Someone mentioned in VC yesterday about researching recent IPO that had share unlocks and mentioned DOLE. I’d like to start a discussion on DOLE as a possible put leading up to their 180 day share unlock on 1/26/2022 according to NASDAQ.
Now I love bananas and I prefer Chiquita but here’s why DOLE is interesting to me as a possible put play:
DOLE was a play a couple months back in Reddit. While it didn’t achieve meme status, I definitely saw more than my share of DOLE YOLO posts. Who TF cares? Because it’s already in the collective psyche of retail and any lazy ass who likes/hates bananas can understand DOLE instead of researching some obscure biopharma FDA DD. All this means to me is this ticker can gain easy momentum, hence DOLE YOLOs.
This was a 2021 IPO that has since shit the bed. Remind you of anyone? HOOD and CPNG come to mind. Now CPNG had a pipe unlock on 9/7 and the days leading up the share price bled out. Unfortunately most of the shares were held by institutions and there was no real sell-off prior at 9/7 and in fact it sort of recovered. HOOD on the other hand saw a big dive prior to 12/1 but institutions held less than 10% - this could have factored into the selloff along with SPY absolutely shitting the bed. Both these companies still make a shit ton of money but they have also have their share of fundamental issues along with possible huge upsides. Regardless, the week/days leading up to the pipe unlocks saw big downward pressure on the share price. DOLE reached a 52-week high at the end of September of $17.63, around the same time the ticker got traction on WSB and has been on a low spiral down since reaching a low of $12.66 yesterday.
Factors to Consider
A. There’s is fuck-all volume on this stinker. The OI is practically non-existent. This alone might just make DOLE a non-play because liquidity is a major reason I would want to get into a put play.
B. Earnings are tomorrow, 12/03, and depending on how it’s received would monitor share price.
C. The markets are volatile right now. Indicators of a bearish market are here, but with SPY being manic these days, it does have an influence on these types of catalysts. Like HOOD unlocking yesterday and SPY tanking was just kismet for put holders.
This is just starter-material and I always defer to the more experienced and intelligent opinions in Valhalla. But this criteria as a possible screener for share unlock sentiment plays might be interesting. I was also looking at DNUT (Krispy Kreme) which had more volume on the option chain but since the beginning of November (aside from the last 2 days) was showing a nice upward trend on the daily-chart.
Some food for thought:
As I shout into the banana void, not that anyone cares lol, but DOLE released 3Q earnings this morning. If I’m reading earnings whisper right the consensus expectation was EPS of $0.19/share on revenue of $2.53B.
They tanked on both: EPS of $0.03/share on revenue of $2.3B Premarket shares are down around 2%.
Still keeping an eye on the shitty volume to find an entry.
I feel like I have my own personal banana blog! Reader population: 1
But volume skyrocketed as of 3pm to above 1.3M shares! Woohoo! Average volume is 500K but realistically I’m seeing 200-300K a day these pas few weeks. Still, there was some liquidity on the option chain so I’m contemplating taking a small position. The difficulty is that the next monthly expiration is before the share unlock date which makes the pricing high for Feb puts.
Also, wondering if anyone has the spirit of sharing and seeing if they can post transcripts of the earnings call? I can’t seem to find an earnings call transcript without hitting a paywall like here. On Stocktwits someone had mentioned about a possible buyback? Hope everyone is holding up okay in these tough markets!
Thanks for starting this. I was the one talking about DOLE and the IPO share unlock in VC. I’ll contribute whatever information I come across to your thread.
Also, look up Rod Alzmann. He was the creator of the DDintoGME website and is currently the one that has been pushing DOLE the most on Reddit. He talks about DOLE often on his Twitter account.
Can’t wait! Your HOOD puts were absolute brrrrrrr
So after some further searching, it seems that Dole operates their own shipping fleet for their product listed as the Dole Ocean Cargo Express, and they have their own ports to offload their product. So they may not experience the same shipping issues that other companies has suffered from.
Dole also offers container cargo shipping to other firms, so their shipping could provide an additional source of revenue that may have seen a nice bump due to shipping costs. This seems a little bullish on their part, but unless the stock skyrockets on earnings I don’t think it will have much of an effect on the IPO shares not being sold after they come unlocked due to the fact that the price is currently down almost $3 from the IPO price. Plus the stock has pretty much been in a downtrend since it’s one run up to $17.50.
That’s really interesting about their own ports, but with the size that they are I would kind of half expected that. When your source of income is a perishable product you want to vertically integrate as much as possible for obvious reasons.
People associate them with bananas or pineapples, but they have over 300 products in 90 countries.
I think beyond the share unlock, they could potentially be (heavily) affected by omicron if restaurant traffic declines this holiday season. We saw how farmers were destroying crops because there was no demand during lockdowns, which numerous EU countries are just starting to re-enact.
Here’s the transcript from their earnings call https://www.fool.com/earnings/call-transcripts/2021/12/03/dole-plc-dole-q3-2021-earnings-call-transcript/
They touched on all the points you and Ridn2lo said. Vertical integration. They seem to be raising their prices to combat inflation. Still recovering from hurricanes in Honduras and Guatemala. Reducing output a bit because less demand from food service recovery.
During Q&A, GS analyst asked about share repurchase as an option since they seem a bit deleveraged and the share price is low. CEO says they always explore capital allocation but repurchasing shares so soon after an IPO seems a bit strange - I tend to agree with him here as it sends out some mixed signals: IPO to raise capital only to reduce capital with share repurchase within 6 months?
Announced $0.08/share dividend for early Jan/22 for shareholders of record on Dec. 17. Could see movement up to Dec. 17 for those looking to grab dividends but probably a price reduction once dividend is factored in.
I think the fundamentals are sound but not extraordinary. Just my next inclination is to see how much institutional ownership there is in pipe lockup?
This seems more of a CPNG play where no one really gives a shit about this stock but negative sentiment about catalysts like earnings and pipe unlocks can drive the price down. Sort of evident in the nonexistent daily trading volume in comparison to the overall free float
Most of Dole’s imports go through San Diego, and it also has port operations in Wilmington, DE; Port Everglades, FL; Gulfport, MS; and Freeport, TX. It’s terminal at the Port of San Diego can hold about 800 containers. They also announced back in July I think about expanding to the port in Tampa, FL also.
Nice! So they’re avoiding major ports like LA, Long Beach, NY and Phila. The more I learn about this company the more I like it lol
According to the SEC filing at most 12.8% of the ordinary shares will be unlocked after 6 month PIPE. (12.3% if underwriters exercise)
93,098,644 ordinary shares. 12.8% = 11,916,626.432 shares to be unlocked on 01/26/22. Not sure if this is enough to move the needle down?
Here’s a bearish statement about DOLE
Noted that insiders hold about 42% of the float.