Wednesday, September 17, 2014

Trading Earnings: Saba Software, Inc. (SABA) – So Much Drama

Thursday, June 28th, 2012

With the Fourth of July right in the middle of next week, the number of companies reporting earnings is under 30. So, we really had to relax our rules to find anything close to company worth talking about in today’s trading earnings.

Saba Software, Inc. (SABA) is expected to report earnings on Monday, July 2, 2012.

Wall Street anticipates that SABA will lose 4 cents for the quarter.  Top Equity News expects the firearms maker to report earnings that will beat Wall Street’s consensus number. TEN’s estimate is a loss of 2 cents –  a 2 cent upside surprise.

However, TEN doesn’t think earnings will matter. The company has a host of accounting issues and has been warned by the NASDAQ that SABA must meet the listing requirement to continue trading on the exchange.

Additionally, the company must submit its financials to Wells Fargo by the end of June, or it stands a chance of losing its line of credit.

One way or the other, Top Equity expects all these issue to be resolved when earnings are announced. If SABA meets the bank’s, NASDAQ’s, and Well Fargo’s requirements, the stock probably pops, maybe even big-time.

Now, if they fail on any account, SABA is likely to leave shareholders sobbing as shares get whacked. Think about it, they get delisted, stock gets cracked. They lose the credit line necessary to run the biz, stock gets cracked. They admit their accounting practices are shady, stock get cracked.

They have to get everything right while only one thing needs to unravel. TEN would probably think about trading options on this one. Maybe a few dollars in the July 7.50 put options and an equal amount in the July 10 call options.

If you are patient, you might be able to pay close to 20 cents for each. Put in $100 bucks both ways and you don’t care which way the drama plays out, you’re just hoping for a big move either way – kind of like betting black or red, with a little educated guess.

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