In early January, the stock of “Boston Sports” was trading at $94, up $30 in three months and sitting at a level not seen since November of 2007. To say the least, November and December had been a great time to be long the stock.
That is because the Patriots got on a serious roll, the Red Sox pulled a couple of blackjacks and won “December,” and the Bruins were sitting near the top of the NHL’s Eastern Conference. Throw in the fact that a strong Celtics team was galloping toward May and the “BS” fundamentals were nothing short of Microsoftian, circa 1995. Less you don’t believe me, you should know that a stock price of $94 implies a championship, a conference title and probably another Final Four.
Hindsight is 20-20 but longs would have been smart to sell on January 14th because since that time, the Boston Sports has done nothing but fall. First it was the Pats loss to the Jets in the AFC Divisional game. Then came the surprising demise of the Celts, hastened by the trade of Kendrick Perkins. And finally, added selling pressure came from the Red Sox pitiful start. Add it all up and the stock is off about forty percent from its early January highs. Last sale …. 57.85.
So where does the stock head from here? I wish I could say higher but that assumes there is something left in the Celtics tank and the way I see it, the Green are a big overhang right now. I realize the bullish investment thesis is built on the premise that this club can flip a switch and move like it did last May. But I saw nothing this week that suggests this is possible, let alone likely. Quite frankly, the Celts look much more likely to lose in the first round than win in the second.
Now optimists are pegging their hops to getting Shaq back, and that may help at the margin, but this team looks like it has been trying to crank things up and there is just nothing there. No focus. No passion. No desire. Given that, should an investor bet that the engine will simply catch next week? Seems like a dubious proposition from where I sit particularly given the fact that the point guard has decided to air his grievances with management by tanking the season.
With the Celts looking more like an anchor than a propellant, I just don’t think BS looks all that sexy. Sure, the Bruins could get something going and there is something to be said for ending a thirty-nine year drought. Beyond that, the Pats will give you a bit of a pop around the draft when they spend their riches and sucker some dipshit into giving them more. And finally, there is now some upside in the Sox as the lemmings have run scared.
But all that said, history tells us the Bruins will have a hard time making it to the Semis. The Celts look like they have little chance of making it past the quarters. And the Sox? Well, they are only a bit worse off than they were a week ago but given what we have seen, one can’t just assume they will win a pennant. Add it all up and the Sox will need a really big season to move this stock if they have to do it alone.
So I am sitting on the sidelines right now. I might miss a move up if the Celts or Bruins get going but I would rather pick this stock up a little cheaper and regretfully, I think I will get the opportunity.