Short Ideas "if" Corona Virus Hits Our Shores In a Big Way

Discussion in 'Stocks' started by vanzandt, Feb 14, 2020.

  1. vanzandt


    I don't think it will, but its good to have a shopping list.

    Need to find the high PE flyers that generate their revenue mainly from a model that depends on lots of people in close quarters.
    Obviously some of the fast food places. We'll put CMG at the top of that list.

    Retail.... ah... they're all beat down anyway. Nothing to see there.

    Airlines... always a good bet. Gotta look into that.

    Ok I got one for ya'll that's off the radar somewhat and its way overpriced.

    Planet Fitness. ($PLNT)

    Now mind you, earnings are on 2/25 after the bell.
    The chart continues breaking out north and its pretty much 100% institutional ownership. The thing looks like its gonna continue up. It keeps hitting new highs. Short interest is very low, so I could see it continuing up.

    Shorting it right now would be a very bad move. My prediction is it will continue up to where its so overpriced that the financial press will pick up on it and start the game rolling. Then the shorts will start piling on... and it will go even higher. And higher. But.... that's without the Corona Virus. If that hits our shores in a big way, this thing will easily drop below its 200 day which is about $72 right now. The stock is at $85.

    So let it run. Its overpriced, but that never matters. I hope it breaks $100.

    Moving on... hmmm.
    Are there any movie theater stocks left? They're probably on life-support anyway.

    If Darden ($DRI) gets much higher, it'll be a good one too, with or without Corona. No way its gonna break its ath at $128. That chart is ugly.

    Ahhh... like I said, I think this will fizzle out.
    Buy China now and hold for 20 years. You all will be rich.
    Last edited: Feb 14, 2020
    zdreg likes this.
  2. smallfil


    Airlines would be a good bet even now especially, those ones based in China. Of course, it depends how fast they develop a vaccine. Those developing vaccines could be big winners if they find a cure for this virus.
  3. S2007S


    Wow...short ideas? Really. Stop stop....there are absolutely no short ideas!!!! Why? Because this is a non event. If this virus was as worrisome as most think the markets would be down thousands of points now. Markers would probably be closed due to the extreme selling, the fed would have cut rates below 1% by now with QE. The market has entirely ignored the coronavirus and will continue to do so and not only that but the day they announce a slow down in the contagion and find a cure markets will rally 3-5% in a week. Dow will surge pass 30,000. There are no short ideas and never will be......
  4. mt2rules


    Thanks for the ideas! I've been watching PLNT for awhile but what are your thoughts on PTON as an alternative? Not exactly along the same lines but the technicals look much worse and the fundamentals aren't much better - slowing top-line growth, bad margins on the hardware, ludicrous valuation, and of course lack of profitability for years.
    vanzandt likes this.
  5. Real simple, it will run it's course and go long healthcare and security industry's.
  6. /sarc...

    So far, markets are playing... "Fed pumping TRUMPS EVERYTHING". Will continue that way until market "changes its mind". If/when the market wakes up to the potential damage of the virus, should it come to that, the market will tank so fast we won't be able to get out of the way.
    FriskyCat likes this.
  7. qwerty11


    MSFT jul20 put 140 now buyable at $1.00
    AKUMATOTENSHI likes this.
  8. vanzandt


    I don't know about PTON yet. They are projecting huge sales growth. Their subscription biz is high margin, I don't think they make that much on the equipment. They have a pretty solid balance sheet, no debt and over a Billion in cash.

    That said.... exercise equipment... and I know this is fancy stuff and part of the IoT's... but you sure do see a lot of exercise equipment at garage sales and next to the curb on trash day. Point being... people buy this stuff and never use it. When that happens... the first thing to go will be their subscription... PTON's (alledged) golden goose.

    Its too tough to call right now though. There's 35M shares short on a float of 44M. If anything, there's potential there for a huge squeeze on some BS news story. I would almost bet that happens. Its kind of a one trick pony, reminds me of Fitbit in a way, and we all know what happened there.

    Certainly a good one for the radar, I'm gonna start watching it. Thnx.

    EDIT.... I just checked... they have a lock-up period that ends March 24th btw. With that many shares short on such a low float and a lock-up period set to expire in just over a month, one thing's for sure... this thing is gonna be volatile af. The straddle 2 weeks out is priced for a 10% move.
    There should be some great trading action on it in the coming weeks.
    Last edited: Feb 14, 2020
    mt2rules likes this.
  9. mt2rules


    Yeah, my immediate reaction when I read about it was how similar it was to FIT and more loosely GPRO. Huge hype for something that is going to have major competition with margins that will shrink, not grow. The short squeeze is the biggest concern, Bloomberg had an article out the day before earnings saying that over 100% of the float was short:

    There is some uncertainty around when lockup will expire, initially it was supposed to be March 24th but now there is speculation that this will be during a blackout period so it will revert to February 24th. It's definitely one to keep an eye on over the next few weeks if the lockup does expire.
    vanzandt likes this.
  10. vanzandt


    Hmmmmmm on the lock-up period.
    Good catch. Interesting.

    I just went to their S-1. This is on page 41 here:

    It does speak of exactly what you are talking about.:thumbsup:

    A lot of times they file amendments to these things. I gotta run right now but I'll look later for additional filings and figure this out.

    We have a large number of security holders and such security holders have acquired their interests over an extended period of time and pursuant to a number of different agreements containing a variety of terms governing restrictions on the sale, short sale, transfer, hedging, pledging, or other disposition of their interests in our equity. Holders of our outstanding shares of Class A common stock and securities convertible into or exercisable or exchangeable for shares of our Class A common stock are subject to restrictions on their ability to sell or transfer their equity either prior to the pricing of this offering or from the pricing of this offering through the date that is 180 days after the date of this prospectus. We refer to such period as the lock-up period. Pursuant to the lock-up agreements with the underwriters, if (1) at least 120 days have elapsed since the date of this prospectus, (2) we have publicly released our earnings results for the quarterly period during which this offering occurred, and (3) such lock-up period is scheduled to end during or within five trading days prior to a broadly applicable period during which trading in our securities would not be permitted under our insider trading policy, or a blackout period, such lock-up period will end ten trading days prior to the commencement of such blackout period. We and the underwriters may release certain stockholders from the market standoff agreements or lock-up agreements prior to the end of the lock-up period. Record holders of our securities are typically the parties to the lock-up agreements with the underwriters and to the market standoff agreements with us referred to above, while holders of beneficial interests in our shares who are not also holders in respect of such shares are not typically subject to any such agreements or other similar restrictions. Accordingly, we believe that holders of beneficial interests who are not holders and are not bound by market standoff or lock-up agreements could enter into transactions with respect to those beneficial interests that negatively impact our stock price. In addition, an equity holder who is neither subject to a market standoff agreement with us nor a lock-up agreement with the underwriters may be able to sell, short sell, transfer, hedge, pledge, or otherwise dispose of or attempt to sell, short sell, transfer, hedge, pledge, or otherwise dispose of, their equity interests at any time after the closing of this offering. Any such transaction described above involving shares of our Class A common stock, or any perception by the market that such transaction may occur, could cause our stock price to decline.

    When the applicable lock-up and market standoff periods described above expire, we and our security holders subject to a lock-up agreement or market standoff agreement will be able to sell our shares in the public market. In addition, Goldman Sachs & Co. LLC and J.P. Morgan Securities LLC, on behalf of the underwriters, may, in their sole discretion, release all or some portion of the shares subject to lock-up agreements prior to the expiration of the lock-up period. Sales of a substantial number of such shares upon expiration of the lock-up and market standoff agreements, or the perception that such sales may occur, or early release of these agreements, could cause our market price to fall or make it more difficult for you to sell your Class A common stock at a time and price that you deem appropriate.

    In addition, as of June 30, 2019, we had stock options outstanding that, if fully exercised, would result in the issuance of 64,602,124 shares of Class B common stock. All of the shares of Class B common stock issuable upon the exercise of stock options, and the shares reserved for future issuance under our equity incentive plans, will be registered for public resale under the Securities Act. Accordingly, these shares will be able to be freely sold in the public market upon issuance subject to existing lock-up or market standoff agreements and applicable vesting requirements.
    #10     Feb 14, 2020