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Jay Somaney is a partner and fund manager with TSG Capital Partners, a hedge fund based in Plano, Texas and writes Jay’s “So Money” Trading Diary on StockuVerse.com . Jay Somaney currently manages TSG Tech Fund, a hedge fund focused on the shares of companies involved in the Internet and related... More
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  • All About Tech Earnings Tonight: Buy, Short Or Sit? 0 comments
    Aug 1, 2013 1:16 PM | about stocks: MELI, CNVR, OPEN, SYNA, T, LNKD

    Tonight after the close of regular market trading we have the following important earnings in techland: LEAP, LNKD, MELI, MOVE, ONNN, OPEN, SYNA, and VCLK. So, what's the call on each stock going into the earnings event tonight. That's what this article is about, so read on.

    Lets start of with Leap Wireless which is set to be acquired by AT&T (NYSE:T). Expectations are for a loss of $1.12/share on revenues of $734 million. I expect a beat but since the stock is married to T, not expecting much of a move in either direction unless they announce a second bidder.

    LinkedIn (NYSE:LNKD) is expected to report earnings of $0.31/share on revenues of $354 million for the June quarter. For the current quarter ending September 30, 2013, the sellsiders are modeling earnings of $0.32/share on revenues of $384 million. Lets me just put it out there. I love LNKD and use it daily. However, with the valuation at the moment the best way to play the earnings event if you are long is to sell calls against your shares. I am short the calls expiring tomorrow against my long share position. If you do not have shares and want to take a stance, I think the shares should sell off post earnings and quickly regain the upward climb once the hot money is out. Basically a drop and then pop.

    Mercado Libre (NASDAQ:MELI) is another stock that has had a great run this year, up almost 80% in the last year. June quarter consensus is for earnings of $0.62/share on revenues of $108 million. Roughly 20% of the float is also short at the moment. One area of concern is the company's forex treatment which is something to watch out for but all in all, MELI is a BUY into earnings.

    MOVE also reports tonight and the Street is expecting breakeven earnings on revenues of $55 million for the June quarter. Valuations are totally on crack but when you look at the multiples afforded to the other competitors within the space, MOVE is actually undervalued. Move has also missed estimates for 3 of the last 4 quarters as well which is another factor to consider. Having said that, I am ambivalent on MOVE. Its a toss up from where I sit at best and maybe a risky darkside play at worst.

    ONNN is expected to report earnings of $0.13/share on revenues of $696 million for the June quarter. The company has more debt than cash, and an extremely low short interest. Playing the earnings with options, puts or calls, will more than likely lead to both sides losing their money. If you are long shares, sell calls against the position and use the premium to lower your cost basis. Basically, slightly bearish.

    Open Table (NASDAQ:OPEN) is also set to report results for its June quarter tonight after the close. The Street is expecting earnings of $0.47/share on revenues of $46 million. 24% of the float is short at the moment offset by almost 7% in gains for the day as I write this article. The company has also received massive exposure through television shows and its all about growing its customer base and earnings leverage going forward. Look for the momentum in the stock price to continue going forward.

    Synaptics (NASDAQ:SYNA) has already positively pre-announced numbers for its June quarter, and the share shave popped as a result. However, you and I know that management has left some positives unsaid for the earnings event tonight. They would be daft not to, no? Stay long or go long.

    Valueclick (VCLK) is expected to report earnings of $0.39/share on revenues of $166 million for its June quarter. The company is set to lose its business from GOOG due to the decision by GOOG to exit the affiliate marketing segment could temporarily affect VCLK. While, I have no positions on either side of VCLK, I would be selling calls here.

    Hopefully each and everyone of you find value to this article and me putting my neck on the line out here on seekingalpha.com. Good luck going into the earnings tonight no matter which way you are positioned, good guy or darksider.

    Disclosure: I am long LNKD. 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.

    Additional disclosure: short lnkd calls

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