https://twitter.com/KerrisdaleCap/status/1476211033777737733?s=20
Short post, but ASTR (wish.com rocket) has a 91M share lockup expiring tomorrow. As we saw with the recent HOOD put play (#824) from @Ridn2lo, these do create downward pressure on the underlying. In this case, the IV doesn’t seem too bad. I’ve personally taken some gamble puts to see what happens.
They’re going to put a satellite in orbit soon. Might be bullish with recent rocket launch success.
https://finance.yahoo.com/news/astra-announces-launch-nasa-cape-140000524.html
From what I’ve been seeing watching and playing RKLB and ASTR is they tend to rise up until the launch and dump in PM. The launch could be seen as bullish for sure but at the same token imo, ASTR is not as reliable and it could get scrubbed or actual faulty issues at launch. Playing puts for the share unlock but closer to launch, I do plan on taking itm and near itm calls. Plan on buying and selling before the launch however and riding the hopeful short pop before launch.
I find IPO/employee lockup expiries hard to predict & profit from, they never consistently dip as much as I want them to. They seem more consistent as a play when buying the rumor & selling the runup but I’ve never really tracked them much so I don’t actually know if that’s true this is just like, uh, my opinion, man.
I’ve been part of a massive IPO before where the cash requirements and taxation on exercising your options was substantial. One thing is prior to IPO some companies can dip in the coffers or get funding to give employees a liquidity opportunity at a reasonable FMV knowing the company will have cash soon, so people desperate to unload shares for cash may have done some of that exercising and unloading shares in the dark prior to IPO.
Many people also only dump a small portion of their shares at the end of lockup often selling just enough to cover the cost of exercising the rest of their options. They then attempt to hold the majority of shares for >1 yr or at least until the next tax season requires them to sell to cover the gains or losses on the exercising. It seems to take the wind out of the sails for playing the exact lockup dates as a specific dilution/selling event. I do think the exact date could maybe signal longer term dumping in some cases but day-of just seems too sudden.
Again this just my personal opinion on why I have never personally gotten IPO lockup dates to work for me as a play, I could be wildly off base and living in a fantasy realm about IPO and employee lockups and missing great opportunities.
Yeah, I was a bit weary of these sorts of plays until @Ridn2lo’s RH play. In this case, the dip at open was about a 50% win in profitability if you cut then.
I’ll be interested to see how it plays out from here though. Often times what we see is that the movements you’re expecting happen in the days/weeks afterward. Not too sure that might not be the case here. After all if all the employees rush to dump at once, it’s awful for them, so I would imagine some sort of guidance may be in place to do so in batches to prevent tanking the stock.
I’d expect to see more sell pressure in the coming days. There is the factor of the satellite launch next month, so maybe some insiders are holding in anticipation of a small run up closer to that date before offloading since it’s already been beaten down prior to them being able to sell.
some people could literally be waiting for Jan 1 for taxation purposes, we’re in a weird part of the year