1. Volume Low - no buyers, no sellers, no short covering.
2. Options Call Interest high - shows that folks are loading at high premium prices
3. News - no news from SODA management, no press release which is good. I like the secret assassination of the shorts. No media coverage which is also what I like at this moment.
4. SODA revs and eps - will beat as usual, guidance will good. This company is NEW therefore high growth capacity.
5. Risk/Reward - more reward to the upside, could move to 50's or fall to 25. No wonder Option Calls are being bought at high premium.
6. Q1 - SODA has done good to break through the ads with Jillian, Dr Oz ...
7. Rumor - surprise news coming on Walmart and India. Buyback hmmm....
8. BedBathBeyond are selling these left and right.
9. Newer machines keep rolling. If this company was in trouble they would not risk with newer products rather sell the old one for margin profitability.
10. SODA & summer go well with each other :)
Two things - this runs up to 37 pre earnings and stays at 40 for decent ER OR this stays at 31 pre ER and shoots to 45 post earnings.
I think, you should forget about buyback until the price is higher than $20 (IPO price). CEO can not be a market gambler, if he rised money for rapid development of the company, he can not spend it for playing with the stock.
Buyback can be considered as one of the ways to return back money to shareholders, so as alternative to dividends. It's to early for SODA to pay dividends.
Only if it will go down to some unbelievable level, they can buy it back. But it shold not be higher than IPO price
you have hit a good note on buyback .. so lower than the IPO price would suggest an opportunity for share buyback.
stock going down to 18-20 range is a +10 profit for shorts
stock going up to 50-60 range is a +20 profit. The reward is much better on the upside.
And what really will take this stock down? bad numbers? if a company is growing then fundamentally there is nothing that should cause this go down. What is the fundamental problem with SODA?
3. Unit Sales especially US?
#3 was their failure last time which I feel they are doing best to fix in Q1. Personally they reported unit sales incorrectly for US which is why they got banged. Really speaking their sales in US was outstanding.
#2 margins - not sure about this one but hope they have worked on this.
#1 inventory levels - they are producing newer machines, BBBY is selling these left & right, high number of distributors. I say we are check with inventory levels.
So what bad news will cause this puppy to falter?
What I like is the company is growing fast all year and also generating cash. They are not borrowing to grow. If they earn $50 million this year and $70 million next year they will have over $150 million in the bank.....and still growing fast. The other thing I can't get away from is this machine saves the consumer $$$$ where as the Kuerig cost way more to use for the consumer. I like fast growing companies with a lot of cash...no debt and a global footprint. Enough said.
All good points, but I think the upside potential is way bigger with a solid beat as we have 70% of float shorted and the news are going to shock the hell out of the shorts! I agree that the downside is very limited as you said, $25 is a joke PPS to begin with and lower then that - it's completely unseeable - IMO.
What is happening today and yesterday in the market is pure insanity driven by fear. Weak hands giving in in small numbers, shorts thinking they are always right and long term investors just waiting to see if there's another attack to open a even better buying opportunity in case insanity takes over ones again.
My strategy, I will see how the two days left will play out. I belive that we shall see some rise, maybe even to $36-37(forget $45-50 now), but I think even $35 is pushing it. Shorts have had such a great week that they are clearly blinded by it. They think those douchbags are gods and always know what they are talking about. IF we go much higher before earnings I think I will close the $32,50 calls and trade those into shares again to have some extra leverage in the pocket if needed later. This would still leave me with more then 2200 contracts of May and July calls from 35 to 42,5 range plus a bunch of 50's.
It's a crazy game we play, totally bonkers as a matter of a fact! The main thing is that by wednesday we come out as winners and that's it!
KEEP HOLDING STRONG MY FELLOW LONGS, SHORTS ARE FRESH OUT OF LUCK WITH THIS ONE!