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Forum Newbie
Group: Forum Members
Last Login: Wednesday, October 17, 2007 9:51 AM
Posts: 3,
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I remember your blog entry regarding this stock on seekingalpha sometime last year.I did pick up some put options on this stock.CSTR reported two straight bad quarters, yet the stock isn't budging much.The other think I noticed is that trading options isn't a good idea specially when volume isn't high.
Also, I have been using REDBOX lately to rent DVD's and am really liking it.They do have great locations, are very cheap and easy to use.Even the new movies are rented out for 1$ per day.I think this is something that would catch up considering that they have a tie up with mcdonalds giving them great locations and walk in traffic.
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Forum Member
Group: Administrators
Last Login: Friday, December 12, 2008 12:02 AM
Posts: 35,
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| I sometimes use a DVD kiosk by DVDPlay at my local Safeway that functions pretty much like Coinstar's RedBox kiosks. While I like the availability and price, I have the same problem with them that I did with BlockBuster in the past and that is late fees. Hence I prefer the online subscription services offered by Netflix and BlockBuster at this point. But most people are probably not as forgetful as me and I can definitely see the potential for the RedBox division of Coinstar. You are absolutely right about not trading options when there is very little liquidity and that was one of the reasons I did not add the January 2008 leaps on Coinstar (CSTR) to the model portfolio. Shortly after I wrote the post Coinstar Costs A Pretty Penny on November 11, 2006, the stock dropped over 15% and hence anyone buying put options could have made decent money except for the aforementioned liquidity issue. The stock is still off almost 10% since my post and has indeed underperformed the market as you are well aware and can see from the Yahoo chart below, 
But because of time decay, those options are probably worth less right now. The stock is down today but not a whole lot because their Q3 forecast of 18 to 26 cents is in line with analyst forecasts of 19 cents. I hope you get a chance to sell them for a profit before expiration.
--If the doors of perception were cleansed everything would appear to man as it is, infinite. — William Blake.
Yes, I am blogging @ http://www.sinletter.com/ablog.aspx
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