I think the reason for the dip was the $32 target set by Piper Jafray. Screw these analysts. Goldman has a target of $36. Targets get raised all the time.
JMEI has had 6 $2 or more selloffs. The June 9th one nearly fully recovered. All the other ones before, a new high was set within 3 days.
I went back at VIPS history when it was at $32. It sold off to as far as $23.20. Yep. VIPS has a lot of debt and has a P/S of about 5. Net profit margins are nearly identical. JMEI has no debt and a P/S after today of 8. JMEI needs to consistently grow revenues sequentially at 20% plus a quarter with no exceptions. Makeup is a huge growth industry in China. In a year, depending on the P/S ratio at 8 it's a $50 stock, at 10 it's a $76 stock and 15 it's a $105 stock.
$26.90 is 50% Fibonacci retrace. $25.80 is 61.8% retrace. I swear by these numbers. VIPS sold off from $33 to $23 and look where it went. This stuff is very volatile, but it sure is nice to get it at the bottoms, isn't it?
Maybe. JMEI has no debt. VIPS has a lot of debt. Profit margins are identical. It's all about the revenue growth for JMEI. JMEI seems like a very stable growth product....consumer cosmetics.
I would but I'm out of powder. Sending $$$$ to my account early next week. I accumulated waaaaaay too fast, having not really studied the whole chart of JMEI. It looked like it was just about to break higher when it did the exact opposite. I was originally going to set a buy stop market above the flag...but didn't do it. That was stupid on my part. I also ignored the rollover in the indexes, which I knew about.
I ran the revenue estimates for the first earnings report that will be released sometime in July. It's an easy number to beat, designed on purpose by the underwriters. Low Price to Sales ratio at IPO pricing was about 6.5. High Price to Sales ratio was about 9.5. If they continue with the revenue growth, this stock will go a lot higher.
Their quarter ends at the end of June. We don't know the exact date of the earnings release yet. I did look at revenue projections and the analysts lowballed it from less than straight line growth sequentially to provide upside and then the next earnings release it's back to the original straight line growth. Expect a "surprise" in July to the upside is my take.
The gap was filled that was between the 27th and 28th of May. Those are often significant turning points. The IPO price is also supportive. Short interest will be released on 6/24. Since the selling hasn't been limited to JMEI, my thinking is that the bears have come up with a fear narrative of some kind that's supposed to be applicable to all China e-commerce stocks. Seen that before, repeatedly.
JMEI not a "top target". Where did you get that from? Read the prospectus. JMEI says that the perception that they sell counterfeit goods could hurt their results. Specifically they say they ensure that they do NOT sell counterfeit goods, however they have little control over 3rd party sellers on their website from which JMEI does receive at 14% of their revenue. Personally I think is all jawboning by the Chinese Govt. Seen this before. No crackdown has ever worked and in fact last year in a province they said they were cracking down and 90% of the shops shutdown. The Govt had an emergency meeting and said there would be no crackdown. Also, such a crackdown would kill the Alibaba IPO and Wall St. really wants to get that deal done.
I totally agree. This is just fear mongering. JMEI doesn't sell counterfeit goods and works very hard to make sure they don't sell counterfeit goods. They sure have a lot of repeat customers, that's for sure, which just doesn't agree with the false narrative here. Facts are facts on repeat customers. The Govt is targeting other websites, not JMEI. China has zillions of websites selling all kinds of #$%$. They aren't public companies, they are junk companies. Chinese customers buy from JMEI because they know they are buying the real deal and they AVOID the sites that sell counterfeit goods. That's one way JMEI has succeeded. Also notice that this information didn't come out until AFTER a big drop? That's the signal to cover shorts and go long as the little guy sells because of the "bad news" that's over a week old.
Nasdaq reports 2,055,000 shares of JMEI shorted as of settlement date of 13 June, so shorted as of
BEFORE the break down, as of the top in the stock at 32.50. I show a float of 11.4 million, so that 2 million shares short represents 18% of the actual float. I can't imagine how many shares are now shorted after the break down, and how of the float that is.
Exactly. VIPS has debt. JMEI does not. If JMEI keeps the revenue growth going and keep increasing it's profit margins (I calculated close to 10%) the share price will continue to rise. Screw the short selling liars that tried to take advantage of the quiet period with lies and as soon as the lies were published they tried to cover but couldn't find the shares to buy back.