the stock price which has been punished in recent months. Al had some great ideas in his day including inventing shoe lights and even hosted a shoe advice line called Dr. Shoe: 555-SHOE. What would Al say after being hired by executives Riedman and Wolf?
"People who work putting shoes on fat women who wear dresses should not have 20/20 vision." ~ Al Bundy.
PXE Officer Reddy S. picked up 3,000 shares on April 5th, other than that - he's the only PXG Exec to throw down on the discounted stock price. So if it's trading at a discount, why don't the other guys start buying?

Check out the Vonage (VG) today, up 9%. Jeffrey A. Citron, the 30-something-year-old founder is back in the CEO chair, temporarily at least, following the sudden resignation of Michael Snyder. "Sudden resignation" - The dude was fired or perhaps one of the Soprano's paid him a visit late last night.
Citron owns about 30% of the company and he's been losing money fast these past few weeks. Got money to burn? Vonage is your play.

  Friday - April 13h, 2007

Bally Total Fitness Holding Corp. (NYSE: BFT), now here is a stock we have made fun of, time and time again. We told you to stay away back when shares were above $2, today they are under $1 but up almost 9%. But it's easy to make fun of Bally's when you can tie Steven Seagal into it, that guy is just asking for it. Eat another doughnut Seagal, better yet go play your guitar.

Joking aside, now that Bally's has bounced from its 52-week low and trading around 72 cents, it's time for a look. They are subject to delisting if they don't get back to a market cap of $75M, right now they are at $25M, so the price needs to go up to at least $1.80 a share. They just had some good news come out today about not paying interest on their debt. Damn bill collectors, who do they think they are? With shares so cheap, Bally's being a household name, and America getting fatter - Bally's might be worth a shot. People who are severely obese - 100 pounds or more overweight - are the fastest growing group of overweight people in America - up a startling 50% in 5 years (this according to an ABC report). So, sit back, eat another doughnut, pop in a crappy Seagal movie, and make some money on Bally's. You can bet the traders are going to town on this baby today, get your doughnut on! They did recently warn that they could go bankrupt, they are in debt about $750M but they have annual revenue of $1B. Use caution Masters, but still could be fun to play.