Take a look beginning about 1:15 of this video.
Sullivan: "Three-fourths of the stock price is effectively cash or short-term investments... you're paying for about 25% of the business is [sic] the stock price. That's why we look at cash," he knowingly lectures CNBC viewers.
He's referring to this statistic compiled by CNBC gofers:
Yes, cash is 75.1% of total assets for Priceline. That just means, like a lot of internet companies, they don't have a whole lot of physical assets like factories, retail stores, and inventory. Duh. It has absolutely nothing whatsoever to do with the stock price. The stock price, in fact, is around $690, giving Priceline a market cap of about $35 billion. That's seven times the $5 billion in cash and equivalents on the balance sheet. Here's some remedial math for CNBC:
3/4 ≠ 1/7
"That's why we look at cash" indeed.
It can't be chalked up to a simple mistake or misreading of the graphic. Anyone who thinks a high-flying internet stock like Priceline could be trading anywhere close to cash on the balance sheet has absolutely no clue what is going on in the market.
I can't believe they ran a whole segment on this and nobody told Sullivan he had no idea what he was talking about.
Anybody who uses CNBC for financial information and insight is duly warned.