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The Cloud

|Includes: Oracle Corporation (ORCL), VEEV

When you get close there is not as much there as it had looked like.

My favorite short idea for 2014 is IPO, which I discussed here. My concern is that the IPO process, especially with technology IPOs, offers the perfect opportunity for showing off new ideas, fully pricing them in, and then some. Want a specific actionable example of what I'm talking about? For a perfect example, I highly recommend Suhail Capital's Veeva Systems: SaaS's Biggest Bubble And Tech's Best Short. It has already started to work, but it is still worth focusing on. Insiders' lockups expire on April 13, 2014. So, one contract worth considering is the June $35 VEEV call option. One can write this contract for at least $4.30. At that price, you will break even at a price of almost $40 per share. Either you will collect premium or, better yet, get short this stock at $35. It is a win/win. The market will be flooded with shares so that even if the supply/demand imbalance does not drive down the price, it will probably keep the short inexpensive and easy to maintain. There is currently a strong demand for anything that can allow users to socialize online with friends, print in three dimensions, or store on the cloud. Buyers should always beware, but should be especially wary of the new supply of securities being produced specifically in order to satisfy such demand. In conclusion, here is Larry Ellison, Oracle (NYSE:ORCL) CEO: What The Hell Is Cloud Computing?