Nobody was really surprised when shares of online travel agent Priceline.com (Nasdaq: PCLN) soared 53 points to close at 69 on its first day of trading Tuesday. What was hard to figure out was Wit Capital’s buy rating on the stock. Internet analyst star Jonathan Cohen started his Wit Capital era by recommending the stock.
“We believe that Priceline is positioned to fundamentally change the existing model for online commerce,” Cohen’s research report said. This is all probably true, but giving a buy rating to a stock that most people can’t buy at its opening price of $16 can only lead to frustrated investors.
The research report went on to say that Wit Capital figures that Priceline stock could be worth $35 to $50, although they believe that “the shares could trade above that range after the pricing of the transaction.”
Meantime, we’ve obviously seen the stock exceed that range. Thus, we’re left wondering whether investors are still wise to buy Priceline at its current rates.
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