>OpenTable: Short on Valuation

March 3, 2011

>A Boston presenter recommends shorting OpenTable (NASDAQ: OPEN, $89.11). The stock has moved close to 200% in the past year and the current valuation is based on unrealistic assumptions about the company’s growth potential, according to the presenter. There is limited competition currently, but recent entries into the space signal threats to the company’s dominance in online restaurant reservations. There are also indications that the National Restaurant Association could be considering its own reservation system as part of the membership package. Smaller establishments, which account for a vast majority of domestic restaurants, are unlikely to go with OPEN’s pricey offering.

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