With more grains of salt than you'd usually find rimmed around a margarita glass, check out the National Enquirer story that O.J. Simpson is looking to sell the knife used to murder his ex-wife Nicole Brown Simpson and her friend, Ronald Goldman, in June 1994. The former Heisman Trophy winner and sportscaster beat the criminal rap in 1995 in Los Angeles, but is now doing time in Nevada for attempting to take back his football memorabilia from collectors in Las Vegas at gunpoint.
Keep in mind that the Enquirer is the paper fond of splashing news of alien abductions and Elvis sightings on its sensational pages and covers designed to entice stalled grocery shoppers to take a lurid peek. Last month, the Enquirer fueled rumors that O.J.is the biological father of Khloe Kardashian. So now it is to be believed that the erstwhile actor who appeared in such films as Capricorn One and the Naked Gun series wants to sell the weapon that someone--but not himself--used to murder two people, a crime for which he was acquitted by a jury 17 years ago?
It's strange stuff, and a weird way to make a twisted confession. That's something you could also say about Google and the premature release of third-quarter earnings by a subsidiary of financial printer, RR Donnelley & Co. They were bad. Profit sagged below forecasts and so did sales, even though they were up 45% over the same quarter in 2011. The stock tanked before trading in the stock was halted, down some $68, or 9%, after opening at $755.
Check out the cliff in the $740 call options that expire November 17. They opened as high as $35.85 and plummeted to $2.60 before Nasdaq pulled the plug.
Google plans to hold a conference call after the close to discuss results, and Larry Page will undoubtedly have a bit more to talk about than he would have absent the bizarre snafu with the early release.
If growth in revenue was 45%, that's nothing to sneeze at, and especially nice given the lean 15.8 earnings multiple, based on the consensus estimate of $43.44 per share going into Thursday morning.
If earnings for the full year come in anywhere near the previous forecast, Google still looks cheap, but how long before the market recognizes this again and sends shares higher? By Friday? Who knows, but maybe not. Perhaps by December if the market overall regains its mojo.
If you think Google gets back to $750 per share by Christmas, you can speculate and put in a low-ball bid for the December 22 $750 calls that got schmeissed from $35.90 this morning to a final tick before trading was halted at $6.80. By Christmas, your single contract for $680 could be back up to $3,590...or you could be in for a total loss. Do you feel lucky, punk? Well, do ya?
The problem of course is that you will have to put in a limit order that may or may not get hit. One proxy that is still trading is the Powershares QQQ, which tracks large cap tech stocks like Apple, Intel, and Google. At-the-money $67 December calls on the QQQ were pounded 23% lower today, last quoted with a $1.93 asking price. This morning it was $2.44
If you roll the roulette wheel, try to get out of the trade before your losses get over 10%-15%. Maybe it's a head fake, but it's best to skip out of bum trades before they become ghastly.
