Thirty-six days. That is not a lot of time. But it is all the time that Miami Heat loyalists in the media needed to trim their long positions and book the losses. Usually, a selloff like this takes another six weeks to gain momentum. But that hasn’t happened here as Heat investors have suddenly all decided that the team’s upside is a good twenty percent lower than previously estimated.
The Heat selloff has been happening for at least a week as “longs” lost patience after Miami got drilled by Indy nine days ago. But the selling really intensified on Saturday night when the Heat went into Dallas and were manhandled by the Mavericks. Following that bludgeoning, Bill Simmons effectively downgraded the team to “sell” on one of his podcasts and the “axe” in the stock – Dan LeBatard – has been all over the airwaves this week with nothing but wishy-washy support.
And then this morning, we got a huge crack in the stock when ESPN morning radio guy Mike Greenberg – a Heat StarGazer – threw in the towel and re-defined what constitutes a successful season down in Miami. I’ll paraphrase here because I don’t have the transcript: “For the Heat, the regular season doesn’t matter. It’s basically an 82 game pre-season to get ready for the playoffs. After all, this team is about winning a championship. And Championships …. Plural! That is why LBJ came to Miami and that is how the team will be measured. “
Wait just one fucking minute! What did you say? After all the buildup. And the unbelievable “fog and lights” introduction to South Beach. And the predictions of a run at the best regular season in NBA history, we are now re-focusing on championships? Wow …. sorry Greeny. No can do as the bar was set considerably higher than that. Yeah, Championships are the fallback. But let’s not distort history here. Rightfully or not, much more was expected of this team. And that is why you paid 72x earnings for this stock. You don’t pay 72 times for JUST a championship. No, you pay that multiple for “special” stories. Think …. 1996 Bulls, Michael Phelps and the Cornhuskers, circa 1995.
Now the Heat may get through this soft patch, improve, and go on to have a very nice season. And a title is not out of reach. But even if that summit is reached, it won’t get Miami’s investors all their money back. And that is because they put their money behind a bigger story. A legendary story. And after eighteen games and eight losses, the one thing we now know is this year’s team won’t be legendary. At least not for doing some positive.
So guys like Greeny and Jeff Van Gundy and Dan Lebatard can back peddle all they want and re-write last Summer’s story, but the fact of the matter is the Miami Heat have ALREADY disappointed. And that is why the stock they – and others – still own is worth a lot less today than it was five weeks ago.
[For the record … when LBJ signed, I thought this was a 55-60 win team as I didn’t think a team with Dexter Pittman in the middle was going to be a huge winner. But when James and Bosh took less money so Miller and Haslem could be added, I upped my “wins” estimate from 55-60 to 60-65, with a bias toward the upper end of the range. But wtih Miller out for half a season and Haslem done for the rest of the season, I am back to my original range. And with Wade off to a poor start, the team’s inability to guard quickness on display every night and some other problems, I am now thinking 55-57.]