The week ahead, Sept. 19th, Pandora & Netflix

Markets are down through Mid-day today, and after last week's great move up, it shouldn't come as a total shock.  The question now comes does it give all (and more) back this week, or is this just a pause and the rebuilding continues?  My outlook for the week is to see today hold and tomorrow spend more time in the red (whether that means an open up and fall during the day, or open lower).   After that it's more of a guess than what I just made.  Either way, in today's action you there are a few standouts bucking the trend...AAPL, CMG, and WYNN are some of my long favorites doing well.

Pandora is up 5% with only some rumored hope that Google or Sirius will buy them up.  I think that talk is premature because any company knows that the overall business model is weak and they'll be able to buy them up in the next year for a cheaper cost.  Also, they have competition from Spotify which just launched in the US in July, and Apple's iTunes Genius.  Who wants to go against Apple these days?  Besides, if they sold now they would have to secure a large premium to the current stock price...I would guess at least $20-25/share to clear the $16 IPO offering to calm an investor outrage and a heavy class action lawsuit against the company for coming public sell out below the IPO price.  Buy waiting another year investors would still be pissed, but they could blame the competition and market conditions and shareholders could happy just to get out with $12-15/share.  This is one I'm going to look at shorting today while it's around $10.75, and looking at this chart, you can't tell me a huge rally is coming up soon.  Even with the best conditions, $14 is going to be tough to break.




In other news, Netflix is planning to separate DVD and streaming businesses into different units.  The new DVD business will be called "Qwikster" and if you have both services, you will be billed separately.  As the stock as been hammered, I think this is another dumb idea.  Netflix is a well known, established brand, now confuse the people that haven't adopted either yet and give it a new name?  And your basically telling investors that the mail service is garbage...so why buy into that area?  But more importantly, why not call the new division"NetflixMail", "NetflixDVD" or "Netflix-"whatever...keep the name for recognition and help both your brands at the same time.  On top of that, apparently the Qwikster name is already taken on twitter, so any social media types will go check out this guy, who's seems a little more into smoking pot then running a DVD mailing service.   Talk about a company F'ing up as much as it can.

Few more good reads to take a look at, while I get into buying/shorting mode for the afternoon.

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