$HOOD: Negative Catalysts/Headwinds

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**Ticker: $HOOD

Fundamental Share Mechanics/corporate action(s)

I found the ending of a Hood lockup period for shares that caused certain investors to be restricted from selling, and that date is NOV 30 after which they will be able to sell out. Will update post with image shortly.

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Technicals:
The TA for HOOD puts it at a very critical support level under which there is a cliff of freefall & open air. I was initially using Heiken Ashi candles mostly, but when I flipped it back I realized there is little support current levels if it breaks down. *im currently learning the forum so I’m going to update with some charts when I figure out images just getting my initial thoughts down).

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Additional Variables/Catalysts

The recent breach/cyber incident where many users’ private information and sensitive personal identifying information such as SSN’s, brokerage passwords, etc. were exfiltrated and for sale on the dark web - this incident is additional negative catalyst on top of the pile.

HOOD has been bleeding revenue from exodus of customers, lack of a crypto wallet still, and the negative sentiment from ‘January taking of the Buy Button’ + pending lawsuits, comprise a pile of negative catalysts that should put serious headwind.

If PFOF (payment for order flow) ends up being banned in whole or in part, then this will fundamentally put a brick wall in front of the business model for both RH & WeBull.

The Play: Puts/Short
Expiry: For puts, expiry’s After Nov 30 lockup period ending, currently assessing different options, but looking at Dec & Jan.

This is my first forum post so I’m learning the format and this first one is from mobile. Because of the shakiness in the market overnight and pre-market I’ve switched to my alter ego and gone full ManBearPig - half man, and full bear - I’ve been scanning for bear plays and HOOD along with ATVI are 2 I’m looking at. My contributions will get better as I learn the forums, thank you for having me in the community, and I look forward to becoming more active! I appreciate any input and countering thesis on the bull side.

Update: I went with Hood puts at the $25c strike for JAN 21 2021. They are up pretty nice, I’m giving myself time until after NOV 30 lockup end date and looking to sell off of those shares being able to push into the market, but so far it did what I had hoped - it rode up over the 50MA then had a hard rejection and then started breaking down. If it does break support here I’m looking to add. I’m adjusting stops as I go, but so far I’m liking the play.

Update2: riden2lo linked his DD in a response to this one in the comments, and rexxar brought to my attention that ridn2lo was written before mine by about 5 days. Not intentional as I hadn’t seen other DD written in the past week. Can close or delete this one I’m not sure what the protocol is for that, as there isn’t a type of merge for posts-functionality.

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Just to add, Robinhood allows you to see how many people purchased on HOOD’s IPO date: 301,573 Robinhood customers invested in HOOD’s IPO at $38.00 per share.

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Right on, thank you for that additional data. That is useful, I appreciate it! What did you end up buying as far as strikes & expiry?

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I bought Dec 10 $25 puts at .70

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Also would like to reference the final paragraph in OPs screenshot. When the partial early lock-up release occured on Oct 27, HOOD went down almost 10% on the day when 12.6 million shares were available to be sold.
After looking up HOOD’s IPO details, I found an article where the go to say that HOOD sold 52.4 million shares.

Now I’m not sure just how many more shares are still locked up until 11/30, but it is a sizable of around 40 million if my math is right.

If I said anything incorrect please let me know.

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Great addition thank you. Yea I was initially trying to figure out what exactly caused that big drop of 10% you referenced which is what led me into digging into the lockup periods, and leading to finding another coming up for the 30th, and as you mentioned the lockup ending did end up in a significant drop. When this next lockup period, it’s statistically unlikely that everyone holds those shares, and trying to view it from the perspective of someone who may have bought pre IPO and saw it ride up to 60+ and then all the way back down to 7 bucks below what they paid at 35… my thesis is that some will just want their capital back to deploy elsewhere, causing another dash of sprinkles on the dumpster fire that is HOOD negative news and catalysts.

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solid DD. I’m thinking of making an entry next monday. assuming that a good portion of these restricted stocks are owned by employees, the overall sentiment at least on Blind (anonymous social media forum for employees) is leaning negative so thinking a decent sell off by employees at least.

EDIT: forgot to mention, but we might be battling IV crush here? something to keep in mind but hopefully the drop is enough to overcome this as IV is relatively high for options right now

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Yea, I’m going relatively close to ATM for my puts, last time they had a lockup period end it gapped down like 10%, so I got the $25c JAN2022 at open for a starter, So for those I’m looking for them to go ITM offsetting potential crush, but really their next earnings isn’t til January 27 I believe and I’d be looking to sell off most of my position after the lockup period if it plays out as my thesis presents, if not then I believe I gave myself decent amount of time to at least roll out further or capture some downside based on technicals/negative headwinds through December so I could sell before any earnings issues w/ IV crush.

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Good points here. But as @Ridn2lo linked above, his DD was ahead 5days ago.
I don’t think we have a way yet of merging threads. I personally prefer to follow the earlier thread.
Just keep this in mind for future reference, and I hope to read more stock analysis from you.

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Oh gotcha, I hadn’t seen the other one at all yet, when they linked it I wasn’t sure what they were saying, other than ‘yea hood puts’. I can delete it

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Didn’t see yours until just now, as until Rexxar commented below I didn’t click on your response because it didn’t have any message text outside of the link. Seems like you laid out a good number of similar points in your DD, hope your profits are awesome from this dumpster fire of a company too, I’m enjoying it! :nerd_face:

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You good homie. I was just sharing mine with you to show that one had already been started. I think we are trying to just add to DD’s that may already be on the forums for a ticker rather than have multiple posts about the same one so it’s more of a peer review/contribution type deal. Profits for the last 2 weeks have been quite good on this play, and hopefully stay really good here at the beginning of Dec. until the end of the month.

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Gotcha, I get it and if I had seen yours I wouldn’t have even made mine as you laid out pretty much everything i has brought up before my DD, so admittedly my first DD contribution didn’t go as planned :joy:

Next time I’ll do a ticker search to make sure, I wrote this one on mobile as I was waiting for my new computer I got this week with profits :partying_face:
Thanks for being cool about it, was coincidental and wasn’t trying to steal any thunder there, and appreciate the guidance as far as adding to existing posts. Since it seems like your post had it covered, I don’t think there is anything I had to add, but I will share this img I thought was kind of funny -

Most of my trading is in thinkorswim, but I wanted to buy a hood put Through Hood just for the satisfaction so added one in that account (still have it because I’m waiting for some swing trades to come to fruition before xferring/closing out). Working on a few other DD ideas I’m kicking around - an ATVI swing (puts), as well as a possible long play on an Autodesk gapfill from that 20% drop. Looking into those this weekend.

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CNN Business article last Monday putting positive spin on HOOD. The article stated:

“Wall Street analysts who cover Robinhood remain cautiously optimistic about the company’s prospects. Revenue is expected to surge more than 20% in 2022 from this year, to about $2.2 billion. But the company is expected to post another loss next year, albeit a smaller one than in 2021. Six analysts have Robinhood rated a “buy.” Seven have a more lukewarm “hold” on the stock while one analyst even has a “sell” rating on it. Still, the consensus price target for Robinhood is nearly $46 a share – double its current levels and about 20% above the IPO price.”

I’ve been watching it closely and playing puts on it this past week, but it hopefully has found it’s new bottom just under $20 and will begin rebounding. Might be a good week to look at some calls.

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Thanks for sharing! I don’t really spend much time in the discord Lately, I’ve had pneumonia for about a month and I’m not up to voice chats and such, but I’ve been checking the forums more.

Sounds like we have a similar game plan, great minds think alike!

I’ve closed out my puts at this stage across both portfolios, and considering flipping long. I did the same with GME last week, rode puts down to $149 and then flipped long, bought the FEB2022 $450c’s that I’ll likely sell into morning volatility today, and they are up about 15%, which is decent for what they cost. Let me know how your HOOD long is going when you get that rolling. What strikes you looking at?

I use the OptionStrat app for planning out and saving my open positions & Whales to check Flow, may start tinkering around with a possible HOOD long just for a swing, I don’t want any long term investment exposure to that company.

Are you looking at any other upcoming brokerages/exchange stocks? There is a SPAC coming up on the date for its reverse merger for eToro that I’ve been watching but not much other than that in terms of broker/exchange tickers.

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Feel better soon, bud.
We’ll keep publishing plays and updates here in the forums, so you won’t really be missing much.

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So when does this become HOOD calls? Like this can’t keep going down right?

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I’m keeping an eye on it and plan to update this thread when it seems good. The run up today may have just been a fluke. Possibly shorts exiting out of positions, etc. Every chart from the 1 minute up to the monthly looks set up for continued selling pressure. I’m still focused on scalping puts on it for now. SPY is at times assisting with it’s run ups allowing me to find good entry positions. VWAP is still heavily acting as the main line of support and resistance.

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I think I need to get back into playing this, it was a pretty good money maker and I know you are constantly monitoring movement. Will be interesting to see what the floor finally becomes.

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