Company looks like one of those tech outfits that got bid up when everything tech was bid up, and then was forgotten. Except… it’s now being bid up again:
We seem to be just around the average short price, short as % of FF is a respectable 35% but nothing explosive, but DTC is 2-3 weeks. Not a micro-float either, with 39M FF.
The company looks pretty solid. They managed 185M in gross profit and 75M in net income on a 861M revenue line. FCF was 84M. Again, nothing amazing, but enough there for this not to be one of those sad shorted stocks that deserve to be shorted.
Why now? Well, earnings are coming up on Aug 4th (wish had found this earlier…), and recently, it has pulled away from SPY. Either speculation, or someone knows something.
My only hesitation is that the average short price isn’t too far below the current spot. Will let better minds chime in but looks interesting for sure!
There has been no appreciable change in SI (Image #1) so the squeeze thesis has not worked out at all, but prices have moved up without partaking in SPY cratering a few times (Image #2). I like this relative strength, and so am holding on to the calls to squeeze a bit more juice out of them.
Closed out the 8/19 55/60 bullish call spread for $2; was obtained for $1.1 a week ago. (Forgot to share that when it filled on 7/25.) Reason closing out today is earnings are tomorrow, and will get hit with at least IV crush, and possibly a negative move.
Prices have fallen since earnings, and have kept falling. I lost track of this longer than I should have… and missed about 10% of the drop. Will consider put spreads on this tomorrow. Earnings results were ok, and this has not been on anyone’s radar, so expecting it to fall back to levels closer to where it was more than a month ago.
There’s also been a slight shift in average short prices, where they are now perched higher than the strike. Nevertheless, the rather high DTC and fairly small float means it could squeeze rapidly if the conditions were right. Makes this a risky short.
