Too stupid, guys!

A 4% drop as a reaction to the largest retailer Walmart’s (WMT) $16 billion buyout for a 77% stake of the Indian e-commerce giant, Flipkart. Usually the market reaction to any big buyout tends to be negative for the buyer as it costs money but from time to time, it could be viewed as very positive if there is a great business synergy with a bright future. I think Walmart this move is indeed very brilliant and should be very positive for its long-term future. Think about it, Indian is the 2^nd largest population with booming online business ongoing. Catching this huge e-commerce market now is similar to getting into the Chinese online retailing business 10 years ago I think. The potential is enormous. Actually, I saw some report that Amazon was also interested in this deal and actually it offered even $2 billion more than Walmart. Nevertheless, the funder of Flipkart accepted the lower offer from Walmart with a rumor saying that he did not like Jeff Bezos (Amazon funder) due to some personal dislike. Apparently, Amazon saw the same bright future as Walmart. Now think about it, how the market would react if Amazon got the deal? I’m pretty sure it would be a great reaction as if nowadays anything done by Amazon is great and anything done by others should be scoffed at. Too stupid, folks, if you are selling Walmart now!

I know it is stupid to argue with the Market, as it is supposed to be always right. But let me be crazy once this time to argue with the Market God now with a bold prediction: in a few months from now, I think Walmart has more upside potential than Amazon. I even think Amazon may face a high risk of going down from the current level in the weeks ahead. I believe anyone selling or even shorting Walmart now will be regretting very soon.