Is EVST a 'Sell The News' After �The Contender� Launch?
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NBC's new show �The Contender� aired last night and feedback on the show has been positive, with some calling it the next big TV hit. The jury is still out on shares of boxing equipment maker, Everlast Worldwide Inc. (Nasdaq: EVST), which have been ramping higher in anticipation of the event.
The stock, which had been trading in the mid-$3 level during the late part of 2004, have soared and are currently trading at $12.99, just shy of a multi-year high.
This looks like a perfect example of a 'buy the rumor... sell the news' type situation. But is it? Action and volume in the stock yesterday indicates that some traders where anticipating just this type of event. Yesterday, the stock gapped higher, ran to an intra-day high of $14.60, and then sold off to close at $12.91, a bit lower than last Friday's close. Volume was about 3x the recent level.
In our opinion, because the market cap on EVST is just $40 million the stock could quite possibly avoid the 'buy the rumor... sell the news' phenomena as traders convince themselves to hold the stock as a value play. But a catalyst to drive the stock higher after The Contender remains a mystery. Maybe if the company provides feedback on ramping product sales this may be enough to keep the stock rolling.
The stock, which had been trading in the mid-$3 level during the late part of 2004, have soared and are currently trading at $12.99, just shy of a multi-year high.
This looks like a perfect example of a 'buy the rumor... sell the news' type situation. But is it? Action and volume in the stock yesterday indicates that some traders where anticipating just this type of event. Yesterday, the stock gapped higher, ran to an intra-day high of $14.60, and then sold off to close at $12.91, a bit lower than last Friday's close. Volume was about 3x the recent level.
In our opinion, because the market cap on EVST is just $40 million the stock could quite possibly avoid the 'buy the rumor... sell the news' phenomena as traders convince themselves to hold the stock as a value play. But a catalyst to drive the stock higher after The Contender remains a mystery. Maybe if the company provides feedback on ramping product sales this may be enough to keep the stock rolling.
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