Gediminas Jasionis

Crown Media Holdings, Inc (NASDAQ:CRWN) Puts Up A Temporary Show

by Gediminas Jasionis July 30, 2010

Traders should understand that the current fundamentals do not support such a high valuation. The rising price put the market cap at $265 million, while the balance sheet shows an accumulated capital deficit of $1 billion. The rising price should be accompanied by at least increasing revenues, which we don't have here either.

Crown_Media_logo.jpgPositive cash flows are the only reason why Crown traded as high as it did, but there was a downtrend preceding the current move and the overall direction cannot change in such a turning motion without the support of very positive news from the company.

Thus, the price rally is likely to fall apart next week, unless there will be some important information unveiled.

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