I recently shorted Salesforce.com (CRM). The two part analysis can be found on GuruFocus.com
Part 1 – Heavy insider selling for a stock with P/E over 200
Part 2 – Many red flags caused me to short CRM
Disclosure: I had a short position in CRM at the time of writing via Put options. I no longer have any positions in CRM.
If I was an executive for CRM I think I’d be selling too! Great analysis, do you have a time horizon on your short position?
Interestingly, there are not as many short positions as I would have expected: http://shortsqueeze.com/?symbol=crm&submit=Short+Quote%99
Today a lot of the high beta or over valued stocks are down sharply. So, if you have shorted via a put option, you would have made some money already. Shorting via shares will take more courage as Wall St typically has supported this stock when it goes down.
I agree with you Adib, CRM is extremely highly valued and its growth is – relatively – coming down. There is a great series of article from Montier about shorting stocks relying on a value approach, based on price to revenue, asset growth and the use of “others” in financial statements. I looked at it a while back and CRM was basically scoring highly indicating it’d be a good short. However given the overall market “love” for CRM one has to be prepared to be patient!
Cheers,
Ben