Michael Comeau's  Instablog

I rarely make unhedged options trades, but yesterday I bought a chunk of Motorola (MOT) July $6 puts. For those unfamiliar with options trading, this is a bet that Motorola's stock price will drop by more than 20% by July.

So let's get to it! Here are six reasons I'm betting against Motorola.

1) Last Quarter Stunk

Despite having a very hot product in its Droid smartphone, Motorola reported a pretty lousy fourth-quarter earnings report, complete with a stinky outlook for Q1.

2) Android Competition at Verizon is Heating Up

The Droid has been the hot Google (GOOG) Android phone at Verizon (VZ) Wireless, but that's about to change. Two superior Android devices, the HTC Droid Incredible and the Google Nexus One will soon be sold at Verizon, and that's going to cut into Droid sales. Even Lenovo is getting into the Android-phone business!

3) Apple (AAPL) is Likely to Release a New iPhone This Summer

Apple has released a new iPhone model every summer for the past three years, and that is a pattern. What's more is that Gizmodo just released a report unveiling what is almost certainly a prototype for a new iPhone. This phone will definitely rule at AT&T (T). And if it makes it way to Verizon - the competition problem becomes even worse.

4) The Stock is Up In the Face of Bad News

Motorola's stock price has jumped about over 25% off the January lows despite the fact that there has been nothing but lousy news since then. Competition in the smartphone market has gotten so bad that Palm (PALM) is hanging on for dear life despite having quality products, and the Android-phone market is quickly becoming oversaturated.

To read the final two reasons I'm short Motorola, check out GadgetStocks.com.

Disclosure: short MOT, long AAPL

Disclosure: short MOT, long AAPL

Here's a quick and clean round-up of the hottest news stories impacting the video-game world:

First things first, THQ (THQI) reports first-quarter earnings after the close on Tuesday. Riding high on the success of UFC Undisputed 2009, THQ is set to begin what looks like an impressive comeback following two lackluster years. Here's a full preview of the quarter, courtesy of PleaseActAccordingly.com.

Elsewhere in THQ news, the company hired a new executive from Midway to head up marketing for the upcoming title Darksiders, which is generating considerable buzz within the industry.

Activision's (ATVI) Call of Duty: Modern Warfare 2 continues to excite gamers. Watch this brand-new trailer to find out why this game will set the world on fire.

Disney (DIS) Interactive boss Graham Hopper had this to say about movie-game crossovers: "I don't think they've all lived up to their potential, but again: the future doesn't always arrive exactly when you want it to." 

Elsewhere in big media, Viacom (VIA) saw Q2 profits fall by 32%, with declining sales of Rock Band being one of the culprits. That's not a good sign for Electronic Arts (ERTS), which publishes the music/rhythm title.

In my first feature for The Excapist, I discuss why consumers should be very wary about the the exploding market for direct video game downloads, and what it could mean for companies like GameStop (GME).

And finally, is the recession killing the video-game industry? I answer that question here.

Disclosure: long ATVI, THQI

Until just a few years ago, Lenny Dykstra was a baseball legend. To the surprise of many, he transitioned into a financial media celebrity of sorts, writing a popular series of columns for my former employer, TheStreet.com (TSCM).

Lenny's also received his fair share of negative press, having been accused of everything from steroid abuse to not paying his accountants.

But things are taking a new turn.

On Monday April 6, the NY Post laid down a pretty nasty set of allegations against the King of the deep in the money call: saying the following:

Lenny Dykstra, the once high-flying former Met turned entrepreneur and self-described Wall Street whiz, is at risk of losing his $18 million California mansion and private jet, according to documents and associates.

"He's been writing bad checks all over town," one source said.

The private-equity firm Index Investors filed foreclosure papers March 11 on Dykstra's sprawling Thousand Oaks estate, which he purchased from hockey legend Wayne Gretzky, records show.

The NY Post also quoted a source claiming that Dykstra is behind on a loan for his troubled "Players Club" financial publication, and that his private jet has been impounded.

For better or worse, Dykstra has become one of the biggest stars within TheStreet.com's family of sites. And now he's facing a storm of negative publicity related to how he manages his own money. Quotes from anonymous sources are more smoke than fire. But allegations of financial impropriety could seriously damage the marketability of one of TheStreet.com's biggest and almost certainly most profitable stars, a clear negative given the company's dependence on Jim Cramer and need for further diversification.

And on the actual investment side of things, Lenny's investment strategy based around buying deep in the money call options is exceedingly risky, and any serious downturn in the market would wipe out a large number of subscribers to his "Nails on the Numbers" investment newsletter service.

You never know, people just might start thinking that the centerfielder has no clothes.

Disclosure: No Positions