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Monday, June 13, 2005

Watch out, Taser (TASR) is flying!

Today's news about Taser (TASR):

1. Taser receives $1.4 mln order from the United States military.

2. Taser discussed negatively in Barron's: Taser is also the tgt of a raft of product-liability actions, including 6 training-injury suits and 11 wrongful-death suits. With sales down sharply and legal battles looming, even at $10, Taser would stack up as a risky spec. Specifically, in its entire 4-year span as a public co, Taser has earned less than $25m. Yet in the past 2 years alone, insiders have sold stock worth a cool $138m. Chmn Phil Smiths, CEO Rick Smith and president Tom Smith sold stock for a whopping $110m.

And what is Taser doing today on pre-market? Whooa... trading at $11.61 (+7.10%). OK, guys, which one shows better the future of Taser? A tiny $1.4 million contract or the fact that the CEO sells a huge amount of shares?

Taser (TASR) is a stereotyped hype, there is no doubt. Playing hypes may be killing (but also very profitable) when they are in up-trend, but 2 times as killing when they are in down-trend. If you really want to buy hypes, just go and find one! But don't buy a fading ex-hype. If you really (I mean, really) know what you are doing, go ahead, there is nothing wrong with playing on hypes, but I have heard enough stories how people have lost all their money in these situations).

Look at the chart below and ask yourself reasonably: do you believe that Taser is heading up to $30 or rather down to $5?

Stock Chart: Taser (TASR)
Chart courtesy of StockCharts.com.

Read further:
Briefing: TASER receives $1.4 mln order (paid subscription required)
Briefing (Barron's): TASER discussed negatively in Barron's (paid subscription needed)

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