User 207017

Mercado Libre: Overhyped

your article is interesting. I dont know what "overhyped" is referring to however. If this means a price of $150 by year's end - then yes its overhyped - I agree. However $60-65 by the end of the year....likely - in my opinion. I however tend to think that the key for this company is revenue (top line) more than bottom line at this point. As a young company they will have lots of discretionary spending so they may miss bottom line consensus - but they did for q1 the stock dropped from $54 to $50 in after hours but during the course of the day, the next day it rose. As the conference call said during Q1 earnings, those discretionary spending dollars can be adjusted and brought down but right now its about building a name and momentum ie the commercials currently running. Interesting to note is that if you go to alexa.com and you type in the website mercadolibre.com to see the website's stats what you will notice is that the site goes from being about the 3000-3500th most popular site globally for several months and shoots up to number 2000 globally in the past couple of weeks (click the rank tab) - by the way the "reach" and "page views" also shoots up. This coincides with the company's marketing campaign which begain in late April (the big rise takes place in early May) according to the q1 earnings call. So at the very least, their marketing campaign seems to be off to a strong start. This is the type of thing that will continue to push up top line performance - revenue. The bottom line will come. Just my thoughts. I dont own it but its one i have been following. One problem i found with Barrons is that they completely discount the possibility of people using the site more than once. Like E-Bay, the company has users who use it multiple times so even though the company is growing faster than the internet penetration rate - people can and do use it more than one time - Barron's just looks at the penetration rate and discounts multiple uses. Finally, as far as the company's longevity, they just one 3rd place in best companies to work for in South America - so they are doing things (outside of the financials) which bode well for it. I dont know about shorting and going long at certain prices - but I would just be wary about discounting it too much. I tend to watch the options market to see where the stock is heading because its so thinly traded, large positions and holders can and do move this stock. Cheers,