I've made this point before, but I don't think moaning when the tape goes against you helps anyone's cause. Actually, it encourages the other side, because it looks so amateurish. It's one thing to think -- as a lot of us do -- that on a long term basis the strategy of piling up debt to buy back shares is a recipe for destroying shareholder value. But it's another thing to try to predict when the market will decide to comply with our opinions. IMHO, the longer the game lasts, the more devastating the decline when it comes. But I don't pretend to know when that will happen. I suggest the shorts need to be patient and not take more risk than they can afford to handle. Eventually, they will be right, it is written in the balance sheet.
I agree Autozone is overbought, overhyped by the media, and kind of a pyramid scheme with all the buybacks and
increasing debt notwithstanding the fact that multiple stores say their business is DOWN.
Even if it is not fraudulent this won't end well in my experience.
It certainly looks and smells like a manipulation but what is the fraud? Please be more specific.
No fraud. Justa classic short Squeeze. AZO looked like it was on the verge of breaking down and got loaded with shorts.
It gapped up and got on an alert list and Day traders Piled on to create a squeeze and si nce it was up many shorts also Piled on hoping fora partial or Full gap fill.
But Since most stocks were down this stock got squeezed back to close to another 52 week high.
Now if the general market is down some longs may have to sell But that Gap up at 137.80 I think will be strong support.
I am short Via 140 puts.
Your right they will never be able to pay the debt. 2.5 billion in debt and only 224 mil in cash. The stock purchase has made eps look good while putting themselves further into debt. Further down the road this should collapse.
fraud is when you delibrately put a co. in debt to increase EPS while top execs and funds i.e ESL. cash in their so called STOCK OPTIONS. they can never pay down their debt even if they wanted to.
we will see the true colors of AZO towards the end of the year when they have to refi all those loans at a much higher rate.
meanwhile take advantage of the situation why should they have all the fun. your next chance is Mar. 3rd.