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Opentable Is A Bubble, Here's An Eyeopener:

Please take a look at revenues of last 5 quarters:

In round figures: 31, 34, 34, 34, 37 million

That last quarter is the last quarter of the year, traditionally the best quarter for restaurants.

What this means is that Opentable has hit a brick wall and is not growing anymore. Growth has come to a grinding halt. And worse: margins are under pressure from competition and rising costs.

A stock that is not growing anymore is at best worth its revenues. This should give Opentable a market cap of 150 million instead of 1.2 billion.

But to really realize the insanity of the current valuation, you should know that each dollar rise in stockprice is about 24 million rise in market cap. Between the two last earnings, the stock rose from 32 to 50. Revenues only rose from 34 million to 37 million.

So? .......So a meager 3 million rise in revenues translated into a 480 million rise in valuation. Almost half a billion.

Yes, 3 million additional revenue was worth half a billion in stock rise. That is more than 3 times the entire yearly revenue. So this non growth stock is now worth 8 times its revenues. It went from 5 to 8 times the revenues, in just a few months it added half a billion to its market value. Based on a 3 million revenue rise?

Even if you divide that half a billion by 10 it is still crazy. A 50 million valuation rise is also an insane reward for a 3 million revenue rise. But we're not talking about 50 but 480 million, 10 times the multple of that. For a 3 million revenue rise?

If the current stock price won't collapse to 10, I'll eat my shoe. It is really not hard to recognize a bubble stock. The insiders do. For example, the former CEO Jeffrey Jordan has left the company for the bagholders. Just look how he used this last pop to exercize his remaining options for millions:

Disclosure: I am short OPEN, CRM.