Look for a Possible Short Squeeze in OpenTable After the Close
OpenTable (NASDAQ: OPEN) is set to report earnings after the close. Investors should be mindful of the possibility of a short squeeze.
As of the last report, more than 30% of OpenTables shares have been sold short. Should the company report a strong quarter, these shorts may be left scrambling to cover.
Analysts are looking for OpenTable to report earnings per share of $0.43 on revenue of $42.54 million. Should the company beat these figures, and guide higher, shares may spike in after-hours trading.
This phenomenon may have behind Netflix's (NASDAQ: NFLX) powerful rally after it reported earnings last month.
Of course, OpenTable is heavily shorted for a reason. With a PE ratio above 50, OpenTable certainly isn't a cheap stock.
(c) 2013 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.