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

easymon1 · Feb 14, 2020

Scataphagos said:
the market
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cued up here it go

'scuse me sir, i wanted to sell a contract please...

Clubber Lang · Feb 15, 2020

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

Planet Fitness. ($PLNT)
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One problem vz, PLNT could be empty for the next three months as everyone stays away due to Coronavirus fears, but everyone is locked into contracts and will continue to pay their monthly dues.

I guess you could make an argument that new memberships will slow but their model is pretty much based on recurring dues paid by people who say “it’s only $10 a month, I’ll keep the membership and start going again”.

vanzandt · Feb 15, 2020

Clubber Lang said:
One problem vz, PLNT could be empty for the next three months as everyone stays away due to Coronavirus fears, but everyone is locked into contracts and will continue to pay their monthly dues.

I guess you could make an argument that new memberships will slow but their model is pretty much based on recurring dues paid by people who say “it’s only $10 a month, I’ll keep the membership and start going again”.
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Thats a good point and I did in fact think about it. Somewhere else here, and I'll look because I don't think it was under stocks, I wrote about how the model will eventually become unsustainable growth-wise.
The actual company makes the lions share of its money off of franchise fee's to start with. That means they have keep licensing new gyms.

Edit... I just did a search... here it is so I don't have to re-write it. https://elitetrader.com/et/threads/...ter-worths-2-short-ideas.332679/#post-4863311 Its a good thread.

But I guess if Corona did hit, it would hurt the franchisee's way more than the parent company because they need to sign people up daily. That said, even if they don't, they still need to pay their fees to the corporate office.
As I said in that post, I wouldn't want to own one. I've crunched the numbers, its a tough business. And they have competition in all the big cities.

mt2rules · Feb 21, 2020

vanzandt said:
Hmmmmmm on the lock-up period.
Good catch. Interesting.

I just went to their S-1. This is on page 41 here: https://www.sec.gov/Archives/edgar/data/1639825/000119312519230923/d738839ds1.htm

It does speak of exactly what you are talking about.

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.
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PTON down close to 7% since we were talking about it the other day. Looks like the bottom might fall out here with the lockup expiry on Monday, it's already broken down to the lows of 2020.

Cuddles · Feb 21, 2020

long healthcare?

vanzandt · Feb 21, 2020

Here4money said:
long healthcare?
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That's a bet on the election one way or the other. Pharma too.

Overnight · Feb 21, 2020

Here4money said:
long healthcare?
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Health care funds are dogshit compared to other sectors over the long-term, even through this coronavirus nonsense. Yeah, they are stable, but that is all they are. Stable. Might as well lock in some bond yields instead. Pffht

You would have done much better over that time frame in *insert anything other than HC here* rather than HC funds.

And there is no reason to suspect this will change in the intermediate future. Especially if we feel the Bern in November. People need to remember that both Trump and the Dems hate health care companies, especially big pharma.

ironchef · Feb 22, 2020

Overnight said:
Health care funds are dogshit compared to other sectors over the long-term, even through this coronavirus nonsense. Yeah, they are stable, but that is all they are. Stable. Might as well lock in some bond yields instead. Pffht

View attachment 220032

You would have done much better over that time frame in *insert anything other than HC here* rather than HC funds.

And there is no reason to suspect this will change in the intermediate future. Especially if we feel the Bern in November. People need to remember that both Trump and the Dems hate health care companies, especially big pharma.
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Go long pharmaceutical or biotech.

AKUMATOTENSHI · Feb 23, 2020

Getting closer.....

https://www.france24.com/fr/2020022...en-italie-pour-contenir-une-nouvelle-épidémie

Planetary lock down might come into effect if the leadership chooses. Long (GABA) // Google, Amazon, Baidu and Alibaba. The African continent has not been reporting much about it yet.

Akuma

PoopyDeek · Feb 23, 2020

Here4money said:
long healthcare?
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Short healthcare. Short major insurers. Feel the Bern.