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Groupon, Inc. Message Board

  • mikemoalem mikemoalem Oct 24, 2013 1:12 PM Flag


    I know that plenty of longs will bash this post, however all I am asking is for all of you to wait and see if my call succeeds or fails. If I am wrong and it fails, then bash all you want. I want to share what I believe is an opportunity to make a lot of money in a span of less than a month.
    I have been long in GRPN up until yesterday. I sold my position of 4400 shares at yesterday's close at $9.71 per share. I know it wasn't a huge position, nonetheless, I made a nice return. I have turned negative (In the short term) on this stock. I have done plenty of research and DD. The chart looks absolutely horrible. It broke through its 50 DMA late last week, and today is trading below its 100 DMA. Its 200 DMA is $7.70. Also, this stock has been down now for six consecutive trading days. Yesterday you could have argued it was because all momentum stocks were down, however not today. Two days ago you could have argued it sold off because of ITG, not today. A few sessions ago, you could have argued that GRPN was down because of EBAY's earnings disappointment, again not today. In fact, all momentum stocks are up today while GRPN continues to drift lower. On top of that, the past six trading sessions has seen GRPN sell off drastically moments after the market open then level off the rest of the day. Add in how violently volatile this stock acts after every past earnings release and you get a chance for quick profits. Finally, I will get to my main point which is my play. First, let me say it is a risky one, however the risk vs. reward ratio makes it well worth it IMO.
    With ZNGA and AMZN reporting after the close today (I believe both will disappoint on outlook) I would buy (and plan on doing so) the GRPN November $8.00 PUTS. Currently, they are quoted at 0.26 per contract. 100 contracts would cost you $2600. I believe that by the November expiration GRPN will be trading around $5.00-$5.25. If I am right, your profit will be over $20K

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