BIDZ.com soars on analyst's "buy" rating
BIDZ.com, Inc. (Nasdaq: BIDZ) shares are climbing after investment research firm American Technology Research initiated coverage on the company with a “buy” rating and a $19 price target.
The stock is in a “special situation” and has been severely oversold after an accusatory report against the company was released in late November, Tim Boyd, an Internet analyst for American Technology Research, said in a phone interview. The extremely bearish report, released by the stock blog Citron Research, said the company does business with a convicted felon and said the online jewelry auctioneer’s inventory seemed unusually high.
“There were some interesting points [in the report], but I found once I dug deep enough, there were rebuttals for each of the points,” Boyd said. “Although it had some hair to it, the report was nothing more than innuendo.”
In his report, Boyd noted that the firm’s unique business model, “bargain hunter” appeal and robust traffic growth will keep Bidz.com humming. The company is also trading at retail multiples and Boyd said e-commerce stocks that trade at retail multiples are undervalued. He also expects the Culver City, Calif.-based company to meet or beat Wall Street estimates for the fourth quarter.
In midday trading, BIDZ shares are soaring 17.59%, or $1.53, at $10.23. The stock has had a bumpy ride over the last 52 weeks, with shares ranging from $4.90 to $22.50.
