A small 15 million dollar market cap company just loves to boggle the minds of traders and investors. LiveDeal, Inc. (NASDAQ:LIVE), according to their website, appears to be focused on mobile marketing. Unfortunately, it hasn't been too successful as it has made consistent net losses for the past three years. Not only negative net income, but negative operating income. Things appear to be rough for the company.
The stock of LIVE is fascinating and bewildering. Take a look at this one year chart.
This stock absolutely loves to fly upward to ridiculous heights then crash back down violently. The stock has a 52-week low of $1.02 and a 52-week high of $18.58. The variance from the 52-week low to the 52-week high is over 1,700 percent. Just recently the stock began to run up again, who knows where it will head this time? The stock chart looks like a blind snake.
The funny thing is, there doesn't appear to be anything rational to explain the movements. LiveDeal recently acquired the assets of LiveOpenly, Inc. and issued 75,000 shares to LiveOpenly, Inc. According to the recent 8k by LIVE, LiveOpenly, Inc. "sourced, published and sold discounted offers for goods and services through local retail merchants." That sounds quite a bit like a Groupon clone to me. To my surprise, when I tried to visit LiveOpenly's website, it didn't work! I tried both Firefox and Internet Explorer to no avail. Has it been shut down or is it just poorly optimized? For the sake of LIVE, I'm hoping it's the first option as they are supposed to be all about optimizing websites. There doesn't seem to be any mention of this acquisition leading to a net income. It's hard for me to explain the rapid price movement up to $18 using this event. Revenues have been stable in the last four quarters as has been the net loss.
A Potentially Great Short
If you are lucky enough to have a brokerage with shares to short of this stock, then shorting this looks like a sure bet when it cracks and begins heading down. Sadly, I use a broker that does not have any, so I've been drooling over this as it fell 8% today. When you start seeing posts such as "I am long LIVE and will not sell to anyone. LIVE is headed to $100 imo" on message boards coupled with a steep increase in price, you know it's time to short.
Disclosure: I have no positions in any stocks mentioned, but may initiate a short position in LIVE over the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.