TASR crasho? Maybe, but I'm not borrowing a single share to find out. From: TheStreet.com
Taser Stock Can't Handle the Demand
Wednesday March 31, 9:51 am ET
By James J. Cramer, RealMoney Columnist
Occasionally, a stock comes along that simply can't handle the job of being a stock. It just isn't cut out for it, doesn't have the right float, doesn't have the right share count, to handle the raw interest. On those occasions, there is nothing you can do except marvel, and, if you are totally daring, try to capitalize on it.
The stock that can least control itself and police itself, right now, is Taser (TASR:Nasdaq - commentary - research). Here's a company with a market capitalization of a billion that maybe, just maybe, should be at $3 billion or $4 billion just to satisfy the demand of the buyers. There, of course, the company would sell at 360 times earnings. So what, though?
There just isn't enough Taser stock to go around. Supply and demand rule the roost of the market, so this stock has become a major quandary. Given that there are no zebras in this game, given that every police department seems to be on the verge of going Taser given that the departments that have it basically have stopped killing people, including those who later will be found guilty and more important, those who truly are innocent, you can see how Taser could go up 10 points every time it wins a police order. Worse, from the point of view of the malfunctioning market, Taser's now trading much more each day than the entire float.
To be fair, the company's a tad promotional, but it has a lot to crow about. What it can't do, though, is have a constant secondary going on to meet demand. So, what happens is what will happen today and what happened yesterday and the day before, and so on: The stock will explode and the shorts will get bought in during the last half hour of the session. That has to happen, given that more stock trades each day than is available to trade. There was a time, of course, when market makers used to be able to intervene to stop all of this. Guys like me, back when I was at my hedge fund, would have gone to a trader who made a market in Taser and say, " I need 10,000 Taser," and the head trader would get on the phone and say "Come on Jimmy, give us a break! You know it can't be borrowed. Don't pile on and make it worse! We are getting killed on this name!"
These days, though, you can blitz the stock up with machine orders. There are no complaining traders out there saying to cool down.
Which is why every day is a Taser day on the Nasdaq.
Now, just wait until New Jersey repeals the law banning Tasers! The stock's gotta double on that day, doesn't it?
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