Good morning everyone. So I am a former long who steadily went all in on over this past year on bbry. I took a 40 percent loss when I sold my shares several weeks ago. Its been a rough year.
I see a huge opportunity to potentially regain some of those losses playing a quick trade on a bbry when this drops again from short covering. Wes made a post about this last week. I think the fairfax deal will not go through and when its announced that its fallen short were in for a big fall. Stocktrader mentioned he thinks well mantain low 7s even if fairfax deal doesn't go through as long as there are rumors of other companies showing interest. I disagree. We were at mid 7s on a potential bid that was actually announced and acknowledged officially by bbry. With the only official bid now gone this thing is going way down imo.
I think the opening bid after fairfax flop announcement will be around 4.25-4.50. This I belive will be the final floor for bbry stock. I'm thinking of buying below 5 if I can and aim to sell at 7. I would buy about half the shares I once owned and if I can generate a 40 percent return this would bring my losses to 20 percent on my original bbry investment.
I know some guys on the board have said not to do this but the fact of the matter is shorts do have to cover and there are a lot to cover. And when they do provided your timing is right a significant return can be made.
Opinions and feedback on this matter would be appreciated. I'm wondering if itd better to wait a few days after the fairfax bid flop annoucement, as investors sell off, or would it better to buy as soon the announcement as short won't wait and will cover immediately. And what period of time (couple days, weeks, etc) until the majority of shares ar bought back? Wes, racebill, stocktrader, rimtardsliveindumpsters, bashiousclay, your feedback is especially welcomed. Thanks guys
If you are serious and you really lost 40%, you are taking quite a risk again. No one knows for sure what will happen and anything can. Look at NFLX this year. The shorts have been waiting since the $50's to be right about it dropping again. It's now headed for the $400's. So many other similar cases. You can not be certain the BBRY deal will fall through or the timing of another deal, if there is one. It is all speculation. You might as well spin the roulette wheel. Despite all of this, I think it will sell, whether in whole or piece parts - for no less than $9. Timing of it... who knows. If you already lost a lot, maybe it would be better to stay out and try a safer play in a different stock then gamble again on this one. GL
Thanks for the response. The shorts have been right all along so it doesn't seem like a 9dollar is coming or some would have already covered in the sevens. I mean in the last two week period for short intewrest reporting period to go from 143 to 142m says something. If a buy out at 9 occurs then being able to buy this below 5 would be a dream. I actually think a buy out or pieces or we will occur at 7. So I do feel a relative safety purchasing this at 4.50 if I'd be able to. Although I agree at the end of the day this is all speculation, and quite frankly I've been wrong all year. Decisions, decisions. Ill figure it out.
You could either trade or invest. I screwed myself more than a few times when I went in with the mentality of investing, and then ended up trading to make a quick buck..... probably would've had quadrupled my money by now if I stuck to my original plans.
I can't predict what's going to happen within the next month or two, but I do know that this stock will be back to eventually $10 to $15 based on my own research. Put your money where your mouth is and short now if you think it'll go to $4 when the deal falls through, but you''re assuming a large portion of people who currently have this stock now will sell immediately when the deal falls through. All i know is that there are people in here who bought in now based on the current book value of the company - it's unlikely someone buying an undervalued stock will sell it for a loss when it's already clear that they've already committed to holding it until the stock reaches its book value of $10+. The stock will likely drop if the deal falls through, but probably not as low as you think it will.
One life lesson I also learned is that rich people don't stay rich by losing money. Fairfax has a 10% stake in this company and staked his reputation on the deal. This means if the deal falls through and we go down, he's going down harder and faster than us....
Sentiment: Strong Buy
Shorts would have covered by now if there was any chance deal was about to happen at 9 a share. Given then they have been right all along and its stands to reason fairfax deal won't happen and were in for another drop. My reasoning for how far it is going to drip is outlined in my original post. Not against going long at below 5 but definitely not now with a drop being imminent.
Hey wes you sniveling change your name weasel. Looks like your all in Jcp is really sucking again today. Netflix short is another really great call. Hows that ROI doing for you this fine October.
Sentiment: Strong Buy