Just a quick follow up to my recent article “10 reasons to avoid Salesforce”.
I appreciate the comments and feedback the article has elicited. Although the stock has continued to climb, mainly due to momentum and the whole “cloud computing” euphoria, I believe it is only a matter of time before this equity has a significant selloff.
Five more reasons to be bearish on Salesforce.com (NYSE:CRM):
- Fred Hickey is shorting the stock, according to latest issue of Barron’s. It is his only short in the market right now.
- Since the beginning of June, insiders have sold approximately 10mm in stock in roughly 20 separate transactions. This is in addition to their large sales since the first of the year.
- Consensus earnings for this quarter, next quarter, this fiscal year and next fiscal year have all come down in the last ninety days.
- The stock is hitting the price level that it sold off from a week ago and could be putting in a resistance point here at its all time high.
- During its last earnings conference call, the company lowered pro forma EPS guidance for FY 2011 from $1.25-1.27 to $1.13-1.15. The stock has done nothing but go up on this negative guidance (short squeeze?)
Disclosure: Author holds a short position in CRM